BSBRSK 501 – MANAGE RISK

ELEMENT 4: SELECT AND IMPLEMENT TREATMENT

 MOST APPROPRIATE OPTIONS FOR TREATING RISKS

A range of options is available to treat risks. If you determine that the level
of risk is extremely high, you need to put strict measures in place to treat
the risk. On the other hand, if the level of risk is negligible and you are
alert to it, there is no need for action. Sometimes, you might find the
expected benefits of a high-level risk outweigh possible negatives.
Alternatively, the risks may be too great and you should abandon the idea
altogether. Your goal is to eliminate or avoid the risk where possible, and
control the outcome should the risk materialise
A range of options is available to treat risks. If you determine that the
level of risk is extremely high, you need to put strict measures in place to
treat the risk. On the other hand, if the level of risk is negligible and you
are alert to it, there is no need for action. Sometimes, you might find the
expected benefits of a high-level risk outweigh possible negatives.
Alternatively, the risks may be too great and you should abandon the
idea altogether. Your goal is to eliminate or avoid the risk where possible,
and control the outcome should the risk materialise.
Here are five options to control or manage risks
1. Accept the risk
2. Avoid the risk
3. Transfer the risk
4. Mitigate the risk
5. Exploit the risk
https://aspire-solidus-production.s3-ap-southeast-2.amazonaws.com/assets/
 Develop a risk treatment plan
Determine the level of treatment plans required for each risk level. For example, for risks rated as
‘high', a treatment plan must be developed. However for risks rated as ‘low' and ‘very low' that
have improvement opportunities, development of a treatment plan may be at the discretion of
the partner or partners.
Effective risk treatment relies on attaining commitment from key practice stakeholders and
developing realistic objectives and timelines for implementation.
For each risk identified in the risk assessment, detail the following:
1. Specify the treatment option agreed - avoid, reduce, share/transfer or accept.
2. Document the treatment plan - outline the approach to be used to treat the risk. Any
relationships or interdependencies with other risks should also be highlighted.
3. Assign an appropriate owner - who is accountable for monitoring and reporting on progress of
the treatment plan implementation. Where the treatment plan owner and the risk owner are
different, the risk owner has ultimate accountability for ensuring the agreed treatment plan is
implemented.
4. Specify a target resolution date - where risk treatments have long lead times, consider the
development of interim measures. For example, it is unlikely to be acceptable for a residual risk to
be rated ‘high' and to have a risk treatment with a resolution timeframe of two years.
Evaluating a risk management plan sometimes can be very frustrating. It is definitely a
time consuming process and also requires more of human efforts. Therefore, it is
always better to analyse and evaluate a plan at every stage otherwise it will result in
wastage of time, finances and efforts. In order to keep a check on it, specialized teams
of risk managers can be appointed. The whole event can be outsourced to a risk
management firm. The professionals at the firm can help you design, develop,
implement and evaluate a risk management plan for your company.

1. Problem Analysis
• Match the Outcomes of a Risk Management Plans with its Objectives
• Evaluate If All the Activities in the Plan are Effective
• Evaluate the Business Environment
• Make Possible Changes in Faulty Activities
• Review the Changed Activities
 POTENTIAL RISK TREATMENTS

Once risks have been identified and assessed, all techniques to manage the
risk fall into one or more of these four major categories:

Avoidance (eliminate, withdraw from or not become involved)

Reduction (optimize - mitigate)
Sharing (transfer - outsource or insure)
Retention (accept and budget)

https://www.slideshare.net/mcurtis2010/presentation-manage-risk
 What are the 5 Risk Management Steps in a Sound
Risk Management Process?

Step 1: Identify the Risk. You and your team uncover, recognize and
describe risks that might affect your project or its outcomes. There are a
number of techniques you can use to find project risks. During this step you
start to prepare your Project Risk Register.

Step 2: Analyze the risk. Once risks are identified you determine the
likelihood and consequence of each risk. You develop an understanding of
the nature of the risk and its potential to affect project goals and
objectives. This information is also input to your Project Risk Register.
Step 3: Evaluate or Rank the Risk. You evaluate or rank the risk by
determining the risk magnitude, which is the combination of likelihood and
consequence. You make decisions about whether the risk is acceptable or
whether it is serious enough to warrant treatment. These risk rankings are
also added to your Project Risk Register.

Step 4: Treat the Risk. This is also referred to as Risk Response Planning.
During this step you assess your highest ranked risks and set out a plan to
treat or modify these risks to achieve acceptable risk levels. How can you
minimize the probability of the negative risks as well as enhancing the
opportunities? You create risk mitigation strategies, preventive plans and
contingency plans in this step. And you add the risk treatment measures for
the highest ranking or most serious risks to your Project Risk Register
Step 5: Monitor and Review the risk. This is the step where you take your Project Risk
Register and use it to monitor, track and review risks.

Risk is about uncertainty. If you put a framework around that uncertainty, then you
effectively de-risk your project. And that means you can move much more confidently
to achieve your project goals. By identifying and managing a comprehensive list of
project risks, unpleasant surprises and barriers can be reduced and golden
opportunities discovered. The risk management process also helps to resolve problems
when they occur, because those problems have been envisaged, and plans to treat
them have already been developed and agreed. You avoid impulsive reactions and
going into “fire-fighting” mode to rectify problems that could have been anticipated.
This makes for happier, less stressed project teams and stakeholders. The end result is
that you minimize the impacts of project threats and capture the opportunities that
occur.

https://continuingprofessionaldevelopment.org/risk-management-steps-in-risk-management-process/