Every business has some element of risk that can be a potential threat to its success. Risk management is the practice of assessing these potential threats and making sure you do everything in your power to maintain the upper hand.
A risk is something that may happen and if it does, will have an adverse impact on the project. A few points here, “that may happen” implies a probability of less than 100%. If it has a probability of 100% – in other words it will happen – it is an issue. An issue is managed differently to a risk and we will handle issue management in a later white paper. A risk must also have a probability something above 0%. It must be a chance to happen or it is not a risk.
Risk management is not a complex task. If you follow the steps, you can put together a risk management plan for a project or company’s undertaking in a short space of time. Without a plan, the success of the project or business activity and its reputation are on the line. Follow these steps and you will increase your chances of success. If and when risk becomes reality, a well-prepared business can moderate the risk’s impact. Monetary losses, lost time and productivity and the negative impact on customers can all be minimised