What is Risk Mitigation?
Risk Mitigation Planning, Implementation, And Progress Monitoring: Enhancing The Ability To Identify, Evaluate And Monitor Risks
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Introduction to Risk Mitigation
Risk mitigation is a systematic process where an organization develops actions and options to increase opportunities and reduce threats to project objectives. Risk mitigation implementation refers to the process of risk mitigation actions. Risk mitigation progress monitoring tracks identified, new and existing risks, and evaluates the risk process effectiveness throughout the project.
By taking action for risk mitigation, the negative effects of threats and disasters on business continuity are minimized. Although the principle of risk mitigation is to prepare a business for all potential risks, a proper risk mitigation plan will assess the impact of each risk and prioritize planning around that impact. Ideally, an organization would be prepared for all risks and threats and avoid them fully. However, it acknowledges the inevitability of some disasters and situations where threats cannot be avoided completely. To prepare for the worst, an organization should have a proper risk mitigation plan to minimize damage.
How to Do Risk Mitigation Planning?
Risk mitigation planning is an ongoing effort that includes front-end planning of how potential risks will be mitigated and managed once it is identified. Therefore, risk mitigation strategies and specific action plans should be embedded in the project execution plan. Risk mitigation plans should
describe the root causes of identified and quantified risks
assess risk interactions and common causes
find out alternative mitigation strategies, methods, and tools for each potential risk
evaluate and prioritize mitigation alternatives
select and assign the required resources required for specific risk mitigation alternatives
circulate planning results to all project participants for implementation
Risk mitigation planning should be done before completing the project design or allocating funds and should continue till the end of the project by capturing lessons learned and data that can benefit future projects.
Implementation of Risk Mitigation
Successful implementation of Risk Mitigation is possible with the following:
defining what planning, budget, and requirements and contractual changes are needed,
instructing the teams to execute the defined and approved risk mitigation plans,
providing the risk reporting requirements for on-going monitoring, and
archiving the change history
Risk assessment (identification and analysis) is accomplished by risk category and it is important for this process to be worked through the Risk Integrated Product Team (IPT) structure. It is essential to mitigate risk before passing it up to the next level. IPT must communicate potential cost or schedule to all levels of management while the Systems Engineer and Program Manager should understand, examine and approve the mitigation plan. The IPTs should enable effectively implemented mitigation plans and the ongoing results of the risk management process should be documented and notified.
Which are Risk Mitigation Principles?
Risk Mitigation is a step-by-step process that identifies and evaluates risks and selects and implements options including detailing what should be done, who is responsible, when it should be completed, and associated cost and schedule. The most suitable strategy is selected from these mitigation options:
- Risk Avoidance
- Risk Control
- Risk Transfer
- Risk Assumption
Risk mitigation principles must be determined for each type of risk. The major intent of the risk mitigation plan is to reduce the impact of the risk.
Risk Avoidance: Risk avoidance is when the focus is not on eliminating the root cause or consequence of the identified risk but reconfigure the project such that the risk disappears or is minimized to an acceptable value.
Risk Control: Risk control is when you control the risk by handling the cause or consequence by setting up early warning systems by gathering data that provide information to evaluate more precisely the impact, likelihood, or timing of a risk.
Risk Transfer: Risk transfer is when you transfer the risk to a third party like an insurance company or subcontractor.
Risk Assumption: Risk assumption is accepting the loss, or benefit or gain, from a risk when it occurs and where the cost of insuring against the risk would be higher over time than the total losses sustained.
ComplianceQuest Strategies For Risk Mitigation
ComplianceQuest’s Risk Management Software provides unique AI and analytical capabilities to identify potential risks based on history and trending data along with key metrics. With embedded intelligence, quality and risk management leaders can proactively start their risk mitigation efforts before it becomes a huge challenge.
Risk Mitigation from Reactive to Proactive
ComplianceQuest’s Risk Management Solution provides a complete and accurate picture of the risk assessments to analyze hazards associated with any process or activity such as Audits, CAPAs, Change, Customer Complaints, Deviations, Nonconformances, Safety analysis and Environmental impact. Stakeholders can collaborate and prioritize risk mitigation efforts to make the best strategic decisions to neutralize new risks and improve operations.
Rectify Future Problems with Risk Intelligence
With CQ’s Risk Management solution, an organization can determine risk tolerance thresholds and policies to initiate a risk assessment. This enables businesses to access historical data on past risk factors using the risk register to identify and prioritize risk trends and address the highest risks to prevent future events.
Better Collaboration and Efficiency
In today’s information world, there are many risk types depending on the degree of criticality. So, to address those on priority and to manage them well, it is essential to evaluate them and define metrics for real-time insights. ComplianceQuest’s Risk Management is flexible and integrated to drive activities that protect and increase your organization’s value.
Real-time single source of truth
ComplianceQuest’s Risk Management solution is designed to provide management with real-time insight into key risks, risk trends, root cause, corrective and preventive action plans, and future potential of incidents for suitable strategies for risk mitigation.
Frequently Asked Questions
What is Risk Mitigation?
Risk mitigation is the process of planning and developing methods and options to reduce threats or risks. A project team implements risk mitigation strategies to identify, monitor and evaluate risks. The major intent of risk identification and risk analysis is to prepare for risk mitigation. Mitigation involves deduction of the likelihood that a risk event will occur and reduction of the effect of a risk event if it does occur.
What are the Techniques in Risk Mitigation?
Risk Mitigation is the process of minimizing the likelihood of a risk being realized or the impact of risk. When the risk is identified and assessed, you need to mitigate risk in several recognized ways. Some mitigating actions decrease the likelihood of the risk occurring and its impact. To properly mitigate risk, a project manager must know how to effectively and efficiently manage it. Risk mitigation techniques begin at the conception stage of the venture and are followed throughout the life cycle of the project.
Risk Management: The main objective of risk management is to ensure that uncertainties never harm the established business goals. It is a process that involves the identification, evaluation and prioritization of risk to control the probability of its impact.
The major purpose of risk identification is to recognize, uncover and describe risks that could affect the outcome of your project. Identifying an issue and discussing it in advance is important to begin the risk management process. There are various techniques that organizations use during the identification process to establish robust risk management strategies including:
- Self-assessments and interviews
- Risk surveys
- Root cause and Checklist analysis
- SWOT analysis
- Influence diagrams
- Expert judgment
- Assumption analysis
During this initial phase, identifying the causes of an issue and developing preventative techniques is the main focus for identifying risk.
Once risk is identified, it is time to analyze and prioritize them to understand its greatest impact on the project.
The planning step is more about getting ready for risk and continuous management. The following are some simple techniques that will simplify the planning process for you:
- Evaluations and meetings: Ongoing risk assessments and status meetings should be scheduled for the reevaluation of existing risks and the closing of risks.
- Risk audits: Auditing and documenting how existing risk responses are is part of the auditing process.
- Variance and Trend analysis: Cross-checking planned results with actual results using performance data to control and monitor risk events.
- Technical performance measurement: Comparing technical performance measurement as the project is executed to what is on the main schedule.
Risk mitigation is not only understanding and knowing when risks may arise but also planning for them and establishing an ongoing process to continually mitigate risk. With thorough identification, assessment and planning, the risk factor can be properly mitigated and the project rebuilt successfully.