In order to survive in today’s raging economic times, it is imperative that companies manage risk well. Effective risk management ensures value, agility, and efficiency for the organization.
Apply the following risk management steps for success at your organization:
Step One: Risk Identification and Documentation
Identify all risks that are likely to affect the portfolio of the organization’s projects and investments. Encourage employees across the organization to identify and notify risk managers of potential risks. Maintain and regularly update a comprehensive risk register to document all risks.
Step Two: Risk Assessment and Risk Prioritization
Assess the probability of the incidence of each risk as well as the severity of its impact/consequences. Assign numerals denoting the probability and severity of the impact. Use this information to calculate the risk magnitude (probability x impact), accordingly prioritize risks and mark them as critical or acceptable.
Step Three: Risk Control, Reduction, and Mitigation
Move from highly critical to acceptable risks, create and implement strategies to ‘eliminate or prevent risks’ (thus reducing its probability of occurrence) and/or ‘mitigate or resolve risks’ (thus reducing the severity and adverse effects). Document strategies and their outcomes in the risk register for reporting purposes.
Step Four: Risk Monitoring and Risk Review Meetings
Continually monitor and gauge the extent to which risks of individual projects have been reduced or eliminated as a result of implementing the risk management process. Risk review meetings should be held regularly to reassess, re-evaluate and re-prioritize risks over the course of the project lifecycle.
Step Five: Risk Reporting and Risk Learning
Compile risk profile reports (listing risks, their significance, the risk control plan, its implementation and effectiveness, and recommendations for improvement) for stakeholders and Board of Directors. Lastly, ‘risk learning’ incorporates feedback from the organization to improve the risk management process
Predict360, Enterprise Risk Management Software enables organizations to identify, quantify, monitor, and manage risk. It accesses the environmental, financial, legal, reputational, and safety impact and the likelihood of a risk at the business unit level. It provides a fully-integrated ERM solution, which facilitates organizations to minimize risk and make strategic decisions.
About 360factors Inc.
360factors, Inc. (Austin, TX) helps companies improve business performance by reducing risk and ensuring compliance. Predict360, its flagship software product, vertically integrates regulations and requirements, policies and procedures management, risks and controls, audit management and inspections, and on-line training and qualifications, in a single cloud-based platform based on artificial intelligence.
360factors EHS Services offers environmental consulting services in the areas of air, water, and waste permitting and compliance, site investigation, and remediation, environmental and dredge material sampling and evaluation, engineering and geology, expert testimony, health and safety, and operational risk management. Its Managed Services incorporate outsourced risk and compliance services using Predict360.
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