Individuals and companies often have to send and receive data that is confidential, which if reaches the hand of someone else may cause damage to the person or company’s repute. To make sure that everything goes well and to reduce the risk associated, one should adapt some best practices that have been proven to help in this regard.

Given below are some such best practices. Make sure you keep them in mind when you have to share data on the internet.

Use Secure Connection

The first and foremost thing is to make sure that you use a secure connection to share files. There are many ways of sending information from one source to another. One may use USB drives to do so if the other person is in physical reach. However, most people use the internet for this purpose by uploading files to the cloud, which the other person can access.

There are many websites where files can be uploaded. However, many argue that such stations are not safe and secure and the files saved on them may be accessed by someone else. Additionally, they may even be lost due to some issues.

The best practice is to use a connection that guarantees good security. E-mail providers such as Gmail and Yahoo! are considered good because they do not give access to unauthorized persons. However, in addition to such free servers there are various paid ones as well that promise better security. They use the latest firewalls and security tools to stop intruders from entering their servers.

This is definitely the best practice in this regard. One should use such websites for all kinds of sharing so that the risk is minimized.

Recheck Everything

It is important to recheck everything. Quite often a simple mistake can cause big damages, such as the failure to apply passwords. One can stay away from big problems simply by being a little attentive and double checking everything.

Use The Right Tools

In addition to using the right server one should also use the right tools. There are several ways in which data can be saved such as putting passwords. One should secure files by using passwords that are difficult to crack. Additionally, tools such as WINZIP may also be of much help in this regard.

Secondly, computers should have anti-viruses and firewalls enabled so that the chances of any unauthorized access are minimized. It is very important to be aware of all such options and to use them correctly to be able to minimize risks.

Make sure you keep all these tips in mind whenever you share any kind of data online. It is important to be careful so that one does not have a surge of remorse.

It is a complex process that involves having a good understanding of the business. The process is explained below in full detail for a better understanding.

The Identification of Risks

The first step is to identify potential risks. Understandably, every business faces risks; however, the type of risks faced differs from business to business, which is why it is important to take steps to clearly identify risks. The process will not go correctly if risks are not properly identified.

In simple words, risks are events that post hazard to a business when triggered.

Identification starts by finding the source of the risk. If it is not identified, steps must be taken to identify the source so that the evil can be nipped in the bud.

Source Analysis:

This is the step that revolves around finding the source of risk, which may be internal or external. Internal sources are easy to identify and control, whereas more effort is needed to identify and control external sources. Examples of sources include employees of a company (inside) or weather (outside).

Problem Analysis Risks are related to threats that have been identified. For example, the threat of running out of business or the threat of confidential information reaching unsafe hands. The threats exist with numerous entities, including customers, legislative bodies (government etc.) and shareholders.

There are many methods of identifying risks or sources. The most apt method depends on several things including the type of business you have, industry practice, compliance and culture. Some common methods of risk identification are:

Common-Risk Checking

Some risks are common to every business. Studying the business environment and other businesses falling in the same industry may help identify risks.

Objective-Based Risk Identification

Every business has goals or objectives that it wishes to achieve. Any event that puts the achievement of that goal in jeopardy is objective-based risk and has to be taken care of as quickly as possible.

Taxonomy-Based Risk Identification

Taxonomy-based risk identification is a finding of likely risk sources. Keeping the scenario in mind, and using the knowledge of best practices and taxonomy, a survey is compiled. The survey gives the possible risks associated with the business.

Scenario-Based Risk Identification

As the name suggests, scenario-based risk identification includes identifying scenarios that may put the business in danger if they occur.

Risk Charting

This method joins all the above mentioned approaches by citing all the risks identified through various methods. It is a list that mentions all the risks and the impact they may have on the business. This list is not directly related to the process of identifying risks; however, doing so helps the business control things in a better way and take decisions.

By using the risk charter, a business can take a look at all the risks it faces and the consequences associated with them. This way the business will find it easier to decide which risk to first concentrate on.

The process involves several steps however; it fulfills two key purposes for any business. Firstly, it identifies and categorizes all possible risks that a business is currently facing or will face in the future. Next, it creates a proper structure that enables the business to alleviate all possible risks while simultaneously maximizing shareholder value. Below are the main steps to implement ERM in a business.

