Risk Management Process Steps
In business, risk management is defined as the process of identifying, monitoring and managing potential risks in order to minimise the negative impact they may have on an organisation.
Examples of potential risks include security breaches, data loss, cyber attacks, system failures and natural disasters.
Learning how to apply the systematic risk management process steps and put into action the core five risk management process steps, will start you on your way to having projects that will run more smoothly and be a positive experience for everyone involved.
A common definition of risk is an uncertain event that if it occurs, can have a positive or negative effect on a project’s goals. Of course, it would be silly to say that anyone was hoping for negative effects! Well thought out and implemented risk management process steps optimise the chances of attaining those positive outcomes.
Good risk management process steps can make your project smarter, streamlined and more profitable. All definitely desirable outcomes!
Let’s talk about the five risk management process steps –
- Identify the risk. You can’t solve what you don’t know! You certainly can’t prevent it if you are unaware of it.
- Analyse the risk. This second step in the risk management process helps determine the kind of risk you have, its probable influences on a project and possible consequences.
- Evaluate the risk. How big is it? How likely is it to occur? How influential are the consequences? In an effective risk management process steps you might find the best solution is simply to ignore the risk. Implementing a solution maybe far more time inefficient than the consequences of the risk.
- Treat the risk. This is the stage of the risk management process steps where action is necessary. How can you nullify or reduce the negative impact? How can you increase any positive opportunities?
- Monitor the risk. Continually keep tabs on the progress you are making managing the risk. Perhaps you’ll need to revisit a previous step in the risk management process steps.