Risk management system: It is a proactive rather than reactive approach
The risk management system is an easy but effective process of identifying, quantifying, analyzing and responding to risk factors throughout the life of a project and in the best interests of its objective and objectives. An effective risk management system simply means taking control of potential future events that must be very proactive, non-reactive. For example:
A project activity in a particular network needs a new technology to be developed. The time given is only six months for the activity. However, the technicians think that a time of nine months is more feasible. If the project manager is proactive rather than reactive, your team will develop a contingency plan immediately. In this way, solutions are developed before the life of a project is likely to come to an end. On the other hand, if the manager is reactive, then the team under him or her does it all, but not what they should do to reduce uncertainty and future risk factors.
The major motto of an effective risk management system is therefore to reduce the risk associated with non-visible future events and to mitigate the magnitude of those increases.
Benefits of Risk Management Systems
In addition to identifying risk, risk management systems have been developed to do more. They should quantify the risk and predict the effect on the project. The result of the system is acceptable or unacceptable. However, this acceptability or non-acceptability of a risk generally depends on the level of risk tolerance for the responsible manager. Risk management, when configured as a continuous and disciplined process of identifying and solving problems, complements other systems without difficulty: organization, planning, budgeting and cost control. Organizational shock and surprises decrease because this system is more proactive than reactive.
Risk Management: Continuity
Coherence is also essential in risk management.
Risk management is an ongoing process. Once the team together with the manager identifies the possible risks that could affect the success of a project, they must calculate the ones that are most likely to occur. This process is based on past experience: the probability of occurrence, the intestinal sensation, the lessons already learned and the archiving of historical data.
The most critical point is that the risk management system should be taken as an ongoing process and as such should not be done only at the beginning of a project, but throughout the life of a project. If the project is expected to last for three months, the risk assessment will be carried out at the end of month 1 and month 2. The new risks at each stage of the project will be identified, quantified, managed and recorded for future reference.
Response to risk is the most important aspect of the risk management system
Risk response planning generally includes:
* Avoid: Eliminate a specific threat, usually eliminating the cause.
* Mitigation: Reduce the expected monetary value of a risk event by reducing the probability of occurrence.
* Acceptance: Accept the consequences of the risk. This is often accomplished by developing a contingency plan.
The bottom line-
By developing a contingency plan, the risk management team brings a problem-solving process. The end result is simply the best plan that can be launched at the time of notice.
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