Review the Current Scenario

The first and the most important step is to assess the goals of the business and analyze the current standing of the firm. Also, it is essential to examine the relationship of the firm with its shareholders.

Identify the Risks

Now that the internal and external circumstances of the company are clearly in front of you, you will be able to better identify the risks that the business may face and the source of those risks. You can list down the various risks that you think the business might be susceptible to and categorize them accordingly. The four basic risk categories are financial, operational, strategic and hazard risks.

Analyze and Measure the Level of Risk

After all the risks have been classified under different categories, you can now analyze their intensity and measure the level of threat that they pose to the business. To examine the intensity of the risks, employ qualitative and quantitative analysis to approximately estimate the possible outcomes of each risk.

Create a Risk Profile

With all the necessary data available, make a risk profile for your business that covers all the risks that you identified and analyzed in the aforementioned steps.

Prioritize!

Study the risk profile carefully and prioritize all the risks according to their intensity. This is an essential step as it will enable you to see which of the risks need greater attention.

Treat the Risks

After determining the risks that need to be taken care of on a more urgent basis, formulate strategies of best practices to avoid or transfer that risk or exploit it based on the goals of the company and the nature of those risks.

Monitor and Evaluate

Once you have started implementing your strategies, monitor your risk profile regularly to see the results and the effectiveness of the strategies that are being employed to alleviate risks. Record the results and use them to further improve on your strategies.

Repeat the entire process of ERM from time to time in order to prevent your company from unpredicted risks.

Explained below are four common risks that businesses generally are prone to:

The Prices of the Commodity

The biggest risk associated with the commodity that the company sells is the risk of a fall in its market prices. On one side, a rise in prices is good for companies, as it allows them to make more profit (depending on several things). However, a fall is not beneficial as it results in lower revenue.

Commodity prices are rarely frozen. They keep on going up and down, based on several things such as, raw material prices, demand and supply, people’s taste, and weather. Companies try to keep prices stable and stop them from dwindling much, especially on a lower side. However, quite often it is not in the company’s hand.

Things that may affect the price of commodity:

-   Expensive Raw Material

-   Competitions

-   Lack of Demand

If the raw material becomes expensive, the commodity will rise in prices, which results in a fall in demand, as both prices and demand are inversely proportional. A fall in demand often results in a fall in revenue, which means that the business will face a drawback.

In addition, there are always attacks from competitors, such as higher promotion or low prices. Businesses have to meet the standard set by the competitors, which often is not very easy.

News and Rumors

News that affects a company’s image directly hits its stock. A very good example of such an impact was witnessed in 2011 when news of the Fukushima nuclear crisis came out. It punished stocks with any related business.

Any negative news may affect the company’s stock in a very negative way. This is why businesses keep an eye on what is being written or said about them in the media. The 2010 and 2011 debt crisis in some Eurozone nations is a good example of a frenzy created by the media.

Legislative Risk

The risk related to the business and government is called legislative risk. Government policies and changing regulations may impact a business in a very negative way. Businesses anticipate budgets with bated breaths to see the change that the budget can bring to the business. Certain things, such as higher standards or taxes may be very harmful for a business.

In the past many businesses had to shut down due to the changing laws and regulations. Since it is something that is not under the business’ control, businesses are required to always be on their toes.

The Money Factor Risk

Most businesses run on credit and loans. Huge investments are made after taking loans from financial institutions, on which businesses have to pay back interest. Businesses always run the risk of the interest rates going higher, which would make borrowing expensive and might deter their chances of making a profitable investment.

In the same way, businesses that involve giving out loans are scared of the interest rates falling too low. This has a negative impact on their earnings, as they receive less commission or interest when the rates fall.

If a company or business is slow or inefficient at handling even the simplest of projects then its market reputation will come into perils labeling it unreliable. This will leave a bad image for the company making it liable to more losses than profits as no investors will be ready to put their capital on line with its name.

When projects are assigned to a particular company, the first step taken by a project manager is the assimilation of factors associated with potential risks. This will give a clear idea to the project manager of where to make amends. For example, if particular equipment has aged and is likely to break during production then failure to replace it would result in stoppage of production on the whole leading to loss.

