Risk management process

Every day, companies are subject to various types of threats in their day-to-day operations. Risks may be overt, indirect, external, or internal (Chong 2014, p.5) The threats are further categorized as tangible and intangible risks and can include perils such as explosions, employee theft and embezzlement of funds, as well as hacking and compromising of the companies’ data and information. It is important for companies to take precautions to avoid such dangers, as they can be harmful to the operation of the company and potentially lead to its demise. Therefore it is vital that businesses come up with a strategic risk management process that will allow them to efficiently manage the risks and at the same time avoid them. Risk is as an uncertain future event that is likely to create both negative and positive impact on an organization or project. The management process I chose to evaluate for this project is the Risk management process. Risk management is a process put in place by an organization/ project manager to identify, monitor, control and mitigate risk. An efficient method allows the project manager to identify each possible risk, measure the impact of the risk and implement strategies that will work towards the aversion of the said risks

Evaluation of the Risk management process

A risk management process should help to prepare an organization for the uncertainties of the future and to to expound on all the expected changes entirely. Hence there are several factors that stakeholders need to look into to ensure that their risk management process is valid and will bear positive results eventually. A valid risk management process should, therefore, include the following components

It should give way to decision making such that one’s identification of risks takes place, prompt measures should be undertaken to present the findings to senior management hence kick of the process of decision making

An effective process should consider previous method implemented to avoid repetition of misguided processes

An effective plan should be brought together by a team of individuals with the required skills and experience to understand the project in question.

It should allow for continuous monitoring of risks

It should ensure that all risk control measures are done within the stipulated time to facilitate results( Stewart 1988, p.5)

All risks mitigations, treatments and controls should be within the context of the business and should accommodate the situation of the company.

It should also have a detailed list of all expected risks and how to mitigate each individually.

It should have well laid out a criterion that spells out how to classify highly critical risks and less essential risks to help determine tolerable risks and intolerable risks

It should have in it contingency plans if the risks identified occur.

Also, it should be flexible to allow changes due to the fluctuating situations in the economy and market at large.

An active risk management process will gradually bring forth the following benefits to the organization

Risk identification will help to prepare team members if a risk occurs thus they will be in a position to manage the risk diligently with utmost calmness.

Assessment of risk also helps to measure the impact of a particular project on the performance of the business. Moreover, it also assists in the creation of healthy rapports among the team members as this process gives them ample time and space to brainstorm and share ideas. Eventually, it leads to choosing the most refined and suitable solutions that will help in the treating risks due to the knowledge gathered from their colleagues.

Risk management not only helps in generating ways to treat risks but also helps in minimizing the occurrence of the risks. Implementation of policies therefore takes place promptly to reduce the eventualities of identified risks.

It also helps to create awareness to all team members, allow them to comprehend the risks and existence of the identified risks thus keeps them on the lookout for such perils

Risk management is also a ladder to successful business strategies in an organization. The instigation of contingency plans, treatment plans, and preparation for risky events are characteristics of a successful strategy in business.

It assists to save time and money .For example, a company has insured its data under a cyber-liability policy to mitigate the risks and adverse effects of hacking. If the risk occurs, the company will refer to its insurance company to match the financial loss incurred by the company due to the risk. Therefore, the policy will have saved the company from going back to its pocket to meet the expensive cost of treating such a risk. In the same way, as the company will have contingency plans to follow through in the event of such a risk, a lot of time will be saved since the stakeholders will not have to go back to the drawing board to design a contingency plan.

Business opportunities are also likely to emerge in the risk management process, which will not only serve as risk mitigation options but also as a source of income for the company.

Risk management also helps in protecting the company’s resources. Examples of such measures taken to prevent certain risks include authorization passwords for servers, which help reduce the risk of insider information by employees and also reduce fraud amongst them.

A company with an effective risk management policy is more likely to rank higher in entities eligible for credit facilities. Creditors prefer entities that are more organized as well as those which prepare for the uncertainties of the future.

Besides, it attracts investors and shareholders as a strong management process communicates a company that is confident and has a stable understanding of its strength and weaknesses.

A risk management policy keeps the company in the good books of the law as some regulatory institutions dictate a mandatory implementation of the same.

A detailed risk management policy provides a framework that guides the company through a step by step process of managing the identified risks.

A successful risk model should be diverse enough for multiple projects without necessitating major changes.

Risk monitoring also provides a field of experience and prepares stakeholders for future projects that may be more challenging.

Management system for implementation

Information systems risk management strategy is a type of information management system strategy implemented by most companies to maintain the confidentiality, security, integrity, availability of data and conformity to law in an organization.

Implementation of the system will include the following steps;

Risk analysis -involves identification of assets, determining the possible risks that are likely to happen, estimation of the possibilities of exploitation, computing the expected annual loss and eventually implementing controls applicable in the context of the business.

Security planning- this will involve identifying and controlling the security operations of the company. In this stage, the team is supposed to find out the time logs and activities of people in the company to eventually implement the security policy.

Setting up of the security policy- a security policy is used to protect the information capital against all types of risks whether intentional or accidental. A stable security system should conform to the regulation of the law and maintain the integrity, accuracy and availability of data.

The team will need to;

Have the approval of the management to implement the security control

Model, the security controls to be in line with given regulations by law

Constant review of access authorization to ensure they remain effective

Create security awareness amongst the employees

Effectiveness of the system for implementation

This kind of system helps to;

Limit exposure to hazards such as theft, destruction of software and hardware, unauthorized access to the servers and networks.

It also helps to mitigate risks resulting due to fires, human errors, fraudulent employees, water leaks, electrical faults and serves updates and uploads.

Moreover, it facilities installation of security controls such as administrative controls and logistics controls and administration of the controls set up. Consecutively, these controls will help to limit the number of employees with the authorization to access certain information and physical location of servers.

Range of management skills found

As with any other management process, implementation of the system above also included the following management skills; planning skills, organizing skill, staff selection skills, leading skills, and controlling skills. However, there were even other sills that I felt were crucial for the implementation of such a technical strategy. Since the approach involved handling of data, software and computer hardware, there was also need for individuals with specialized skills and those who have had hands-on experience in the field. In addition the strategy also required persons with excellent interpersonal communication skills due to the massive amount of information likely to be passed around.

Conclusions

I concluded that there was need for permanent staff to oversee the regulation of the controls. I also found out that an information systems risk strategy is vital for the integrity of a company. Furthermore, I also discovered that some employees would not be pleased with the implementation of the security and antitheft control as some of them are likely to be involved in fraudulent activities.

Recommendations

I would recommend that the company considers investing in a cyber-liability policy as it will help cover against the risks associated with information systems the policy will also be one of the surest and most economical ways to cover against the risks. I would also recommend the use of thumbprints to access some of the critical information.

Works cited

CHONG, Y. Y. (2004). Investment risk management Chichester, J. Wiley.

STEWART, D. M.(1999). Gower handbook of management skills Aldershot, Gower.