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In this section of the course,

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we're going to cover risk management.

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So what exactly is risk management?

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Risk management is a fundamental process

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that involves identifying,

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analyzing, treating, monitoring, and reporting risks

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to ensure that an organization's objectives are achieved

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in a manner that is going to consistent with its risk appetite.

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This systematic approach to understanding

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and addressing uncertainty is a huge part of decision making

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in any organization regardless of its size or vector.

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First off, we have risk identification.

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The first step in risk management lifecycle

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is risk identification.

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This involves recognizing the potential risk

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that could negatively impact an organization's ability

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to operate or achieve its objectives.

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Risk identification is a proactive process

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with a goal of creating a comprehensive list of risk

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based on those events that might prevent the organization

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from achieving its objectives.

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Next, we have risk analysis.

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Now, once risk have been identified,

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the next step is risk analysis.

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This involves evaluating the likelihood

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and potential impact of the identified risk.

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Risk analysis can be qualitative,

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which means you're using categories and scales to rate risk,

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or quantitative, using numerical values.

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The outcome of this step is to prioritize a list of risk

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based on their potential severity,

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which can then be used to guide the risk treatment process.

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The third step is risk treatment.

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Risk treatment involves developing strategies

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to manage identified risk.

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These strategies can include risk avoidance,

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risk reduction, risk sharing, or risk acceptance.

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The choice or strategy

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depends on the risk potential's impact

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and the organization's risk tolerance.

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The goal of risk treatment is to reduce the potential impact

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of a risk to an acceptable level.

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Fourth, we have risk monitoring.

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Risk monitoring is an ongoing process

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that involves tracking identified risk,

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monitoring residual risk, identify a new risk,

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and reviewing the effectiveness

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of the risk management process.

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This process is a crucial step

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because it ensures that the risk management process

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is dynamic and responsive to changes

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in the organization's internal and external environment.

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Finally, we have risk reporting.

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The final step in the risk management lifecycle

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is risk reporting.

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This involves communicating information about risk

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and the effectiveness of the risk management process

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to all relevant stakeholders.

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Risk reporting can take many forms,

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including dashboards, heat maps, or detailed reports,

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and it should be tailored to make sure

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that the needs of the audience are met.

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This step is crucial for ensuring accountability

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and supporting informed decision making.

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So in this section of the course,

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we'll be focusing solely on domain five

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and specifically objective 5.2,

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which states that you must be able to explain

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elements of the risk management process.

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First, we will discuss the different types

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of risk assessment frequency.

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Risk assessment frequency simply refers

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to how often the risk assessment process is conducted

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within the organization.

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This can vary based on the nature of the organization

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and the type of risk involved.

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We're going to cover ad hoc, recurring, one time,

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and continuous risk assessment.

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Then we're going to jump into a discussion

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of risk identification, where we will discuss

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how a business needs to identify potential risks

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and how a business impact analysis must be performed.

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And we're also going to cover many concepts,

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including recovery time objective,

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recovery point objective,

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mean time to repair, and mean time before failure.

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Next, we're going to talk about qualitative risk analysis.

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This is a risk analysis method that involves assessing

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and prioritizing risk based on the likelihood of occurrence

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and potential impact using descriptive

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or categorical scales.

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After that, we're going to discuss

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the other type of risk analysis,

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which is quantitative risk analysis.

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This is a risk analysis method

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that involves numerically estimating

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the probability of each risk

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and its potential impact on project objectives.

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It uses numerical data

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and statistical techniques to calculate risk levels.

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Then we're going to discuss

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the different risk management strategies,

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and these can be risk transfer, risk acceptance,

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risk avoidance, or risk mitigation.

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After that, we will cover risk monitoring and reporting,

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including the key points that you can look over

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while performing these steps

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and how they can affect your risk management process,

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especially in the long term.

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Finally, we're going to take a short quiz

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to see what you learned during this section of the course

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and review each of those quiz questions to fully ensure

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that you can explain why the right answers were right.

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So let's get started with our coverage

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of risk management in this section of the course.