In this section of the course,
we're going to cover risk management.
So what exactly is risk management?
Risk management is a fundamental process
that involves identifying,
analyzing, treating, monitoring, and reporting risks
to ensure that an organization's objectives are achieved
in a manner that is going to consistent with its risk appetite.
This systematic approach to understanding
and addressing uncertainty is a huge part of decision making
in any organization regardless of its size or vector.
First off, we have risk identification.
The first step in risk management lifecycle
is risk identification.
This involves recognizing the potential risk
that could negatively impact an organization's ability
to operate or achieve its objectives.
Risk identification is a proactive process
with a goal of creating a comprehensive list of risk
based on those events that might prevent the organization
from achieving its objectives.
Next, we have risk analysis.
Now, once risk have been identified,
the next step is risk analysis.
This involves evaluating the likelihood
and potential impact of the identified risk.
Risk analysis can be qualitative,
which means you're using categories and scales to rate risk,
or quantitative, using numerical values.
The outcome of this step is to prioritize a list of risk
based on their potential severity,
which can then be used to guide the risk treatment process.
The third step is risk treatment.
Risk treatment involves developing strategies
to manage identified risk.
These strategies can include risk avoidance,
risk reduction, risk sharing, or risk acceptance.
The choice or strategy
depends on the risk potential's impact
and the organization's risk tolerance.
The goal of risk treatment is to reduce the potential impact
of a risk to an acceptable level.
Fourth, we have risk monitoring.
Risk monitoring is an ongoing process
that involves tracking identified risk,
monitoring residual risk, identify a new risk,
and reviewing the effectiveness
of the risk management process.
This process is a crucial step
because it ensures that the risk management process
is dynamic and responsive to changes
in the organization's internal and external environment.
Finally, we have risk reporting.
The final step in the risk management lifecycle
is risk reporting.
This involves communicating information about risk
and the effectiveness of the risk management process
to all relevant stakeholders.
Risk reporting can take many forms,
including dashboards, heat maps, or detailed reports,
and it should be tailored to make sure
that the needs of the audience are met.
This step is crucial for ensuring accountability
and supporting informed decision making.
So in this section of the course,
we'll be focusing solely on domain five
and specifically objective 5.2,
which states that you must be able to explain
elements of the risk management process.
First, we will discuss the different types
of risk assessment frequency.
Risk assessment frequency simply refers
to how often the risk assessment process is conducted
within the organization.
This can vary based on the nature of the organization
and the type of risk involved.
We're going to cover ad hoc, recurring, one time,
and continuous risk assessment.
Then we're going to jump into a discussion
of risk identification, where we will discuss
how a business needs to identify potential risks
and how a business impact analysis must be performed.
And we're also going to cover many concepts,
including recovery time objective,
recovery point objective,
mean time to repair, and mean time before failure.
Next, we're going to talk about qualitative risk analysis.
This is a risk analysis method that involves assessing
and prioritizing risk based on the likelihood of occurrence
and potential impact using descriptive
or categorical scales.
After that, we're going to discuss
the other type of risk analysis,
which is quantitative risk analysis.
This is a risk analysis method
that involves numerically estimating
the probability of each risk
and its potential impact on project objectives.
It uses numerical data
and statistical techniques to calculate risk levels.
Then we're going to discuss
the different risk management strategies,
and these can be risk transfer, risk acceptance,
risk avoidance, or risk mitigation.
After that, we will cover risk monitoring and reporting,
including the key points that you can look over
while performing these steps
and how they can affect your risk management process,
especially in the long term.
Finally, we're going to take a short quiz
to see what you learned during this section of the course
and review each of those quiz questions to fully ensure
that you can explain why the right answers were right.
So let's get started with our coverage
of risk management in this section of the course.