Purpose of Risk Assessment
Risk evaluation as a management process is the measurement of quantitative and qualitative significance of a threat given its occurrence to a given situation (Landoll, 2006). Possibility measurement is important for a number of reasons to an individual or a company. One, threat evaluation enables the engineer or developer to understand the degree of damage a risk can cause to a project given its occurrence (Landoll, 2006). Given the comprehension, the developer can determine whether the threat is tolerable or intolerable in the project. Two, risk measurement facilitates project cost reductions through timely depiction of location of occurrence, effect and control measures (Landoll, 2006). Third, the management evaluation gives the magnitude of loss form the threat. Through the degree of loss, a developer can lean his project in specific areas to reduce the magnitude of loss. The project becomes more flexible and less susceptible to risks. Fourth, risk assessment gives the probability of threat occurrence. The measurement facilitates proper project planning in the definition of the time scope necessary for development completion (Landoll, 2006). The main purpose of threat evaluation is to ascertain high levels of project quality through timely control and reduction of risks.
Purpose of Risk Scope
Threat scope is a sub branch of risk evaluation applied to define time margins given the occurrence of a risk in a project (Dobson & Hietala, 2011). In detail, scope defines the time required to control or remove a threat in a project. The process depicts the extent of damage in terms of time and cost. One of the purposes of scope is the enabling of accurate time scheduling of the project to allow flexibility given a risk incidence (Dobson & Hietala, 2011). The project manager is able to key in accurate time and cost margins in the project planning. Another role of scope is to highlight the link of risk assessment and management. Scope eases the transition from risk identification to control (Dobson & Hietala, 2011). In facilitating threat control, scope highlights all the required processes and tools the developer will encompass in the process.
Purpose of Risk Identity
Risk identity is defined as the probability of an adverse event happening. Threat identity does not entail complete elimination of risk, but minimization of its effects to an acceptable level (Landoll, 2006). Risk recognition is performed in project management for one primary purpose. The function is the derivation or formulation of appropriate controls for the specific threat (Landoll, 2006). Each hazard in a project is unique in terms of damage. Threat recognition applies its specific nature to formulate the best algorithm to control it within the development process. As stated before, risk identity aims at control and not threat termination. The main reason behind the reasoning is that controls are required to be loose to enable development or productivity. Complete functionality of controls in risk management constrains development or productivity (Landoll, 2006).
Risk Assessment Methodology
The threat assessment of choice is the one used by Deloitte. The company integrates information technology in the measurement process. Technology in production and development is a vital factor in the ascertaining of high levels of process accuracy, efficiency, effectiveness and quality (Dobson & Hietala, 2011). Deloitte assessment recognizes and groups risks into three flagged areas where the developer can attain fast comprehension of the risk. The areas are green, orange, and red in order (Dobson & Hietala, 2011). The level of risk damage increases in the same order. A green threat is tolerable, orange is debatable depending on the project while red is extremely hazardous. The assessment process is fast, easy, and accurate removing project time lags through quickened comprehension and procedure transitions (Dobson & Hietala, 2011).
Dobson, I. & Hietala, J. (2011). Risk management: The Open Group guide. Zaltbommel: Van Haren Pub.
Landoll, D. J. (2006). The security risk assessment handbook: A complete guide for performing security risk assessments. Boca Raton, FL: Auerbach Publications.
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