Question

Now that you conducted your risk assessments (quantitative/qualitative/mixed-method) for your various assets, it is now time to develop a mitigation plan. What is a risk mitigation plan and why is it just as important as the previous steps? Cost-Benefit Analysis (CBA) is an important tool when trying to identify risk, list some elements that are important when conducting a CBA. Why is it important that senior management know these elements that you have identified?

Need 300 word

Answer 1

Risk mitigation Planning also called as Risk Handling is a process or strategy that identify, evaluate, select and implement the risk effectiveness throughout the project.It is used to reduce the adverse effects in the Project.There are total four types of risk mitigation are:

• Risk avoidance - Risk avoidance is a process of avoiding the activity by doing the other activity and eliminating the root cause or consequences.By stepping down from the activity involving the risk and successfully avoid the occurrence of the undesired event.
• Risk Controlling - Risk Controlling is a process of controlling the risk by managing the root cause or the consequences.
• Risk Transfer/sharing - Risk transfer is a process of transferring the risk to the third party like insurance company or the subcontractors.
• Risk assumption - Risk assumption is a process for a small risk where the cost of insuring the against the risk is high over a time than the overall losses.

Some of the importance of Risk mitigation Planning are:

• Use to determine the risk in the project.
• Help to develop the high level mitigation strategy.
• Identify the action needed to implement the mitigation strategy.
• Enhances the company revenues by saving the expenses.
• Increases the sense of responsibility and accountability of the risk taking manager
• Helps the employee/manager to explore new opportunities

Cost-Benefit Analysis is a process or the strategy used to analyse or compare the cost and the benefits of an intervention, where both the cost and benefit are in the monetary form.When the manager try to identify the risk in the project, cost and benefit in the project is always come.So, to analyse the cost and benefit of the project.Managers generally used the  Cost-Benefit Analysis.

The  Cost-Benefit Analysis contains the

• Functional area analysis (FAA)
• Functional need analysis (FNA)
• Functional solution analysis (FSA)

And these analysis help to define the mission , identify the capabilities, identify the gaps and provide the recommendation.

Some of the elements are:

1. Estimate the saving and the expenses - Cost-Benefit Analysis helps to determine the on-going cost associated with the system and also the savings.
2. Break even point - It help to calculate the time where the cost saving matched the accumulated the development expenses.
3. Calculate the return on investment - Cost-Benefit Analysis help the manager to calculate the ratio of the projected cost saving versus amount invested.

These play a vary vital role when we use the Cost-Benefit Analysis.Because when we analyse the cost and benefit of the project.Seniour Management should know the current status of the project.So, when we applied these element it tells the ongoing cost of the project as well as the what will company get in return after the completion the project.By analyzing these factors/elements.Seniour management will further take the decision about the project.So, by the applying the Cost-Benefit Analysis manager and the senior management will able to analyse the on-going cost of the project.what they get in return and use the BEP to know the inflation and the depreciation of the project.