Taking steps early is a vital part of project risk management. Replacing faulty machinery before it can cause disruption in the production process can help save time and money spent on injured employees and structural damage.

For hazards that can’t be avoided, like a tornado or some other natural disaster, planning for quick reimbursement of raw material and machinery is imperative. Planning ahead will keep the owners and workers mentally aware of a possible disastrous situation. This will allow the personnel to walk through disasters step by step as planned by the project manager instead of running around with confused looks on their faces.

Comparing hazards that have recently occurred to those that have occurred in the past will give a clear look at the effectiveness of your risk management. This can be done by keeping records on paper or software.

The most noticeable difference between risk and issue is that an issue is assigned to any specific person. Risks cannot be assigned to any specific person or people. Issues are certain and expected turnouts. This means that to ensure best practices, it is not possible for one to assign a particular person or persons to any particular risk. For best practices, project managers have to assign risks to a particular person or people. This is because even upon being a project manager you cannot have expert knowledge about every technical aspect.

A risk on the other hand, is an uncertain event. If a risk materializes into a reality, it comes with consequences that can alter the course of any project. A risk is something that has not happened yet and is only a prediction at the moment. Its possibility to occur in the near future is what has led to the concept of risk management for best practices. It is important to mention that risks are not always issues. When a risk doesn’t end with detrimental consequences it doesn’t become an issue.

A risk is often considered as any potential variation in a plan. It can be a hazard or an opportunity a project manager may encounter at any point. Taking risks is not one of the recommended best practices. Risk is taken when one takes chances with volatile or sensitive circumstances which can lead to failure, financial losses or any other setbacks in the business or to the company. Issues are likely to occur when members in the team are not aware of best practices. Similarly issues may arise when customers are misinformed or when there are other issues in risk evaluation.

Therefore, when it comes to risk versus issue, they both have an important role to play in any business setup. They are both intertwined with best practices and can be avoided through effective best practices. Risk management is an important aspect of business, which allows project managers to prevent risks and control issues from arising.

Risk management is an important best practice and requires project managers to have the capacity of differentiating between risks and issues. By mitigating risks they can successfully prevent issues along the process of a project.

Ideally, risk management must begin immediately a risk is recognized. This best practice must not just be limited to the beginning, it must also continue all through the life cycle of the project. Risk management is very effective when it is completely integrated into the engineering and process of the program. This is a best practice that ensures dependency and serves as a driving force for effective risk management.

A common mistake most managers make is that they think identifying and tracking issues and then managing the root cause (risk) is a best practice. This kind of practice masks the actual risks that exist and will only help managers in tracking the risk without mitigating it. Therefore, it is important for managers to make sure that they not only identify the risks but also mitigate it. Their approach must change.

Therefore, a risk must not be confused for an issue. When a root cause or risk has been established, the consequence or issue must have already resulted. This means the issue must be handled. Moreover, if the consequences have not yet been established, it does not mean that the risk does not exist. Identifying the risk before issues result is a crucial best practice. This is the recommended approach all managers must take to ensure best practices.

The ideal example is the Commercial-Off-The-Shelf (COTS) process of making decisions. There are some key questions that must be kept in mind when making decisions.

1. What is the guarantee that the sole provider or source of the COTS components will not discontinue supplying the products during the acquisition and usage process?
2. Is there a backup source?
3. Will it be possible for the government to facilitate the production of the essential components of the COT?

These questions and others like it help project managers in identifying the main cause (risk) and the possible outcomes (issues). If the decision to acquire the COTS is taken, and later in the life cycle of the project the source discontinues the supply of critical components for a while, emerging issues can be managed immediately.

If a project falls behind schedule due to discontinued resources, this is not a risk; it is an issue at hand. Resolving it is an essential best practice to ensure risk management. Often, suppliers fail in meeting demands with supplies. This may require stocking of the materials to prevent off the market scenarios and delays in the progress of the project. This is also a best practice that can be implemented in most small businesses.

Therefore, comparing risk versus issue management is a vain attempt. They are both an essential and unavoidable component of project management. However, the best practice mandatory for proper management is to identify and mitigate the risk before issues arise.

