Steps for Risk Management Part 1

Content
● Steps for Risk Management
○ Risk Identification
○ Risk Analysis
○ Risk Prioritization

Steps for Risk Management
The following are the steps for risk management:
1. Risk Identification
2. Analysing Risk
3. Risk Prioritization
4. Risk Ownership
5. Risk Mitigation
6. Risk Monitoring
1. Risk Identification
Risk identification is the first step in the proactive risk management process.
It is a deliberate and systematic effort to identify and document the
organisation key risks.
It provides the opportunities, indicators, and information that allows an
organization to raise major risks before they adversely affect operations in the
organization.

1. Risk Identification
Key steps necessary to effectively identify risks:
● Understand what to consider when identifying risks
● Gather information from different sources to identify risks
● Apply risk identification tools and techniques
● Document the risks
● Document the risk identification process
● Assess the effectiveness of the risk identification process.

2. Analyzing Risk
Risk Analysis is a process that helps to identify and manage potential problems
that could cause harm to business initiatives or projects.
Risk Analysis carry out in two step:
● one must, first identify the possible threats that organization face
● then estimate the harmful effect that these threats will cause.
Risk Analysis is a complex process but it is also essential planning tool.

2. Analyzing Risk
Risk analysis is useful in many situations:
● While planning projects
● While deciding whether or not to move forward with a project.
● While improving safety and managing potential risks in the workplace.
● While preparing for events such as equipment or technology failure, theft,
staff sickness, or natural disasters.
● While planning for changes in business environment.

3. Risk Prioritization
The method of ranking material risks on an appropriate scale, such as
frequency and/or severity. This method is known as Risk Prioritization.
The objective of Risk Prioritization is to prioritize the identified risks for
mitigation.
The risk can be prioritize with both qualitative and quantitative methods.
It can be used to categorize the risks as to their relative severity and potential
impact on the project.

3. Risk Prioritization
The risk prioritization method should consider the following factors:
1. the probability of the risk occurring,
2. the consequence of the risk
3. the cost and resources required to mitigate the risk.

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