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Risk Management Information Systems (RMIS) have several components. Some of these modules include communication, and control activities, risk response, threat evaluation, the internal environment of an organization, and objective setting. Hopkin (2018) asserts that organizations should have a risk culture. The elements of a risk-aware culture, such as communication, leadership, accountability, and learning, are vital in defining the internal environment of companies. Risk appetite and tolerance should guide organizations on setting objectives. The risk assessment component should go hand-in-hand with the objective setting. Risk assessment helps companies to measure threats and propose strategies to mitigate them. Usually, organizations can use the 4Ts approach to respond to risks. Broadly, after aligning risks with an organization’s appetite level, it is vital to treat, tolerate, transfer, and terminate them. Developing a shared vocabulary is part of risk control. The control component, therefore, ensures that the recommended measures do not exceed a predetermined scope. Communication is a fundamental component that can reduce risks. Hopkin (2018) clarifies that organizations should use a range of communication strategies to enhance the risk management strategy. Generally, these components help organizations to take appropriate actions to control risks.
Sustainable development of organizations depends on information systems. It is, however, vital to point out that information systems risks may hamper the realization of business goals. Hence, investing in RMIS will ensure service continuity, increased security, and enhanced business reputation. According to Abbass, Baina, and Bellafkih (2016), security improves the usage of information systems and business performance. Organizations that adopt information management systems can detect and prevent potential risks. RMIS, therefore, help firms to assess risks and manage relevant information. It also allows organizations to enhance the accuracy of data by avoiding errors. Finally, RMIS assist companies in complying with legal regulations and saving costs because of improved risk management.
References
Hopkin, P. (2018). Fundamentals of risk management: Understanding, evaluating, and implementing effective risk management. Kogan Page Limited: London, England.
Abbass, W., Baina, A., & Bellafkih, M. (2016). Survey on information system security risk management alignment. In 2016 International Conference on Information Technology for Organizations Development (IT4OD) (pp. 1-6). IEEE.
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Discussion 1-Risk Management Information Systems
Risk Management Information Systems is made of different components which make this tool very efficient in risk management. These components encompass objective setting, internal organizational environment, evaluation of threat, risk response, control activities, and communication.
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