Often, not reacting to a situation that may be predictable or anticipated is against best practices. Sometimes project managers have to take the risk deliberately because there are greater chances that the organization will benefit from. This is taken as one of the best practices recommended for project managers. In a situation where the risk taken proves to be negative, there will be losses incurred by the organization. Being a project manager, poor risk management and failure can have implications on your career as well. Therefore, you must be willing and ready to face the consequences no matter what may happen.

When a project is received, there is need for a concise and detailed evaluation of the cost, risk management planning and additional expenses. Managing the funds to make sure everything works as planned is a big challenge. However, there are still things beyond ones capacity and there may be complications along the line. These complications are issues that can be avoided through best practices. Ignoring such problems means that you are taking great risks and more issues may arise. Therefore, an additional requirement for project managers is to have the ability to assess whether a risk is too great and how to deal with the issues coming forth from the risks. The first and most important thing project managers must refrain from is – playing the blame game.

The blame game never solves the problem, and instead wastes precious time and efforts. The right approach is to face the fact that the issue has arisen and there must be implementation of risk management strategies. Whenever a project is assigned, planning also involves foresights of risks and planning risk management strategies as a backup. Therefore, looking past who to blame and taking immediate measures for damage control is the right step to take.

Weighing risks and issues is an essential best practice for risk management. This means assessing the extent of the impact a risk will have is as important as knowing how to manage the issue. Identifying the risks always helps in predicting the scenarios to come and measures to be taken to control the issues. To ensure that project managers can ensure proper risk managements, there is need for reporting every aspect of project management. This helps in keeping up with deadlines, delivery dates and fulfilling the contract with accuracy and efficiently with minimal losses and risks. This is among the most recommended best practices for project managers.

Concluding on risk versus issues, they are both equally important aspects of any form of project management. Assessing a risk and predicting issues go hand in hand and project managers must stick to best practices to make sure they do their job right.

Risks vs. Issues

Risks are usually unknown events which may take place during the project and affect a project’s expenses, schedule, scope or quality. Though not all risks are bad, project managers and workers fear them.

On the other hand, issues are immediate problems that need to be solved on the spot through new tasks added to the project’s plan, an extended schedule and an increase to the budget. After these are set and implemented, issues will be tracked and resolutions will be attempted until the issue is removed from the project.

If a threat is identified as a risk, it will first be documented upon discovery. After that, its probability and impact will be assessed and tasks for removing this risk or reducing its effects will be planned. Finally, the project manager or the staff in charge of risk management will monitor the risk and update accordingly.

However, if the threat is an issue, it will be tracked until action is taken to resolve it. The process of tracking and taking action will continue until the issue is no longer a threat to the project.

Why Bother with Understanding Risks and Issues

Handling risks and issues differently will make managing projects much easier. Because risk management is very important in a project, knowing when to exercise it to its full potential is necessary. Besides, companies will not appreciate spending large sums of money on issues because these aren’t as costly or dangerous as risks.

So, knowing the difference between risks and issues is a must for every project manager.

• Always Assess Risks Early – Project managers and risk analysts should come together during the early stages of the project to figure out the risks that are present in it. Members of the team working on the project will also be able to provide beneficial feedback since they probably have dealt with the same project before.
• Discuss Risks – Effective communication is one of the main aspects of any project. It is an important factor that can help the project fail or succeed. By communicating risks and discussing them, project managers and their teams will be prepared to face them. Communication can also be helpful in finding a solution that reduces the effects of a risk or eliminates it once and for all.
• Remember that Not All Risks are Bad – Some risks may just be unwanted surprises, but that does not mean that they can only harm the project. Some risks may speed up a project and make it more profitable. Therefore, risks should be analyzed thoroughly before being completely eliminated.
• Make Sure to Prioritize Risks – Not all risks are equal; some may be insignificant while others can become disastrous. Project management professionals need to determine which risks belong to which category and then give them numbers to determine which will be handled first.
• Plan Responses Before Risks Arise – Professionals should be able to directly tackle risks once they occur, and the only way to do that is by planning a response beforehand. There are three common responses – risk avoidance, risk minimization and risk acceptance. Each of these will be used in different scenarios.

Risk management is a very helpful best practice. However, in project management, its importance is probably twice what it is in the other aspects of a business. Therefore, special attention should be given to it and these tips should be considered well.