Risk management certification is a much sought after credential in today’s corporate world. Legal regulations complicate all your business transactions and the last thing corporations you want to deal with is a lawsuit.
Not only does a proper risk management process help keep your company on the up-and-up it can help solidify your employees safely create business process modeling approaches that are stable and which identify and deal with a variety of problems before they occur.
In this article, I’ll show you how to use various processes and software within your overall quality control plan to improve efficiency and productivity of all your team members.
What is Risk Management?
A risk management definition is actually really simple. Someone who works in this area (a dedicated risk management team member) identifies and mitigates against risks. This means they identify problematic areas assess and prioritize potential risks and develop solutions or plans of actions to deal with the risk. This process of identification can be applied to any business development processes or operational procedure in your company.
Risk management has to be part of your project management methodologies but it can also be found in standard processes and procedures for your company (e.g. hiring policies requiring background checks for candidates). Many of your employees may ask the question “What is Risk Management?” when in reality they deal with it every day.
You’ll find larger companies use a project management office to manage the risks involved in a portfolio of different projects. This centralization of risk management facilitates better reporting consistently across your company.
Does Project Management = Risk Management?
A perfect example of a risk management definition can be seen in most of your project management situations. Your projects are managed by a certified individual who applies proven methods to ensure projects are completed on time. During the project, subject matter experts and project leaders must develop a list of risks in collaboration.
This could include items in the project that may not be completed on time, areas where financial resources may not cover needs and potential failures in the process itself. A strong project team develops a plan of action that will mitigate each area of risk.
This means you protect yourself from the fault/issue happening, choose to ignore it or you put measures in place to reduce the chances of it happening. Your risk management process is embedded within your project management methodologies.
Business leaders/owners will invariably do a leadership skills & style inventory to make sure each management level is controlling risk properly. Therefore, risk management can vary depending on the management level. In fact, the higher up in the business you are the more likely your role involves managing resources and people, in which case risk management is all about protecting resources from becoming demotivated or jumping ship.
One key risk that is always present is individual employee performance. Corporate-level performance management software and proper project management can often help standardize performance levels and productivity within the team. But does require some work and effort.
Using the ISO Principles
The International Organization for Standardization or ISO lists requirements for risk management. You’ll find many larger firms (especially in manufacturing & financial sectors) follow ISO standards as a way to establish a baseline for quality in the firm; you can also apply this to assessing & administering risk.
Some requirements include that the risk management process employed provides added value is part of decision-making addresses assumptions and uncertain elements considers human action is transparent and can be improved upon. The ISO calls for a process that defines risks maps the scope of the risk analyzes other risks involved and develops a solution to remove the risk or reduce the impact as much as possible.
Obviously all decisions you make come with a risk. There is an inherent gamble in almost any business dealing you experience. However smart companies want to gamble with as much data as possible stacking the odds in your favor.
This means you identify anything that can go wrong with a situation and prepare to handle the issue. This has become such an integral part of corporate structures many companies hire staff with risk management certification to conduct these analysis on a full-time basis. You can do likewise, or simply opt for getting in a freelance consultant to kick start or initiate the process.
Next, you should also consider what project risk management software to use, if any at all.
What to Look for in Project Risk Management Software
Risk management is incredibly important for many fields and business types. Whether you are a venture capitalist or a representing an insurance company helping to plot out a major corporation’s newest ventures or merely keeping a mid-sized company afloat managing risks is incredibly important.
Perhaps the easiest way for you to do so is with the help of a good risk management program. There are many programs on the market and learning about the utility and ease of use of each program can be quite beneficial to you.
Perhaps the first thing that your project manager should look for in project risk management software is utility. There are dozens if not hundreds of risk management software suites available and not every piece of project risk management software is well-suited to every task.
Try to take a look at the quality of risk assessment software that is included with your product and make sure that you have the right enterprise risk management program to meet your needs.
For example, load testing is a specific risk in many high-end software solutions which requires critical testing tools.
It may be wise to consult with a software expert to figure out if you have the right suite of tools and taking a bit longer to make a purchase is better than purchasing the wrong software.
Ease of Use
Once you figure out what your risk management software suite can accomplish you need to determine if you are actually able to use it. In particular, you need to establish who the target users will be in your firm and their level of ability.
The more technical they are, they more capable they’ll be of handling a complex software tool. Most risk assessment software is user friendly but some programs do assume a fair bit of familiarity with similar products. A general enterprise risk management program should assume that the user has little to no experience in using the tools and most will include some form of tutorial.
Try to find a program that is in line with your own skill set and you should be a bit happier. Programs that are hard to use are often used less and failing to use a program that you have invested is a risk that is simply too great to take.
REMEMBER: If you want to use the right kind of risk management software you should focus mostly on the program’s utility and ease of use. Try to find something that has all the features that you need but is still easy enough to use that it will actually be useful. While it is always tempting to simply buy the least expensive product on the market it is important that you find a suite of programs that can actually help you to do your job.