Quant Action Quantitative Risk: Action Plan Developing

Quant Action

Quantitative Risk: Action Plan

Developing an action plan to quantitatively identify and address risks is something that any business organization that hopes to survive and remain profitable and stable in the long-term needs to do. All businesses in all environments face a certain degree of uncertainty by the very nature of the fact that they do business with people that they cannot control (including people both inside and outside their own organization, i.e. employees, customers, and competitors), and being able to identify and assess the potential for risks in a quantitative way can create very useful and very actionable data for a company to use in making decisions between various strategies or specific actions (Croker 2003; MMG 2011). Developing and implementing an action plan, which is a simple and direct way for carrying out complex procedures, can help not only to identify but also to accurately quantify the risks inherent to any business organization in its current and projected operating environment, and so lead to more effective business decisions (Mind Tools 2011).

The first step in an action plan is to identify the specific tasks that need to be performed (Mind Tools 2011). In a quantitative risk assessment, the individual tasks that need to be accomplished include identifying and quantifying the competitors to the business and their level of threat, determining the potential changes in demand for the company's goods or services, and examining any likely fluctuations or interruptions in the supply chain that could affect the company's ability to operate. The specific business areas and all relevant factors in these areas must be identified and measured to obtain a comprehensive risk assessment (Croker 2003).

The second step in an action plan, once the tasks have been properly and comprehensively identified, is to delegate these tasks to the appropriate personnel within the organizations (Mind Tools 2011). This includes establishing exactly where "ownership" of the risk belongs -- though ultimately the entire organization is at risk for any risk facing any part of the organization, specific departments, offices, or personnel that deal directly with the risk factors will be the most immediately and directly affected are the true "owners" of the risk -- and ensuring that information gathering and decision-making includes these "owners" is important to addressing the risks facing an organization (MMG 2011). The third and final step in a standard action plan consists of checking that the plan is indeed comprehensive through use of the SCHEME acronym -- ensuring that all aspects of Space, Cash, Helpers/People, Equipment, Materials, Expertise, and Systems are covered (Mind Tools 2011). This approach will ensure that no risks go unidentified, and that all aspects of the business organization are not only included in the risk assessment plan but are also considered as part of the responses to the risks identified, which will help to bring about a greater degree of success in the action plan's development and implementation (Croker 2003).