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Come January / February and the whole organisation is busy preparing their annual budgets. Executives manage to have a justification for each and every item on the budget, especially business growth. But when it comes to investments in Risk management and risk related technologies, it is often hard to justify the investments. With a plethora of IT vendors out there to provide sophisticated risk enhancing technologies, one would expect a price war and expect such technologies to be cheap. However, this is not the case and implementation of such IT solutions often runs in crores. This is mainly due to the consulting element that is required for implementation for the hardware. So, how does the risk department justify investments to enhance risk capabilities? One justification that can hold some weight is the fact that risk management is on every CEO’s mind as a result of the recent global crisis. There is a soft corner for anything to do with risk management, whether it is purchase of risk related books, hiring in the risk department or just routine newsletter sent across the company’s mail server with risk content. But this awareness of risk is usually not enough to get the rupees allocated for the project. Given below are some of the justifications or factors for positive ROI on risk management technologies. 1. Most of these projects involve technologies that provide a dashboard for viewing the underlying risks. Such an aggregated view saves time and efforts of many staff members for compiling the aggregated view that is otherwise provided by the technology. Imagine having 2-5 staff churn out consolidated reports done over 5-7 days, which is nothing but a compilation of data from various systems and divisions. Risk technologies eliminates such process inefficiencies and provide accurate data on which decisions can be based. This is true of all technologies, but more so for risk related technologies, because risk related data is usually not generated in the normal course of business. It is specifically scooped out of various systems an created for just a handful of users. 2. Many operational losses can be avoided due to implementation of technologies. Imagine implementing a real time transaction monitoring system that alerts users of suspected transactions being authorities or entered in the front office systems. Such alerts help prevent major frauds, high impact errors. The cost saving from just one alert can run in crores and easily recover the full cost of implementation. Therefore, it is important to determine what is the level of savings expected as a result of minimizing operational losses due to such technology. 3. Finally, automation helps users to do more precise monitoring, day end reviews than in a manual environment. What was not done in a manual environment will be easily done in automated environment. This naturally improves risk management framework and improves escalation mechanism. All in all, although it is difficult to quantify the gains from risk technologies, taking just a few past losses as examples, it is easy to justify the implementation of this new technology.