Risk Analysis is essential for successful business. There are number of key areas that must be covered in risk analysis. One of the most important is to understand threats. We have to identify and protect ourselves against all threats to ensure that our business continues to survive. We are forced by other factors such as money, time, priority and need to apply cost benefit analysis to ensure we are protecting the business functions.
We have to identify all probable threats and prioritize them. Threats can be internal or external, manmade, natural threats, primary or secondary etc. At the time of classifying, it is very important to understand and identify their characteristics and potential controls. Grouping and understanding by business impact is also important for risk analysis.
Identifying all critical process and systems is another fundamental thing of the business continuity plan. After identifying critical business plan and systems and probable threats, the next step should be identify weaknesses and loss potential. This requires a wide scan of the business process to identify weakness and then analysis to understand those weaknesses which would have a greatest impact on your critical process and the company. It clarifies and quantifies potential losses, which helps to establish priorities.
Physical security as well as employee, processes, data, and asset protection are essential controls. Most important control is data security and physical security; others are also required but have less priority. They can be identified through the risk evaluation process.
After identifying the business functions, probable threats, weaknesses and controls, the next step would be to develop an understanding of the probability of threats or impact of the threats. This is called business impact analysis phase which establishes priorities for protection. The aim is to minimize threats, weaknesses, impacts, downtime, protect your employees, protect your data, protect your vital and essential communications, protect your asset, protect your brand and reputation of the organization.
To know the importance of risk analysis, this website has gathered some of the finest books on business management.
