Risk Management is here to stay – Part 1
It’s not a FAD, but a FORCE to be reckoned with! Risk Management is here to stay! Are you READY?
Risk is definitely not a FAD, and definitively not a topic going away. Just like other topics that have become more and more visible over the years, such as data analytics, and business architecture to name a few, you definitely cannot sleep on risk. If you really think about it, almost every process that is executed has some level of risk associated it. The hope is, there are controls in place to mitigate the risk.
As members on the project team who work to develop solutions to solve business problems, we are often so focused on finding the right solution, we may not think holistically on what risks a particular solution may pose to the organization. Furthermore, is that risk a risk the business is willing to accept, or prefer some other action or discussion to occur.
I remember when I first started working on projects as a project manager, developer, and/or business analyst, the main risk discussed was the “triple constraint”. The triple constraint is a focus on scope, time and budget in regards to the project as a whole. There is a focus on not allowing scope creep, missing deadlines, and going over-budget. However, risk is more than that. There are many different types of risks to consider as solutions are considered, or chosen, to meet business needs. Such as operational risk (risk associated with the company’s operations), reputational risk (a negative event that may threaten an organization’s reputation), credit risk (risk of default on a debt), financial risk (risk of losing money), and compliance/regulatory risk (risk of non-compliance with laws/policies that could result in fines or legal actions) to name a few. When building solutions these items need to be considered.
For example, let’s say you build a mobile app solution which allows individuals to quickly access all of their different email accounts in one place. The mobile app provides a phenomenal customer experience as customers rave about how it’s so much easier to log into one interface than into multiple. You have multiple customers downloading the application and loving the experience. Then, 30 days later the customer is informed that in order to keep using all the functionality the application offers they have to pay a monthly subscription. Now, when the customer originally downloaded the app, this particular information was not disclosed. Customers thought the app was free with no strings attached. Customer were not aware there was a 30-day trial period unlocking all the features, and after 30 days some of the functionality would no longer work, unless they paid for the subscription. Here is where the risk comes in. Due to this experience, you may have imposed reputational risk, financial risk, and potential compliance/regulatory risk as examples, to the organization. Customers are now upset after the 30 days and the organization is receiving bad reviews, and you are losing potential revenue because you didn’t disclose upfront all of the terms of using the mobile app. The focus was getting a product out the door to beat the competitors to market, or to stand out. It stood out alright! Just not in a good way.
In the next part of this blog, Paula Bell will show you three methods to uncover risks.
Biography: Paula Bell is a Certified Business Analyst, Master Life Coach, Certified Diversity & Inclusion Manager Coach and Career Development Coach, with over 20 years of experience working in corporate America in varied project roles and industries. In addition, for the last 20 years Paula has been successful in running a consulting business that focuses on mind, body, soul. She has a passion to inspire, motivate and encourage others holistically. To find out more about Paula you can visit her website at www.paulaabell.com.