Understanding the Importance of the Risk Management Process: My Learning Journey

Is your company prepared for risks?

Actually, what is the risk management process? Do you know? Do you know how it can impact your business?

If not, you should learn about it, because your company may depend on it.

For me, it was like this:

I disregarded this important planning and business management tool and when I discovered what it was, it was too late.

Risk management is a process that seeks to reduce the uncertainties of an action taken through planning, organizing and controlling of both human and financial capital.

Such as:

Every action has an equal reaction, and when you take an attitude full of uncertainties into a project, you're taking a risk. The role of risk management is to ensure that these project questions don't cause future harm by maximizing all the good points and opportunities.

And without knowing this, I started a new project in our company.

Result:

A totally possible risk (in my case, an exchange rate increase) that could have been mitigated with a simple currency hedge operation, ended up with every possibility of occurring in this project.

So stay alert:

When we talk about risks that a company is subject to dealing with, they don't necessarily have to be bad, they can be positive. Risks offer threats but also opportunities, it's up to the risk management process to define which target to achieve.

There is a risk that you can never run, and there is a risk you can not stop running. - Peter Drucker

In my case, the mistake was just thinking on the bright side and forgetting the threats on the horizon.

This is a very important topic for any business, but also very unknown for much of the market, as it was, I repeat, in my case!

To avoid this error, understand why the risk management process should be very relevant to your business.

What is the risk management process? Why it's important.

What you may not know, is that risk management is closely tied to compliance and governance.

All of them are essential in BPM.

While process governance seeks to outline rules and guidelines for managing and executing processes to optimize workflows and determine risks, compliance has a duty to keep the organization within the rules and the law, and in this way, avoid institutional risks.

If you work with BPM (Business Project Management), having risk management is extremely important to your company.

However, many organizations have not yet realized this and end up being harmed by the uncertainties they let pass in their projects (such as in a case we commented on recently ...).

So don't expect your project to face problems that come as a surprise: Prevent yourself through the risk management process.

Don't forget that the risk management process obeys some rules. And to help you implement it in your company, we will detail its key steps next..

What is the risk management process? Steps involved.

If you plan to implement the risk management process in your company, be aware that you must separate it into certain steps so that everything happens as expected.

The risk management process is divided as follows:

• Risk management planning: establishing scope, detailing management activities for the project
• Identify the risks: define the main risks and their characteristics, whether they are threats or opportunities
• Qualitative risk analysis: analyze the exposure to risk to prioritize those that will be the subject of analysis, an additional action or contingency plan
• Quantitative risk analysis: perform the numerical analysis of the effect of the risks identified in the general objectives of the company
• Risk response planning: Creating options and actions to increase opportunities and reduce threats to project or business objectives
• Monitoring and controlling risks: controlling risks during the project life cycle.

Now that you can answer the question, "what is the risk management process?" And you know what steps you should take to implement this process, we hope you don't ignore this important issue like some market professionals do.

The success of your BPM depends on how you and your team deal with the risks that can threaten or bring an opportunity to your business.

As you have seen, in addition to predicting them, it's vital to monitor risks. And the best way to do this is through indicators that you can analyze in real time.

With the automation of processes, control panels will be available so that managers can manage risk with much more agility and confidence.