Risk is part and parcel of life. Virtually, every activity we undertake in life has some risks however remote the chances of occurring. For businesses, risks are inherent to their activities. Even though they cannot be completely eliminated, their chances of occurring can be minimized through various mitigation measures. The process of risk identification, analyzing the risk and its source, its impact and finding appropriate mitigation measures is called risk management. Nowadays companies can benefit greatly from services of enterprise risk management software. This is a set of computer programs designed to manage organizational risk.
This software aptly captures the risk and its source, analyses the nature of the risk and assess its possible impact on the organizational activities and by extension the profits of the organization or the achievement of project goals. You realize that a risk, in case it occurs can slow down the activities of the project, leading time extensions and bloated budgets. Effectively this makes the project more expensive than the original estimation. By the use of this software, projects risk can be identified well in advance. This makes it possible for the management to draw up proactive measures to forestall the risk.
This software has the capability of categorizing the risks in terms of their gravity and suggests appropriate mitigation measure. For example, some risks are too serious such that if they happen to hit the project it may just stop for good. Such risks may include fire or destruction of property of the project by natural disasters like earthquake. Risks of this magnitude are transferred to another party who bears the risks on behalf of the organization upon consideration. This is called insurance. The insurance company may also find it worth to transfer the risk to another company or cover it jointly with another insurance company.
The software may also give another profile of risks which are to not so severe. For these, the company usually manages them internally. For example, they might decide to diversify the risk by investing in more than one area. Yet company may set up some fund internally to meet other profile of risks should they occur. It is not a surprise that the company may also decide to ignore some other risks if their impact as indicated by the software is so minimal that the cost of managing them is even higher than then loss they can cause if any.
This risk management software makes the work of risk management much easier, convenient and cost effective. This is through risk identification and profiling so that its impact on the project is determined. It is worth investing in it because as a business you get to realise the value of your money.
Article provided by Project Management Tool
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