Process Of Risk Management - The IRM India

 The Process Of Risk Management is the framework for the actions to be taken. Five basic steps have been adopted for risk management; these steps are called the risk management process. It starts with risk identification, continues with risk analysis, then the risk is prioritized, a solution is implemented and finally the risk is controlled. In manual systems, each step involves a lot of documentation and administration

Here are five important steps in the Process Of Risk Management.

1: Identify the Risk

The initial step in the risk management process is to identify the risks that the business is exposed to in its operating environment.

It is important to identify as many of these risk factors as possible. In a manual environment, these risks are noted down manually. If the organization has a risk management solution employed all this information is inserted directly into the system.

2: Analyze the Risk

Once the risk is identified, it must be analyzed. The extent of the risk must be determined. It is also important to understand the link between risk and various factors within the organization. To determine the severity and severity of a risk, it is necessary to see how many business functions are affected by the risk.

 There are risks that can bring an entire business to a halt if they materialize, while there are risks that are minor nuisances to analyze. In a manual risk management environment, this analysis must be done manually. When implementing a risk management solution, one of the most important basic steps is to map risks to various documents, policies, procedures and business processes. This means that the system already has a risk management framework that evaluates risks and informs you about the long-term impact of each risk.

3: Evaluate the Risk or Risk Assessment

Risks need to be ranked and prioritized. Most risk management solutions have different categories of risks, depending on the severity of the risk. A risk that may cause some inconvenience is rated lowly, risks that can result in catastrophic loss are rated the highest. It is important to rank risks because it allows the organization to gain a holistic view of the risk exposure of the whole organization. The business may be vulnerable to several low-level risks, but it may not require upper management intervention. On the other hand, just one of the highest-rated risks is enough to require immediate intervention.

4: Treat the Risk

Every risk must be eliminated or hidden as much as possible. And that by establishing contact with experts in the field where the risk belongs. In a manual environment, this involves contacting each stakeholder and then holding meetings so that everyone can talk and discuss the issues. The problem is that the discussion is split into many different email threads, in different documents and spreadsheets, and over many different phone calls. In a risk management solution, all relevant stakeholders can be informed from the system. The discussion about the risk and its possible solution can take place from within the system. Top management can also closely monitor proposed solutions and system progress. Instead of contacting everyone to get updates, everyone gets updates directly from the risk management solution.

5: Monitor and Review the Risk

Not all risks can be eliminated — some risks are always present. Market risks and environmental risks are just two examples of risks that always need to be monitored. Under manual systems monitoring happens through diligent employees. These professionals must make sure that they keep a close watch on all risk factors. Under a digital environment, the risk management system monitors the entire risk framework of the organization. If any factor or risk changes, it is immediately visible to everyone. Computers are also much better at continuously monitoring risks than people