Risk Management
Risk Management - Archer IRM
Archer provides holistic integrated risk management on a single, configurable platform that manages multiple dimensions of risk and drives accountability across your internal functions and extended third-party ecosystem.
Risks in an organization can be defined as any uncertainty, circumstance, or process that can prevent that organization from attaining its objective or cause a significant disruption in its business operations.
Risks are disastrous, and they do not bring with them anything positive to you or your business. For any business, whether startup or long-standing, to thrive, possible risks have to be managed, and processes have to be put in place to ensure this.
Risk management is the process of identifying, assessing, and mitigating risks present or possible risks that might arise in the organization. It is making and carrying out decisions that will reduce the adverse effects of risk in an organization. When an organization takes time to focus on risks to know the resources that will be used to mitigate the risks, that organization is protecting itself from uncertainties, financial losses, and it is increasing its likelihood for success. Effective risk management deals with proactive processes, not reactive processes.
Importance of Risk Management
By implementing an effective risk management plan that considers all the possible risks before they occur, you can really help your organization grow. There are so many more benefits of practicing risk management, and some of them are:
It protects everybody involved and every organizational asset from potential harm and disruptions.
When an organization has the ability to spot and control risks, it makes the organization more confident of its business decisions and operations.
It creates a safe work environment for everyone affiliated with your organization; staff, customers, and third parties.
It protects your organization from circumstances that are destructive and can lead to bankruptcy.
It increases business resilience and operational resiliency while decreasing legal liabilities.
It helps organizations save on premiums by establishing insurances.
It helps organizations establish techniques.
Risk Management Processes
Every risk management plan follows the same basic steps to make up the risk management process.
Here are the steps involved for effective risk management:
Step 1: Identify the Risk
The first step deals with identifying every possible risk your organization stands a chance of being exposed to. There are so many types of threats, and it is crucial to identify as many risk factors as possible.
Step 2: Analyze the Risk
Once you have analyzed a risk, you have to assess the risk critically to determine its scope. You have to understand what links the risk to different sectors in the organization. If you want to determine how severe a risk is, you have to study how many business operations and functions the risk affects. This step aims to find out how much risk can affect your organization’s objectives and goals.
Step 3: Evaluate the Risk
You have to evaluate the risk even further after determining the likelihood of its occurrence and its consequences. In this step, risks are ranked and prioritized. A risk that will cause a lot of damage to the organization is categorized as high-priority.
Step 4: Mitigate the Risk
In this step, you assess the risks with the highest priorities and develop a plan to combat them using defined risk controls. This step involves using plans like contingency plans, risk prevention tactics, and risk mitigation processes.
Step 5
Monitor and Review the Risk
It is important to know that you can’t eliminate all risks; some risks will always find ways to manifest themselves. Hence, you should follow up on existing threats and always be on the lookout for new ones. Monitoring risks enhance long-term business continuity.
Response to Risks
There are only three forms in which you can respond to risk. Organizations have to select the best suited for that risk to move forward. The responses are:
Mitigation: This deals with reducing the possibility of risk by decreasing the given financial value associated with that risk.
Avoidance: You can get rid of some risks in your organization by finding out its cause and getting rid of it.
Acceptance: This is usually the last resort, but sometimes, your organization is forced to accept risk. This response is the preferred one if contingencies have been developed to reduce the impact of the risk on the organization.
Risk management is very paramount in the success of any business. It is helpful for both startup businesses and established businesses.
If you want your organization to attain its goals, make profits, and stand out, your risk management plan must be top-notch. If you don’t know how to go about it, don’t fret, Archer is the solution. We have professionals explicitly trained in risk management and its various fields like IT risk management, enterprise risk management, integrated risk management, etc. Our experts are ready to work hand in hand with you to find the most preferred risk management plan for your organization.
Mitigate risks today and see your business live up to its full potential; contact Archer today.
FAQs
What is Risk Management?
Risk management is the process of making and carrying out decisions that will reduce the adverse effects of risk in an organization.
What are the responses to risks?
Acceptance
Avoidance
Mitigation