Risk management can be described as a set of practices and processes that allow the company’s controllers and those responsible for their projects to identify risks to which the projects and the business are predisposed to. This allows for solutions to problems to be identified quickly.

Taking into account the purpose of risk management, it is easy to realize that it is a fundamental practice because it has the potential to prevent companies, who execute it properly, from suffering loss of resources such as time and capital. This makes it an indispensable tactic in an intelligent management model!

Now that you know what risk management is, and understand why it’s so important, continue reading and find out how to implement it in your company!

Create a plan to manage crises

The purpose of a risk management plan is to detail how to tackle specific risks and handle those risks appropriately so that you can mitigate or eliminate threats to the project, task and outcomes. Some factors that allow for this method to be successful include:

• the team responsible for the project;
• the strategic methodology that the team will adopt;
• the tools that will be at your disposal.

These features and how they will be effectuated must be defined according to the demands of the project. This means that if the requirements change, the plan must be adjusted to remain aligned with the objective.

Identify which risks the project is subject to

Once the team responsible for risk management has been established and has received the necessary tools to perform its functions, it is up to the team to map out all the failures and events to which the project is subject.

In this context, it is interesting to note that risks can be divided into the following groups:

• known risks — possible events that the team has already identified;
• unknown risks — possible events that the team has not identified;
• negative risks — potential problems for the ongoing project;
• positive risks – potential benefits for the ongoing project;
• individual risks — events capable of affecting a single stage of the project;
• risks — events that could affect the entire project.

Analyse risks qualitatively

Qualitative risk analysis aims to evaluate all individual risks and check factors such as damage, which can be caused by them and the probability of them occurring. This process is necessary for the team to be able to devote a responsible member to handle each individual risk. The role of this person is to think of strategies to solve, or mitigate the impacts caused by the risk under his supervision.

Quantatively analyse risks

In short, we can say that quantitative risk analysis is an in-depth version of qualitative analysis. This is because it is elaborated based on the study of strategic data. That is, to implement it correctly, the company needs to rely on a solution in big data.

The great advantage of this analysis is that it is able to point out factors such as the probability of occurrence of risks and their impacts in a more accurate way, thus increasing the efficiency of risk management.

Create answers to identified risks

Once the risks are properly mapped and analyzed, the team must devise a series of strategies to deal with them. To ensure the effectiveness of the solutions developed by the team, they must meet the following criteria:

• the characteristics of the project;
• the budget made available by the company;
• approval of managers and project managers.

Considering how risk management can benefit a company’s operations, it’s easy to come to the conclusion that providing those responsible with the best tools is a good idea. In this context, the use of technologies, such as artificial intelligence and machine learning, emerge as very interesting options!

A software endowed with these technologies is able to analyze data in a more agile and efficient way, thus generating a series of useful insights about the probabilities of occurrence of events and the impacts that they can bring to the project.

To guarantee the efficiency of the software and its functionalities, it is necessary to be developed by a serious and reliable company, such as Kazap Technology!