Why is Risk Management Key?

Risk management is sometimes missing in the first steps of projects, and even often forgotten when everything is fine… but it shouldn’t be.  

Identifying risks help to step back, have a global overview and be able to ask the right questions and involve the right actors in the right timing. Risk discovery is never a waste of time, it’s a key process, part of the code of good practices of any business. Even if it needs an initial investment in terms of time and process settings, it guarantees future benefits and protects against important threats. It’s a key choice for any business, to ensure the future. And when it comes to the company’s IT direction and culture, the CIO is steering the ship and is in charge of his safety. In today’s complex environment, CIOs are required to identify, anticipate and proactively mitigate risks before they emerge. It requires constant vigilance to identify emerging threats or potential risks and find the right way to deal with each of them, whether about strategy, operations, reputation or business model.  

Explaining how risk management can keep the company on track strategically is part of the CIO responsibility.  Monitoring risks in the early stages when the company can have the most control and oversight is key to success. And the only way to be prepared at any time is to keep this process as a constant reflex. Managing risks is a continuous process, which needs to be part of the company DNA.  

Whatever the form and tools, setting up risk management includes the following steps:

Identify and recognise the risk  

Any risk assessment process should identify and priorities a company’s risks, providing quality inputs to decision makers to help them come to an effective conclusions on risk responses, including information about the current state of capabilities and resources around managing the priority risks.

Analyse, evaluate and rank the risk

Based on the priority risks identified in stage 1, their drivers and their openness to measurement, the next step requires that management choose the order of tackling the risks identified and the appropriate risk response.

Treat the risk: eliminate, mitigate and manage 

Depending on the risk response method chosen, management then identifies any gaps in risk management capabilities and resources and improves those as necessary to go ahead with the risk response. Over time, the effectiveness of risk mitigation activities should be monitored to ensure capabilities and resources do not fall.

Monitor and report 

Risk improvement toolkits, and online technologies make it possible to cluster information about risks using common data elements to support the creation of a risk management radar or score table for use by CIO’s and IT leaders.

Review and improve! 

When risk management culture is in place, it’s easier to continue active risk management at all levels. Any employee is prepared to face issues with a serene approach and an established strategy. And it leads to the subject of the company’s vulnerability and reputation. Indeed, actively managing risks and set it as a public statement, help increasing investors, partners and client’s confidence. A company with a risk management culture is a company prepared to face new challenges and to grow on solid basis. And the capacity to face any threat with resilience is a promise of success in our constantly changing modern economy.  

Of course, risks management is not about avoiding every risk, there is no such thing as zero risks, but risk management allows you to be prepared and then managing issues with the right approach with a clear head.

Leave a Reply

Your email address will not be published. Required fields are marked *