Risks Management


Why do you need to have an eye on risks?
What do we have to do then to protect us from risks?
Qualify and Quantify


WHY DO YOU NEED TO HAVE AN EYE ON RISKS?

Do you plan to build a Telecom infrastructure in a cheap place? Maybe you forgot to study local green rules that forbid such endeavors and that can knock down your plan.
fireDo you want to sell equipments to a new retail supplier in a fast growing area? Maybe you ignored that customs clearance dates are higher than your delivery dates and you’ll face problems to meet your contract compromises.

Whatever you do in your industry sector, you are surrounded by risks that threaten every day and will affect your business in one form or another, and therefore you must be prepared to face them.

A thorough analysis of the risks involving your company processes, projects, assets, human resources or general management is essential to prevent their occurrence and, ultimately, their consequences.

Titanic sank due to underestimation of risks associated to the travel, and lack of consequences planning. Don’t let your company become the next Titanic in these difficult times.


Falls water WHAT DO WE HAVE TO DO THEN TO PROTECT US FROM RISKS?

To protect your company of the awesome risks that naturally thread it everyday, you have to

  • Identify them: What are the potencial risks we face with each movement?
  • Assess impact: What will happen if risk materializes?
  • Assess probability: What is the real probability of such a planned risk to happen?
  • Combine impact vs. probability to assign priorities and focus on the most impacting & probable risks.


QUALIFY AND QUANTIFY

After assessing the impact and probability, we can generate a table and sort it by assigning priorities to those risks which pose a greater threat (qualify) and then define actions to those which were rated as priorities (quantify). Check the table below to see how probability of occurrence and impact are crossed to get priorities.

Risk qualify Impact
0.10 0.50 0.60 0.70 0.90
Probability 0.1 0.01 0.05 0.06 0.07 0.09
0.2 0.02 0.10 0.12 0.14 0.18
0.3 0.03 0.15 0.18 0.21 0.27
0.4 0.04 0.20 0.24 0.28 0.36
0.5 0.05 0.25 0.30 0.35 0.45
0.6 0.06 0.30 0.36 0.42 0.54
0.7 0.07 0.35 0.42 0.49 0.63
0.8 0.08 0.40 0.48 0.56 0.72
0.9 0.09 0.45 0.54 0.63 0.81