For any business, it is important to access any risk and take any action needed in order to ensure that risk is longer present. This is an ongoing activity as technology and business keep evolving even as hackers & cyber criminals work hard to exploit any loopholes or security lapses.
The process of Risk Management can be divided into 4 steps:
The most crucial aspect of effective risk management is to first identify the risks. This helps to plan for the next steps that will be needed to be taken to protect against those risks & work towards preventing or lessening those risks in the future.
Once risks have been identified, it is necessary to assess the likelihood of those occurring. If anything does happen, what will be the effects. This will help list out the priority with which these need to be handled. So, risks which are highly likely to occur & can have a major effect on our business are top priority & need to be dealt with immediately.
Once the assessment is done thoroughly, systems need to be put in place to reduce impact. Necessary action will need to be taken economically to remove as many risks as possible or reduce its impact as far as possible.
The last step involves monitoring the existing systems & keep checking out for any new risk that arises. If any new risk does arise, the process will have to be repeated. As there are many technological & business developments are taking place, this needs to be done on a continuous basis to ensure comprehensive risk management.
Once this process is followed, any risk is detected & resolved quickly. This helps to reduce its impact and also save costs. If there was no risk management process in place, then it is most likely that a risk would be detected only after it has done its damage. You would be caught unaware & your strategy would be reactive instead of proactive.
This approach is quite cost-effective as costs are minimized through proactive action rather than waiting for the problems to occur before taking any step. It also helps in business growth in the long term as clients are benefitted by better management & security.
Employees are able to work more efficiently & focus on fulfilling client requirements rather than reacting to risk & spending a lot of time in trying resolve issues which improve productivity.