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Saturday, 02 June 2007 |
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Risk management means identifying, assessing and controlling risks that crop up within a business or organization and making decisions to balance costs and risks with the mission of the establishment. Risk is the possibility of a disaster happening, and risk management is the process of figuring the severity of the risk, taking action to reduce the risk to a level that can be tolerated, and be able to maintain the risk level.
We all practice risk management on a regular basis. Taking precautions like–bringing along an umbrella along when rain is in the forecast, or taking a jacket along in case the temperature drops, or buying car insurance so you will be covered in case of an accident. Basically risk management is the ability for an entity to recognize a possible threat to their best interests and take precautions to keep them at bay, or lower the effect they will have.When several people are networking on a computer, there is always a risk that an employee might abuse the system, an outsider may hack into the system, or the possibility of records and critical resources will be destroyed by fire or other disaster. The cost to rectify these situations would be huge, this is where effective risk management. It would be more cost effective to invest in precautions than it would be to ignore the potential risk and pay dearly for the negligence down the line. Elements of a risk management program are:
* Risk analysis of vulnerabilities, resources, controls and threats.
* Management decision to utilize security measures against potential risk and accept low level risk.
* Implementing counter measures.
* Regular review of risk management programs. The exact approach to risk management will depend on many issues. Any project will have risks but the steps taken to identify and clarify the possible outcome and how these risks are managed, will be quite different. Any risk management program needs to be treated individually. If it is a new project in need of risk management, there will most likely be a more intense program than there would be for a project that has been repeated several times. The experience of the risk manager plays a large part in how risks are analyzed and the risk management is implemented. The more experienced risk manager is most likely to see shortcuts in how an organization will approach risk management. |
