In any project or organisation, risk management is an essential activity. A risk manager is concerned with managing the risks (uncertain issues and incidents) that, were they to occur, would affect the product or services that an organisation sets out to deliver.
Management of Risk highlights three basic steps to effective risk management that can be applied within an organisational or project context:
The first step of risk management is risk identification. Identify is include naming and describing any risk that might affect the achievement of objectives. This is very important because it can be ensure that there is a common understanding of these risks among all appropriate individuals involved in the organisation or project activity. The techniques that can be use are differ depends to the size and structure of the organisation, the nature of the activity or project and the experience of the risk management team. For example, you only can use brain-storming and discussing potential risks for a small software organisation. On the other hand, for aa large government body, might draw on the experience of risk management experts who have dealt with risks across a range of similar organisations. Project managers responsible for risks to a technical activity might call on the authority of experts to highlight the relevant risks.
For the next steps, evaluation is critical to successful risk management. The risk manager may fatally underestimate the potential impact of one particular risk if the have no critical analysis. In risk analysis, you must consider for only two factors that is probability and potential impact. Also, individuals who are responsible for managing risks must be aware of the organisational context of the risks. Ranking risks according to immediacy, impact and organisational context enables the risk manager to prioritise and plan how individual risks will be controlled.
Last but not least, the risk manager needs to identify the appropriate response to a risk and assign a risk owner, who ensures that the risk response is carried out, monitored and controlled.
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