Managing risk should be a priority for any company, regardless of size or industry sector. Most business owners and managers are aware of some of the potential threats to their productivity and revenue, but have not yet put a coherent structure in place for dealing with them.
Risks need to be identified, evaluated and prioritised according to severity and likelihood of occurrence before a strategy can be planned out an implemented. The goal is not only to avoid risks that would obviously hurt a business, but also to avoid any outcomes that could prevent an organisation from reaching its full potential.
Actions taken to identify and mitigate risks can be weighed up as a return on investment. Funds and resources expended on avoiding a potential risk must be in proportion to the potential harm. Otherwise, other productive activities may be neglected, which is a problem in itself.
One of the most common ways of evaluating these costs is by looking at how any particular risk could adversely affect the achievement of an objective. If you have a good idea of the financial benefit of reaching a business goal, then you can put a more concrete figure on what you’re willing to pay to avoid jeopardising its realisation.
Ensuring you have accurate, relevant data at hand is the foundation of any effective risk evaluation.
Often organisations will assess risks from the top down, with a small group (or even an individual) making all of the vital decisions. This way of working ignores the fact that employees are often much better equipped to identify threats in their particular fields. For example, an IT worker is more often qualified than a general manager to understand threats to IT infrastructure.
This raises the issue of who gets to assess risks, and when. A coherent system is needed to delegate risk management based on seniority and expertise, at the most appropriate point in the business process.
A good risk management strategy should be transparent and work alongside existing business processes seamlessly. By breaking your organisation’s activities down into stages, risks can be identified, delegated and mitigated more efficiently, with minimal disruption to everyday work.
Automation makes this activity more effective and accurate, with workers assigned to particular tasks and stages by predefined rules and conditions, reducing the potential for misunderstanding or human error.
SwiftCase is a powerful, cloud-based business process platform which includes features for more effective risk management.
Get in touch with us today, for a free, no-obligation demonstration.