Risk management tools and techniques
What are Risk management tools and techniques?
Risk management tools and techniques are the things and ideas which are used to help to control risk in a company. They can help an organisation to identify, evaluate, reduce or remove risk, so that these risks will not have as much of a potential impact onto that organisation. Tools and techniques may be formal or informal.
What are Risk management tools and techniques like?
Risk management tools and techniques are like kitchen utensils. Without good kitchen utensils and the right baking techniques, it can be hard to bake a really good cake. For instance, without a whisk and the right egg-white whisking technique, it can be very hard to make a great meringue. Without the right tools and techniques, it is highly likely that your attempts at risk management will fall flat!
What is the purpose of using Risk management tools and techniques?
The purpose of risk management tools and techniques are to give organisations a good way to create the best possible risk management strategy. Tools and techniques draw upon best practice to help to create guidelines and tricks which can help to make the risk management process much easier to complete.
What are the different types of Risk management tools and techniques?
Flowchart – A flowchart can be used to help to guide an organisation through all of the main steps of risk management.
Checklist – A checklist can include step-by-step guides and tick boxes to help to ensure that everything has been done correctly and on time.
Standards – Standards are formal techniques of risk management which have been created to encourage best practice. Completing standards may help to gain an organization an accreditation.
SWOT Analysis – Creating one of these diagrams can help an organisation to analyse potential risks as well as potential opportunities.
Data Gathering – Finding quantifiable data which can be used to show risk and risk probability.
What’s involved with selecting a Risk management tool and technique?
The risk management tool or technique which is selected can depend on the mission statement of the organisation, or the risk which is being addressed. Some techniques will not work when used to confront certain risks, whereas others will work particularly well. It is a good idea to choose techniques based on precedence. Some tools and techniques are specifically designed to help to identify risk, whereas other tools are designed to reduce or remove risk. The tool should therefore be used at the right stage of the process.
Where does selecting Risk management tools and techniques fit into the risk management process?
Risk management tools and techniques are usually chosen after setting the context. Tools and techniques can be used to identify and evaluate risk, and these tools are usually chosen directly after the context has been set. Tools which are designed to address risk are usually chosen once the risk has been identified.
How do Risk management tools and techniques impact on managing organisational risk?
The tools which are chosen can have a negative or a positive impact upon managing organisational risk. If you choose the correct tools and techniques, it will be much easier for you to monitor and prevent risks, however if you choose the wrong tools and techniques, you could inadvertently make the whole process much more complicated than it needs to be.
What terms are used in Risk management tools and techniques?
Risk – A problem which may occur
Tool – Something which can be used to help to complete an action or process
Technique – A method which can be used to do something well.
Where can I find more information about Risk management tools and techniques?