Risk Management Importance

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Whenever we think about risk, we always associate with the uncertainty and the possibility of something going wrong. Discipline and risk management focuses on the identification and assessment of possible risks and of all identified risks and thus, prepare a plan to meet that, when that happens! There is a lot of misunderstanding about the risk management strategy is being able to get rid of all the risks you can think of maybe. This is not perhaps, even faith with good risk management. Below is a quote from a world-renowned risk management experts largely summarizes the essence of good risk management.

"Good risk management fosters vigilance in times of calm and instills discipline in times of crisis.
"-Dr. Michael Ong

The benefits of risk management process

Benefits implementation of systematic risk management process is long-term and short-term. In fact, every stage of the risk management effort, the right of hazard identification, risk assessment of mitigation strategies, and has its own benefits and are listed as follows.

* Risk identify benefits: identification of risks is quite critical phase of the risk management process. The most obvious benefit is that all risks identified at the start of the project on mitigation strategies. This means, in turn, all identified risks most likely to be likely to be planned without affecting the objectives of the project and the final result. Another benefit to risk is that all the assumptions listed below. Analysis of the assumptions is an important step in removing the potential inaccuracies and contradictions in the beginning of the process itself. Now, the risks need not always be negative. Positive are often stumbled (opportunities that were not part of the original project plan) when you select phase and you can take appropriate action to make the most of this "opportunity". This in turn will have a positive impact on the entire project or business.

* Risk assessment benefits: this stage requires a focus on all identified risks, and assess their impact on the project or business. Evaluation of the planned measures to remove or reduce the risks, is the result of constructive discussion or debate among the various stakeholders. The biggest advantage of this process is that it serves to bring different perspectives to the table and in the process of finalizing its potential solutions, and each person is brought to the same page. This, in turn, brings forth a sense of accountability to all stakeholders (including vendors, contractors, etc.), one of the objectives of risk management. Participate in the risk assessment activity also aims to promote an organizational culture where everyone is "aware" and to appreciate how their performance to be measured and rewarded. In addition, as a result of the cost-benefit analysis, you can review the contractual procedures for pricing, deadlines etc, based on risk factors.

* Risk analysis and evaluation of benefits: a is a subset of the risk assessment process, where each risk is described along with its attributes such as importance and likelihood of occurrence, the recommendation to minimize risk profiles, stakeholders, etc. The risk is all set for a business function or process that the allocation of risk. Changes to policy, emergency numbers etc, are the benefits of a successful process of analysis and assessment.

* Risk of treatment benefit: risk profiles once finalized, graded, and evaluation, the next step for the implementation of the plan. Through internal controls (including policy decisions) and compliance regulations are established reduction strategies at work. Downside risks or threats "do not correspond to shock or surprise risk and opportunity are abandoned because of lack of preparation and planning. Achieved significant benefits to increase operational efficiency and profitability when successful treatment of risks at this stage.

* Risk monitoring and review benefits: risk management is not a one-time activity. The risk of continuous monitoring and review of the risk-management plans underpin a successful business strategy. This activity provides long-term benefits with regard to lessons learned to improve future risk management strategies and the effectiveness of the treatment measures of risk, which will no doubt come in handy for subsequent projects.

Compared with no strategy for risk, interest risk management of the business, in short, as described below.

* Awareness of "high risk": you can avoid the most important threat to business, any failure to identify and plan for risks and communicate across the Board to all stakeholders.

* Save on time and cost: a proactive approach to threats in the enterprise or business through risk management, always leads to considerable savings in costs, and prevent the waste of time and effort in the fight against the fires.

* Discover opportunities: instead of being unprepared for the opportunities identified during the project cycle or business, risk management can help plan and prepare.

* Harvest reusable knowledge: risk management comprehensive attempt with contributions from various stakeholders, experiences, and insights. This collective knowledge, or at least large parts of it, can be reused for future endeavours. One risk management plan can provide templates for successive plans to start from, rather than reinventing the wheel. This is probably the most useful long-term benefits.

Risk management helps in making better decisions in the anticipate threats and opportunities for projects or business. While some of the benefits achieved from the initial stages of the project, often "hidden" benefits surface much later. There is no doubt that good risk management plan is a cornerstone in the success of projects.