Risk Management Software: Methodology
Risk management software solutions serve to assist in risk management. However, it cannot cover the entire risk management process. Therefore, prior to get start with a software product we need to establish a risk management methodolgy on which our risk efforts then can be built.
The risk management methodology used for RiskDecision is a development by Engineering Management Systems, Inc. (EMS, Inc.). First, we will take a look at this methodolgy. In a second step we will show how RiskDecision supports this methodolgy.
Methodolgy of RiskDecision
Uncertainties which lie in the future are nothing static. The probability of occurrence changes with the future event approaching and incidences occurring in the meantime. And they change with regard to their impact which mostly increases (for risks, decreases for opportunities) the nearer the future event comes, for the reaction time on the occurrence shortens.
The dynamic of uncertainties requires a management system which takes into account such changes. Therefore the management system has to be a closed control loop with feedback loops as it is realised in the RiskDecision uncertainty management process:
You can see that risk management - similar to quality management - is no one way journey but needs to be performed on a regular basis. This is the only way to integrate modifications on new uncertainties and their probability and impact - and keep risk management up-to-date.
To get started with risk management you will need to give it a direction which is called mission statement or project statement. These are specified by objectives so that everybody gets an awareness of the expected outcome.
In a second step a project or business plan is established. This includes a deduction of the project or business specific uncertainty structure. RiskDecision provides user-defined categories, a work breakdown structure, and a timeline to distinguish uncertainties identified in the next step.