Risk Management is the process of identifying and working on the potential risks or threats to a business with economical application of resources. Controlling risks, monitoring risks and monitoring the hazards associated with it all are a part of risk management.
There are several steps involved in managing risk strategically, and those are:
The first step of risk management is to identify risks and create data for each. There are several strategies involved in identifying risks, but these usually vary from organization to organization.
Analysis of risks is the process of converting risk data into information to be used by risk decision making professionals and authorities. This step reveals the fundamentals of the risk to the project managers to further work on it.
Planning is the process of converting information into decisions and actions. It involves creating strategies and actions to address the risk and to manage it. Planning is the important step in risk management as it is the phase in which information is transformed into real time strategies to be adopted.
Tracking is the process of monitoring the status of risks and the actions that are taken to reduce or eradicate them. There are different metrics involved in this process, and each is used to determine the status of the actions and the risk.
The risk control department is responsible for controlling any deviations from the planned risk actions. The staff monitors the implementation of risk management strategies and actions and takes the information from the tracking department to check whether the actions being carried out are in conformity with the actions mentioned by the planning department.
Risk communication is the core part of the overall process. In order for the controlling and monitoring strategies and actions to perform well, it is important to carry on the communication through a viable channel.