INTEGRATED MANAGEMENT SYSTEM(IMS)

5 Steps for Risk Management

1. Identify Risks

Write down all threat and risks you can possibly think of and ask the other stakeholders to their thought as well for validation.It is important to look beyond the risks internal to your organization when identifying risks. A wider scope of thinking is required so that the physical environment and other stakeholders are taken into consideration.

2. Assess Risks

Assess each risk by determining the probability of it happening and the level of impact it would have. To determine where to place your efforts most effectively, your team must determine the probability of each risk. During this step, some organizations use a heat map to identify which risks are likely and have severe impacts.

3. Evaluate the Risk

The ranking or evaluating a risk will require determining the potential harm that may cause to the organization and its employees. Risks can cause harm in 3 different ways.  Although the subtopics may vary from industry to industry and organisation to organisation, they can be classified into acute, chronic, and catastrophic. It is important to assess how likely a risk is to occur after you have assessed the harm that may be caused by each risk. By combining these two variables, we can determine how severe the risk may be. Risks that are greater will be ranked higher, which means that they need to be addressed sooner rather than later.

4. Implement Solution

Implement process changes to reduce the impact of each risk identified. The way risks are managed will depend on the type of risk they are to. Some businesses might decide to put together a plan for what to do if something catastrophic happens, but they may not spend too much time on it. In cases where a risk is considered chronic and relatively likely, it may be necessary to treat it as soon as possible. Identifying several possibilities to mitigate the risk, followed by determining which is most efficient and cost-effective, can be an efficient and cost-effective approach.

5. Monitor and Review the Risk

Risk management concludes with monitoring and reviewing the risk. Review on a regular basis, review the progress of the plan and check if a risk has occurred and hasn’t been caught. Implementing risk management steps and then ignoring the risks is not an option. It will be necessary to verify that the solution implemented to mitigate the risk is still functioning and within the organization’s capability to deal with the risk. If the risk is not more severe or likely since a solution was not implemented, it may still be appropriate for it to remain untreated for the time being.