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Risk Management

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The simplest and possibly best definition of risk is:

• The possibility of loss, injury, disadvantage or destruction.

Apply this definition to the issues of program management and you have the starting point for successful risk management.

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Risk Management Definition

Basically, risk management is the sum of all proactive management-directed activities within a program that are intended to acceptably accommodate the possibility of failures in elements of the program. "Acceptably" is as judged by the customer in the final analysis, but from an organization's perspective a failure is anything accomplished in less than a professional manner and/or with a less-than-adequate result.

The key words are:

• proactive
• management
• accommodate
• acceptably
• professional
• possibility

It is possibilities that are being accommodated. It is management's job to do the planning that will accommodate the possibilities. The customer is the final judge, but internal goals should be to a higher level than customer expectations.

Risk management as a shared or centralized activity must accomplish the following tasks:

• Identity concerns
• Identify risks & risk owners*
• Evaluate the risks as to likelihood and consequences
• Assess the options for accommodating the risks
• Prioritize the risk management efforts*
• Develop risk management plans
• Authorize the implementation of the risk management plans*
• Track the risk management efforts and manage accordingly

The highlighted activities (*) are those that must be reserved for management's attention and action in those cases for which a risk management staff/secretariat are employed. This list exclusive of the management functions is consistent with the list espoused for years by the Defense Systems Management College (DSMC): risk planning, risk assessment, risk analysis and risk handling. The managerial functions are highlighted to once again emphasize that management is responsible and accountable for risk management.

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Shadow-Planner - RISK MANAGEMENT module

Shadow-Planner RM is a powerful and flexible tool developed in conjunction with Cranfield University. The RM module helps any organisation to:

• Quantify its key assets and processes.
• Evaluate specific threats to specific assets.
• Identify the threats that may interrupt critical performance.
• Examine the likelihood and impact of such an interruption, and consider mitigation strategies.

With a clear graphical matrix of risks faced by the organisation as a whole, or by any subdivision, the solution highlights where particular risks exceed their predefined risk threshold and supports evaluation of cost/benefit alternatives to risk treatments.

The system enables an organisation to quantify each risk, create documented risk reviews and provide an organisation wide risk register.

The Shadow-Planner Risk Management Module allows you to make risk informed strategic decisions based on clear objective evidence.

By linking to a library of threats developed by Cranfield University, the Risk Management Module delivers an organisation wide risk evaluation in accordance with good practice and Home Office approved standards.

The commercial approach of this module enables organisations to conduct a thorough and objective assessment of their risks and vulnerabilities. The project orientated structure of the Risk Management Module delivers clear, comprehensive and objective risk information to the Board, putting risk on to the strategic decision making agenda.

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At the core of the risk management process is an assessment of the nature of each threat; the likelihood that it will occur, and the impact on the business. To achieve this, the Risk Management Module has 3 tiers:

Configuration
1 Defining organisational assets
2 Select & define threats from threat library
3 Define risk matrix

Reviews
1 Review each threat against each asset.
2 Assess impact and probability
3 Make recommendations with costed options

Projects
1 Create projects to reduce the risk profile using the previously defined options.
2 Implement and establish review schedules.

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Product Development Partnership

The UK Defence Academy needed a software platform that was robust and easy to use, yet flexible enough to utilise for resilience training in the public and private sectors.

Shadow-Planner’s BCP module's open architecture provided the perfect platform. While Shadow Planner’s Crisis Management Module was ideal for training contingency planning, Cranfield’s Defence Academy saw integrated risk analysis as critical to enable organisations to reduce the probability of an event occurring and to minimise the possible effects of disruptions. In response Office-Shadow and the Defence Academy jointly developed the Risk Management Module. MORE >>