8.- SELECTING THE RIGHT TOOL FOR RISK ANALYSIS.
It is important that the organization defines the risk analysis and management process before selecting a tool. Ultimately, the tool must support the process. Below are criteria to consider when selecting a risk analysis and management tool:
Methods for assessment of risk may differ between industries and whether it pertains to general strategic decisions or operational, project management, customer, market or product risk assessment. Judgment and values enter into risk assessment in the context of what techniques one should use to objectively describe and evaluate risk. Techniques should be selected based on fit with current management practices, the availability of resources and the type of output required.
- Aligned to risk analysis objectives: does the tool support the analysis that the organization is trying to accomplish?.
- Supports decision making: does the tool provide the necessary information to support decision making?.
- Accessibility: is the tool accessible to all risk committee members?. Can the tool be located / hosted where all necessary personnel can access it?.
- Availability of data: is data available for the tool's analysis?.
- Level of detail: is the tool detailed enough to support decision making?.
Methods for assessment of risk may differ between industries and whether it pertains to general strategic decisions or operational, project management, customer, market or product risk assessment. Judgment and values enter into risk assessment in the context of what techniques one should use to objectively describe and evaluate risk. Techniques should be selected based on fit with current management practices, the availability of resources and the type of output required.
”The golden rule is to select the easiest and the most practical tool that can do the job”.