Risk Control Techniques, Limitations And Challenges

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Risk Control Techniques, Limitations and Challenges 6 April 2016, Posted by Shuhui Yang (Team N) D ecisions are along with uncertainties, which always indicate a potential loss. Therefore, risk analysis and management have played an increasingly important role in business decisions. As the demands arise, risk analysis techniques are gradually improving and perfecting. Various tools are also developed to support data analysis and provide decision-making suggestions. This blog is aimed to introduce the cutting edge techniques of risk analysis, as well as reveal its limitations and challenges. Techniques Overview The risk control process normally includes three steps: risk…show more content…
People make risk response plans both at the beginning and during the execution. The former one bases on the collected information, historical experiences, and expert judgement, while the latter one is able to obtain actual execution feedbacks and implement a more accurate adjusted plan. Each step contains multiple effective and efficient techniques. The following table provides an overview of dominant techniques applied in each step and next part further illustrates two of the cutting edge – Expected Monetary Value (decision tree) and Monte Carlo Simulation. Techniques in Risk Control Step Techniques Risk Identification Information collecting: interview, brainstorm, Delphi technique. Analysis: assumption analysis, root cause analysis, checklist analysis, SWOT analysis. Diagramming: cause and effect diagram, flow charts, influence diagram. Expert knowledge and judgement. Risk Analysis Qualitative analysis: probability and impact assessment & matrix, risk categorization, risk urgency assessment, expert knowledge. Quantitative analysis: sensitivity analysis, probability distributions, Expected Monetary Value analysis (EMV), Monte Carlo Simulation, cost/schedule risk analysis. Risk Response Planning Risk reassessment, risk audits, variance can trend analysis, technical performance measurement, reserve analysis. Source: https://success.clarizen.com/hc/en-us/community/posts/203996208-Risk-Management-Useful-Tools-and-Techniques
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