Plan To Accommodate Change

Apart from identifying risks and opportunities—which are positive effects of risks on a project through effective mitigation techniques—it is imperative to assess mitigation strategies and monitor the techniques being implemented to measure overall project success. The risk and opportunity management process is described as a means of identifying, evaluating, and managing the whole range of business risks and opportunities confronting an institution (Mendip District Council, 2015). Managing risks and opportunities is very important to ensure that an organization has the appropriate controls in place to provide adequate risk mitigation and ensure that opportunities are fully maximized.

The history of risk management can be traced back as far as the time of the Asipu people in the Tigris-Euphrates Valley, who provided services similar to those of contemporary risk consultants by analyzing daily problems and offering recommendations. In recent times, risk has come to be defined as encompassing not only threats or negative outcomes but also positive opportunities.

A risk log or risk register is a tool used to document the risk management process. It is a very important tool for ensuring adequate monitoring of the risk management plan. First, identify the potential risks associated with a given project and record them in a log for the relevant venture or organization. Next, develop strategies to mitigate the potential risks, and then determine how to address them.

Once risks have been identified and assessed, four decision options are available: avoid, accept, reduce or mitigate, and transfer. In all cases, an organization cannot insure against or transfer every risk. Therefore, analysis and assessment should be conducted to make informed decisions about which risks to accept, avoid, and mitigate. When the right balance is achieved, a value proposition is obtained.

Mitigation Techniques

Every organization should put the appropriate controls in place for a given risk. Other than the most undesirable outcomes, such as the death of a person, a mitigation strategy allows for the possibility of some loss arising from a risk. Meanwhile, every control action has associated costs, so the control should provide value for the money spent when compared with the risk being controlled. In general, the objective of a control is to reduce risk rather than eliminate it. When organizations decide to mitigate or reduce risk, the identified mitigation strategies that can be implemented include preventative, detective, directive, and corrective controls.

Benefit: Value Proposition

The implications of risk management are reflected in the successes it brings to an organization or project. Successful risk management involves balancing risk and cost. If all the questions in the risk and cost columns are answered positively, the potential benefits of risk management can be achieved. Therefore, an organization that understands risk and risk management can take advantage of the opportunities that arise. Hence, risk management can provide a value proposition.

To gain a better understanding of the mitigation strategies that can be implemented, the following resources can be explored:

• Oestreich, T., Buytendijk, F., & Hatch, T. (2011). Uncertainty management: Risk and performance, two sides of the same coin.
• Olsson, R. (2007). In search of opportunity management: Is the risk management process enough?
• Wallis, P. (2012). Risk management achieving the value proposition.
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