The Risk Management Process

(Figure 1) Risk Management Process

Risk management is identification, assessment and prioritization of risk.

Identification - It identifies the risk so that staffs at the operation are aware of potential problems. It is important to not only identify the risk as early as possible but also to repeate the identification process frequently.

Measure and estimate risk exposure - Risk management process involves measuring risk and estimating risk exposure that developed during risk identification, into a consistent form. These measures and estimates are then used to make decisions around accessing the costs and benefits of risk management. The cost and benefit analysis then enables operations to commit resources (instruments and facilitates) to manage the most important risks.

Form a risk mitigation - Risk management process involves taking information from risk analysis and using it to either formulate strategies, avoid, transfer, mitigate or keep the risk.

Evaluate Performance, controlling and learning - Risk management evaluates and monitors the status of specific risks and the progress in their respective action plans. Evaluating performance includes monitoring the probability, impact, exposure, and other measures of risk for changes that could alter priority or risk plans and ultimately the availability of the service. Risk reporting ensures that the operations staff, service manager, and other stakeholders are aware of the status of top risks and the plans to manage them.