Download risk managment

Risk Managment
Prepared by :
Iyas A. Fares
Topic Outlines
Definition
 Steps in risk management
 Risk assessment
 Risk levels
 Risk evaluation
 Risk measurement
 Reviews
 Risk in banking
 Conclusion
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Risk Management Process
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Risk
 Uncertain or chance events that planning can not overcome or control.
Risk Management
 A proactive attempt to recognize and manage internal events and
external threats that affect the likelihood of a project’s success.

What can go wrong (risk event).

How to minimize the risk event’s impact (consequences).

What can be done before an event occurs (anticipation).

What to do when an event occurs (contingency plans).
7–4
DEFINITION
 Risk management is a logical process or approach
that seeks to eliminate or at least minimize the level
of risk associated with a business operation.
 Essentially, the process identifies any type of
situation that could result in damage to any resource
within the possession of the company, including
personnel , then take steps to correct those factors that
are highly likely to result in that damage.
Where We Are Now
7–6
STEPS IN RISK MANAGEMENT
RISK ASSESSMENT
A risk assessment is simply a careful examination of
what, in your work, could cause harm to people, so
that you can weigh up whether you have taken
enough precautions or should do more to prevent
harm.
It not only helps one to evaluate the risk but also help
in measuring and reviewing the risk. Assessment of
risk identify also the nature of risk associated.


RISK LEVELS
RISK LEVEL
MISSION EFFECTS
Extremely high
Mission failure is hazardous.
High
Degraded mission capabilities.
Moderate
Expected degraded capabilities.
Low
Expected losses have no impact on
mission success.
2. RISK EVALUATION
Once you have identified the threats you face, the
next step is to work out the likelihood of the
threat being realized and to assess its impact.
 One approach to this is to make your best estimate
of the probability of the event occurring, and to
multiply this by the amount it will cost you to set
things right if it happens. This gives you a value
for the risk.

3. MANAGING RISK
 Once
you have worked out the value of risks
you face, you can start to look at ways of
managing them.
 When you are doing this, it is important to
choose cost effective approaches - in most
cases, there is no point in spending more to
eliminating a risk than the cost of the event if it
occurs.
4. REVIEWS
 Once
you have carried out a risk analysis and
management exercise, it may be worth
carrying out regular reviews.
 These might involve formal reviews of the risk
analysis, or may involve testing systems and
plans appropriately.
RISK MANAGEMENT IN BANKING
 In
the course of their operations, banks are
invariably faced with different types of risks
that may have a potentially negative effect on
their business.
 Banks are therefore required to form a special
organizational unit in charge of risk
management.
Seven Principles of Risk Management
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Maintain a global perspective


Take a forward-looking view


Think about risks that may arise in the future; establish contingency
plans
Encourage open communication


View software risks within the context of a system and the business
problem that is is intended to solve
Encourage all stakeholders and users to point out risks at any time
Integrate risk management

Integrate the consideration of risk into the software process
cont
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Emphasize a continuous process of risk management
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Develop a shared product vision

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Modify identified risks as more becomes known and add new risks as
better insight is achieved
A shared vision by all stakeholders facilitates better risk identification
and assessment
Encourage teamwork when managing risk

Pool the skills and experience of all stakeholders when conducting risk
management activities
The Risk
Management
Process
FIGURE 7.2
7–16
CONCLUSION

We live in a world that is full of risk, large
degree have created ourselves, and where
naturally occurring risk hardly exists
anymore.