What Is Enterprise Risk Architecture?

Since cyberattacks are becoming more widespread and severe, the potential expenses of managing a cybersecurity threat will keep rising. Single ransomware, spyware outbreak, or data breach may result in millions of dollars in losses.

Effective Enterprise Risk Architecture or Enterprise Risk Management is required to reduce these expenditures while providing optimal security for the firm. So what is enterprise risk architecture?

Enterprise risk architecture (ERA) is a risk management technique that examines risk management from the perspective of the entire enterprise or organization. It is a leading approach aimed at identifying, evaluating, and anticipating prospective losses, problems, threats, and other potential sources of damage that may disrupt organizational operations and goals.

If you want to learn more about enterprise risk architecture, read until the end to find everything you need to know! This way, you can provide the best cybersecurity to your company.

Significance Of Enterprise Risk Management 

Each project that an enterprise undertakes has both internal and external risks. Unfortunately, it is not possible to avoid all these risks. They can, however, be controlled with a well-designed risk management architecture.

Standard risk management usually places decision-making in the hands of department managers. This can result in isolated assessments that fail to consider other sectors.

On the other hand, enterprise risk architecture is a company-wide approach for identifying and mitigating risks to a company’s finances, operations, and objectives. ERA enables managers to mold the company’s general risk status by regulating what business sectors to engage in or refrain from participating in certain tasks.

Types Of Enterprise Risk

Considering the possible threats that may impact your business, it is better to be aware of these risks. Here is a list of 3 major risks you should consider while developing and implementing your risk management architecture.

Operational Risk

Operational risk is the possibility of suffering a loss due to unsuccessful internal systems, personnel, procedures, or unexpected external occurrences. Global catastrophes, IT system breakdowns, security breaches, theft, casualties, and lawsuits are a few examples.

Therefore, organizations should be aware of the everyday tasks, protocols, and functions that are essential to the smooth operation of their processes and have backup plans ready to mitigate those risks.

Strategic Risk

Strategic risks are defined as unprecedented outside factors or events that would significantly influence your company’s strategic course to affect its ultimate failure or success.

Strategic advantages and risks are present at differing levels in all enterprises. Investigating how these shifts affect your firm will assist you in managing risks or any other problems that may arise.

Financial Risk

Most enterprise risks have financial implications, such as additional expenditures or monetary losses. On the other hand, financial risk primarily refers to money going in and out of your firm and the possibility of unexpected financial loss.

Factors such as shifting exchange rates constitute a financial risk that you should consider since they influence the dollar value your firm earns.

An enterprise can never achieve its objectives and milestones without effective financial management. It is essential to identify financial risks, evaluate the consequences of those risks, and be prepared to adapt to or minimize unwanted outcomes.

Architecture Of Risk Management Processes

The enterprise architecture of the risk management process is the framework of operations, such as their inputs, procedures, and outputs. This enterprise architecture catalogs and describes the risk management framework, its components and interconnections, and how risk management processes interact with one another and with other corporate activities.


This is a set of tools structured to automate a standardized, objective process for risk identification. It involves an ongoing cycle of managing and monitoring risks to identify or predict them before they cause harm.

The goal of enterprise risk management is to detect available prospects and any threats that may affect the entire organization’s aims and objectives negatively or positively.


When an enterprise determines potential risks, it may evaluate how this will aid or disrupt its objectives. The main objective of this process is to help an organization discover the outcomes that may influence its ability to achieve its goals.

This should contain a variety of risk analysis, risk monitoring, risk assessment, and evaluation methodologies, along with heat maps for a streamlined risk management process.


Once the risk identification and assessment are finalized, the company must determine what steps to take to minimize the impact of these risks on the business process. This entails identifying the optimum treatment technique to meet strategic objectives while lowering costs and losses.

The risk measuring tasks of identifying inherent and residual risk while looking at a strategic approach toward risk transfer, acceptance, avoidance, or reduction are all part of the treatment process. The primary aim is to maximize return on investment while managing risk within risk appetite and tolerance levels.


This risk management business strategy contains several processes used to monitor threats within the company continually. They are the operations normally carried out inside a company to monitor and analyze risks in a continuous cycle.

Communications And Attestation

This stage of risk strategy constitutes the recurring activities of managing communications and attestations of those with risk ownership over the lifespan of the risk management activities. These are performed on a regular basis or when particular risk factors are met.

Advantages Of Enterprise Risk Architecture

ERA offers several advantages to a company’s existing risk management strategies to efficiently deal with unprecedented developments. Here are some of the most significant advantages of ERA

Helps Anticipate Risks

ERA establishes standards related to a firm’s environment all across the company. This involves being more upfront about the risks a business encounters and how it can manage them. This results in fewer unpredictable risks and more detailed recommendations on how to adapt to such risks.

Improves Employee And Client Satisfaction

An efficient ERA may increase employee satisfaction by assuring them that procedures have been established to preserve corporate resources. Employees might thus have more confidence in the company’s future and their position within it.

In addition to staff, ERA also improves customer service and happiness by assisting the company in dealing with clients if any anticipated risks occur.

Saves Time And Resources

When a company implements risk architecture, a standardized risk report is issued to high management frequently, which outlines ERA processes currently underway.

This report highlights the risks that a corporation may encounter, the mitigation measures that are being implemented, and the data necessary for decision-making.

This way, a business can more effectively utilize its time and resources, particularly when it comes to the performance provided to higher-ups.

Increases Overall Company Efficiency

A successful ERA implementation has a significantly beneficial influence on the company’s overall resourcefulness. ERA may assist in reducing unnecessary processes, ensuring optimal worker utilization, preventing theft, and boosting profitability by better knowing which markets to explore.

How Is Traditional Risk Management Different From ERA?

Traditionally, risk management has been used to define the procedures and regulations that encompass a specific risk that an organization experiences. However, since technological advancement has resulted in an influx in cyber threats, current risk management systems have included enterprise risk architecture. It is a holistic, company-wide solution to risk management for the entire organization.


Organizations may experience several risks as they manufacture, market, and sell consumer items and services. To mitigate and plan for these risks, businesses are moving towards adopting a more streamlined enterprise risk architecture.

An ERA is a modern risk assessment and planning strategy that helps corporations anticipate potential risks and develop strategies to deal with them. The primary goal of ERA is to safeguard a firm’s resources and functions, staying prepared for future challenges.

Derik Belair

As President and CEO, Derik leads the vision, strategy and growth of Augmentt. Prior to founding Augmentt, Derik was the Vice President at SolarWinds, leading the digital marketing strategy for SolarWinds’ Cloud division. Derik has been working in the channel for over 20 years, starting his career as a channel sales rep at Corel Corp. and eventually becoming the first employee at N-able Technologies in April of 2000.
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