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Hrm 531 Week 3 Risk Analysis Paper

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In my past job, the company mandates risk assessment before doing for any business transactions, so that we are in compliant with relevant regulations and do not do any risky deals that end up with litigation or incur losses to our business. The guidelines also apply for non-business transactions and any internal decisions. The strategy is to take a risk that is known and manageable or spread, so that we add value to the company's profit and shareholders. The task was to scale the current information system, so that we can comply with regulatory requirement which always has time commitment.
The challenge is some of the past development work was done by a consultant. We have option to scale the current work which is not an industry standard and end up paying more money and band aids fixes or develop a new program that we can design and manage for our future growth knowing future growth is inevitable. The risk of continuing the current information system program is low for now, but it will be a major replacement issue for the future growth that could cost the company millions and lost business opportunities. Developing a new information system program is a risky choice from time …show more content…

The probability of making the new program success is the expected outcomes and the standard deviation of the probability distribution for developing the new program is larger with few uncertainty, hence the greater risk. However, we take lower risk particularly exposed to uncertainty, so plan risk adverse selection and attempt to reduce that uncertainty by carefully evaluating the risks and expected returns of the projects. We documented the evaluation based on the risk appetite guidance. This way we can provide evidence that based on the information available at the time and concluded risk derived the decision using mean-variance

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