Importance Of Model Risk

Many types of risk are created – risk to the project, to the organization, to the employees involved and to the individuals supporting the change.

impact of the identified risks to the organization based on key business drivers (loss of life, loss of

The first step in the process is to identify and define the problem at hand. During this step, all the information is gathered and looked over. This allows for the problem to be clearly identified and hopefully making the whole process easier. Step two of the process is to begin generating possible solutions. In this step, managers can begin formulating one or several potential solutions (Lombardi, Schermerhorn, & Kramer). Before going onto step three, some additional information may be required, because step three is when a plan of action is chosen. In the fourth step, the chosen plan is implemented. It is the responsibility of the manager to make sure this portion goes smoothly. Everyone on the team should know exactly what they should be doing. The final step in the process is to review the results. In reviewing the outcome of the action plan that has been chosen, you may find things that need to be altered and you may find things that are going perfectly. At this point the appropriate changes should be made.

Identify the current problem: The first step is identifying what in the system is going wrong and what needs to be changed. So first you should start with audit process, which will identify current issues or potential risks, which may occur in your company. From this report you will be able to know which areas in your company in need to be improved firstly. Also you should review which processes have higher impacts on your company, stakeholders, resources

There will be corrective action plan made by the Project Manager. The corrective action plan will be meeting with the team members and raise the issues mentioned by stakeholders. Each member’s performance will be evaluated and also include measurements for achieving the intended outcomes and anticipated timeline for

At the end all the risk are finance related, because the liability’s cost money and this will have an effect in the company’s earnings, so what is important is not only to try to avoid such events but also to be prepare in case they happen and have a plan, is like the saying “Hope for the best but be prepare for the worst”.

Identify the potential risks which affect the company and manage these risks within its risk appetite;

The next step will be to prepare the operation plans. The operation plans should also reflect the scope and goals of the business, and they should consider several elements like competition in the market, infrastructure and many things that can be fundamental in ensuring the business gains a competitive advantage. The last step is to integrate plans. It is important to make sure that the plans have been properly balanced so that they can be able to support one another. The plans should be clearly communicated to the people implementing them. It is also important to review the plans from time to time to make sure that they in line with the trends in the business environment.

Defined by Coopers textbook, risk is the exposure to the consequences of uncertainty and has two elements: the likelihood of something happening that has an impact on the project objectives, and the positive or negative consequences of something impacting the project objectives (Cooper, Grey, Raymond, & Walker, 2005)

Phase 1 - Establish the foundation. These alignment and analysis steps are necessary to obtain executive sponsorship and the commitment of resources from all stakeholders. Without a basis of business impact analysis and risk assessment, the plan cannot succeed and may not even be developed.

Provide an action plan for the implementation and communication of the solution. Your action plan should include actions, timescales and required

Others risks involved in such projects include the external risks. These risks are linked to the project externally. They are, for example; new labor regulations, weather, changes in ownership, and in some cases, foreign policies might affect if the project is being carried out in a foreign place. Catastrophic risks can also be categorized under the external risks. The risks include occurrences such as; terrorism, earthquakes, floods, civil arrests and unavoidable circumstances that are most likely to occur unexpectedly. These are physical risks are normally beyond control.

To recognize the gabs between the current and future state, set priorities and create high level action plan.

The first risk, and possibly the biggest, is the risk of lack of or incorrect communication between the different entities within the company. There are also risks associated with design and testing, forecasting, manufacturing, and sales.

The project manager working with the project team and project client will ensure risks are actively identified, analyzed and managed throughout the life of the project. Risks will be identified as early as possible to minimize their impact. This can be done using several ways like