A detailed study on Risk mgmt Concept-

risk

1. What is Risk Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consultant 1

2. What are the Business Risks Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consulant 2

3. Some concepts of Risk Management Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consulant 3

4. Why Risk Needs to be Managed Life is full of unexpected events – and it is the same for individuals and business organizations. While some are positive (and, indeed, rare), however, others are negative and may occur with enough frequency to warrant your attention as a business owner.  1. It Helps to Reduce Uncertainty 2. It is Crucial for Successful Planning 3. It helps Reduce Expenses and Losses 4. It Helps Improve Your Reputation Management of risk is vital in making sure a company and leadership understand what the potential problems could be, helping them create solutions for those problems and mitigate their risk. A company that has heavy risk or doesn't have the management aspect worked out may find investors are not excited about giving money. They may also find that they run into more problems then they have money or time to fix. Taking risk management seriously can help a company be prepared for the future. Presented By - Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consulant 4

5. Why Risk Management is Important Risk management is the process of identifying, assessing and controlling financial, legal, strategic, and security risks to an organization’s capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters. If an unforeseen event catches your organization unaware, the impact could be minor, such as a small impact on your overhead costs. In a worst-case scenario, though, it could be catastrophic and have serious ramifications, such as a significant financial burden or even the closure of your business. To reduce risk, an organization needs to apply resources to minimize, monitor and control the impact of negative events while maximizing positive events. A consistent, systemic, and integrated approach to risk management can help determine how best to identify, manage and mitigate significant risks. Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consultant 5

6. Redefining The Risk towards It’s Management Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consultant 6

7. R>Reasoning Reasoning Whatever a person’s role—in business or in life— decisions that involve elements of risk need to be made. Risk comprises two parts: the probability of something going wrong and the negative consequences if something goes wrong . Once a decision is made, logic needs to be applied to it—this is the concept of reasoning. Reasoning is the action of thinking about something in a logical and sensible way . There is a chance of both success and failure in this process. In the risk management process, the probability of something terrible happening based on a decision should be identified; this process is defined as risk analysis. Risk analysis is used to analyze a situation, identify the potential problems, and provide guidance in managing these problems that could undermine key business initiatives or projects. Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consultant 7

8. I>Intelligence Intelligence Risk is always guided by the perceived intelligence of human beings . Whether a certain event is to be considered as a risk is based on a person’s intelligence, knowledge, and understanding of the subject matter, and the ability to handle such risk as acceptable or not acceptable. The risk needs to be identified based on its association with assets or business processes. This identification process requires common intelligence or business intelligence for accepting the risk designation. Once the risk associated with a business process or assets is identified, the risk needs to be addressed.   Effective information is key in the risk management process. After collecting the necessary information, intelligence is applied to manage the risk. Computer-based tools and artificial intelligence (AI) can assist in risk identification and impact analysis.   Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consultant 8

9. S> Strategy Strategy  Risk mitigation requires the development of a strategy that manages the perceived risk . Things to consider include how much risk to avoid, how much risk to mitigate, how much risk to transfer through insurance coverage or some other established process, and how much risk to accept. Enterprise risk management (ERM) and risk management in general cover a wider range of risk factors than any enterprise could potentially face. A risk may seem harmful, but if it does not actually negatively impact the overall health of an enterprise or its ability to meet its business objectives, then it is an acceptable risk. The uncertainties in business have given rise to the application of strategic risk management. Business owners and process owners need to perform a risk analysis along with their business impact analysis. After completing a business impact risk analysis , strategies must be applied with respect to the treatment of each perceived risk area. This strategic process guides business owners and process owners on what action is required and when.   Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consultant 9

10. K>Knowledge Knowledge In the context of risk management, intelligence includes the capacity for understanding a thing and applying a logic toward considering an event as a risk, while knowledge refers to the values developed through a learning process and ideas generated from past events . Developing a good strategy for managing risk also requires adequate knowledge of the perceived risk. Without the required knowledge of how to manage risk based on external inputs such as technical knowledge, knowledge on financial support or knowledge from recorded case studies, it is difficult to develop a risk management strategy . Knowledge of the market, knowledge of third-party services and knowledge of past data are basic necessities for generating strategies to address any perceived risk. Without knowledge, the risk management process is not possible . Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consultant 10

11. Risk Management Process Steps Steps Purpose Action One (1) Identify the Risk Strong Reasoning( R ) is required to identify and analyze Two(2) Analyze The Risk Do Three(3) Evaluate and Rank the List Intelligence ( I ) is needed for impact analysis and ranking. Four(4) Treat The Risk Strategic ( S ) decisions must be made for treating the risk. Five (5) Monitor & Review the Risk Knowledge ( K ) is needed for managing the risk. Presented By -Dr.Tapas Bhattacharya , Ph.D., CISA(USA) , FCMA & SAP Consultant 11