Risk Management in a Project From Your

¶ … risk management in a project from your experience or reading. What tools can be used to assist in risk management?

Enterprise risk management (ERM) essentially deals with recognizing possible risks within the operation of the enterprise, controlling these risks, preventing others, and safeguarding security of these risks.

it is the investigation of possible organizational risks that may occur, investigating possible magnitude of these possible risks, setting weights in place to control occurrence of these risk, a and evaluating to make sure that these risks, if they do occur, are dealt with in as efficacious a way as possible. Risks, too, are prioritized so that the organization can determine which risks to deal with first and which are most damaging to their organization.

Risks can be both internal and external. Examples of internal risks are the possibility of fraud or of data being hijacked. Examples of external risks, on the other hand, include terrorism or some negative natural events or something done to the corporation from an outside factor (such as new policy). Whilst the organization will be more able to deal with internal events, it will only have as limited amount of control in terms of external. N9ontehleles, it will help it to be prepared.

Tools used for risk evaluation, decision management and risk management are mostly statistical, probability-focused. In using these tools, the organization has to determine between 'risk' and 'uncertainty' since the two can easily be confused, are actually different than one another, and the organization can waste resources and time by erroneously focusing on uncertainty instead of risk.

Several risk management standards have been developed including the Project Management Institute, the National Institute of Standards and Technology, actuarial societies, and ISO standards which produced the international standards such as the ISO17799.

The Committee of Sponsoring Organizations (COSO) is a reputed organization that guides companies in the areas of enterprise risk management.

COSO's framework for ERM falls into the following 4 categories:

• Strategic -- that he company should set for itself high-level goals, aligned with and supporting its mission

• Operations -- that the company should establish effective and efficient use of its resources

• Reporting -- that there should be reliability of reporting

• Compliance -- that the company should practice compliance with applicable laws and regulations. (COSO (2004))

Each of these four prongs are involved in the risk protecting situation

Strategies involved in the general handling of risk involve evading the risk, transferring risk to another party, making contingency reparation to deal with the risk, reducing the negative effect or probability of the risk, a and even accepting the potential effects of the risk.

Tools for risk management include the following:

1. SWOT analysis which assesses the Strengths, Weaknesses, Opportunities, or Threats of a situation

2. PEST analysis which helps one understands the bigger picture of the Political, Economic, Socio-Cultural and Technological environment you are operating in. One fills out all these details in a factual manner in each of these spheres. Done in a similar way to the SWOT, it helps one see the entire situation and figure out where risks may lie.

3. Scenario Analysis that helps you explores threats that your organization may face in different situations.

4. Risk Impact/Probability Chart -- a chart that helps you identify which risks may likely happen and impact of those risks. This helps you prioritize risks according to magnitude.