Risk management evaluates financial risks and identifies potential threats that may occur during the investment process followed by optimal use of resources to monitor and minimize the same. IT security threats and data-related risks, and the risk management strategies to alleviate them, have become a top priority for digitized companies.
Author: Zakaria Ibn Mohamed
To carry out a Risk Analysis, you must first identify the possible threats that you face. This helps companies identify potential risks that could affect projects or deciding whether, or not to move forward with a project. Managing risks also means analysing possible risks. Sometimes it is better to not invest and save the money for an adequate dividend.
Here is a three-step process you can follow to manage your risk
1) Assess the Risk
2) Categorize and evaluate the Risk
3) Treat the Risk
Actually, it is clear that success is affected by your ability to take risks. Whether it is one’s own company, for the team or yourself — We are aiming intelligent risk-taking, which means having a process for making good risk decisions. “Nothing great was ever achieved without taking substantial risks. People who have achieved great things have also typically encountered several bumps of failure on the road to success. By understanding intelligent risk-taking and what gets in its way, your company’s workforce will be ready to take the kinds of intelligent risks that get results” (Sherman Morrison, 2015).
At the UBS Future of Finance Challenge 2019, Chetan Tolia (Head of Digital Business Transformation, Strategic Development Lab) stated, “Innovation means continuously questioning the way we work and think”. Innovation is the process of inventing a new idea into a good service. Moreover, this idea must be good for the economy — costumers’ expectations must be satisfied. There are many different types of examples of innovation like renewable energy, Huawei with the first triple camera system back in early 2018 etc.
Any innovation, to some degree, is a risk. The truth is that often risk and innovation balance each other out early on in the process.
In addition, companies should motivate employees to take smart risks, because every company needs someone who can suggest new ideas in a team meeting and this motivates employees to look at other options and more for helping the company’s business grow (especially in small business).
Innovation is the heart of any company, but risk is one of its biggest enemy.
Cloud providers offer Cloud-Encryption services to encrypt personal data before it is moved from local storage to the cloud storage. In fact, hackers would need the encryption key. Cloud Data Storage is undoubtedly safer than locally stored data, because decryption requires a huge amount of computer processing power. The graphic below shows the differences between Cloud Security and traditional IT Security.
In conclusion, Risk Management is very important for avoiding severe risks like being hacked or before making any decisions, which can be harmful for one’s company or for our life in general. Nevertheless, without taking risks, you will never be successful as Adena Friedman (American Businesswoman) once said, “You can’t be successful in business without taking risks. It’s really that simple”.