Question

Telecommunication Governance 1:

Give at least 3 real life examples of the impact vs. probability risk management actions and their individual application.

Answer 1

Today risk management is an important function.Complex an ambitious projects of the companies must be executed successfully in an uncertain and risky environment.

You need to prioritize the risks,so that you can focus the majority of your time and efforts on the most important risks.

probability=A risk is an event that "may" occur.The probability of it occurring ranges between 0 to 100.

Impact=A risk, by its very nature,always has a negative impact.However the size of impact varies in terms of cost and impact on health,human life,or some other critical factors.

Risk management is a process of identifying,assesing,reducing and accepting risk. Efforts to avoid,mitigate and transfer risk can produce significant returns.Risk management also leads to the culture of explicitly accepting risks as oppose to hiding in the optimism that challenges and failures are not possible.

Following are some examples:-

IT Sector

An organization is considering large scale projects.They conduct risk identification and assessment process and discover large number of high probability, high impact risk.They decide to look at alternative approaches such as incremental improvements

Quality of life

An employee avoids quality of life risks by rejecting a job offer from a firm that doesn't align to their lifestyle or values.

Customer Credit Risk

A wholesaler conduct a credit risk analysis on its current customers.The firm decides to stop extending 90 days invoice terms to several customers it view as a high risk.Such customers as ask to pay upfront for their new orders.

Space Technology

Producers for the maintenance to a spacecrafts are carefully designed to mitigate risk such as dropped tools that becomes dangerous space junk in the same orbital range as a spacecrafts.

In Information Technology, Risk management includes "Incident Handling", an action plan for dealing with intrusions, cyber-theft, denial of service, fire, floods, and other security-related events. According to the SANS Institute, it is a six step process: Preparation, Identification, Containment, Eradication, Recovery, and Lessons Learned.

Enterprise

In enterprise risk management, a risk is defined as a possible event or circumstance that can have negative influences on the enterprise in question. Its impact can be on the very existence, the resources (human and capital), the products and services, or the customers of the enterprise, as well as external impacts on society, markets, or the environment. In a financial institution, enterprise risk management is normally thought of as the combination of credit risk, interest rate risk or asset liability management, liquidity risk, market risk, and operational risk.

Medical device

Risk management is a process for identifying, evaluating and mitigating risks associated with harm to people and damage to property or the environment. Risk management is an integral part of medical device design and development, production processes and evaluation of field experience, and is applicable to all types of medical devices.

Natural disasters

It is important to assess risk in regard to natural disasters like floods, earthquakes, and so on. Outcomes of natural disaster risk assessment are valuable when considering future repair costs, business interruption losses and other downtime, effects on the environment, insurance costs, and the proposed costs of reducing the risk.