Organizations face several problems, issues, and challenges in their daily routine business. These challenges never came in a specific field or at a specific time, but organizations could face these challenges in any field and at any time. This factor makes it difficult for organizations to tackle these challenges. It could be easier than that if organizations have an effective risk configuration and risk management.
Risk management is necessary for an organization to tackle the daily routine challenges, risks and issues. Now, the question is, what is risk management, and how could we make it effective? To answer this question, in this article, we have discussed the main concept of risk management, its best practices and ITIL. We hope it could be really helpful for you. So, let’s start with our main topic.
Risk management, as shown by its name, is related to managing the challenges and risks an organization faces in its daily operation. According to Linda Tucci, “Risk management is the process of identifying, assessing and controlling threats to an organization’s capital and earnings. These risks stem from a variety of sources, including financial uncertainties, legal liabilities, technology issues, strategic management errors, accidents and natural disasters.“ ISO 31000 defines risk management as “Coordinated activities to direct and control an organization with regard to risk.“
According to the definitions given above, risk management is a predetermined method for identifying, containing, and averting threats to organizations. It is crucial for an organization to develop an effective risk management mechanism. These threats and harms could be disastrous if they are not managed properly.
ITIL offers a comprehensive and in-depth mechanism for managing an organization’s various processes, as we have mentioned in previous articles. Then how could it be possible that ITIL forgets such an important process of risk management? It provides a complete mechanism to formulate an effective risk management practice. The main objectives of the ITIL risk management process are to identify risks, assess them using a risk matrix, and then control them. It might involve examining the company’s assets, figuring out how to protect them from dangers, keeping track of danger indicators, and figuring out how exposed the company is to dangers. A risk matrix is a group of categories that show the likelihood that a risk will materialize.
Risk management has long been recommended as one of the ITIL ITSM best practices. It didn’t begin to stand alone as a practice until ITIL version 4. Instead of reading about risk management among the various ITIL processes and practices in bits and pieces, think of it as having all the information you need in one place. According to AXELOS, Risk Management ITIL 4 Practice Guide (2020),
“The purpose of the risk management practice is to ensure that the organization understands and effectively handles risks. Managing risk is essential to ensuring the ongoing sustainability of an organization and co-creating value for its customers. Risk management is an integral part of all organizational activities and therefore central to the organization’s service value system (SVS).”
In ITILv4, risk management has been discussed so detail as it has never been discussed before. It is beneficial for organizations because it is really helpful for organizations to manage the risks and threats they face in their daily routine through a detailed process. The following are the important aspects of this detailed mechanism of risk management.
Concept Of Risk Management In ITIL And Its Practices: A Brief Overview
Organizations face several problems, issues, and challenges in their daily routine business. These challenges never came in a specific field or at a specific time, but organizations could face these challenges in any field and at any time. This factor makes it difficult for organizations to tackle these challenges. It could be easier than that if organizations have an effective risk configuration and risk management.
Risk management is necessary for an organization to tackle the daily routine challenges, risks and issues. Now, the question is, what is risk management, and how could we make it effective? To answer this question, in this article, we have discussed the main concept of risk management, its best practices and ITIL. We hope it could be really helpful for you. So, let’s start with our main topic.
Risk management, as shown by its name, is related to managing the challenges and risks an organization faces in its daily operation. According to Linda Tucci, “Risk management is the process of identifying, assessing and controlling threats to an organization’s capital and earnings. These risks stem from a variety of sources, including financial uncertainties, legal liabilities, technology issues, strategic management errors, accidents and natural disasters.“ ISO 31000 defines risk management as “Coordinated activities to direct and control an organization with regard to risk.“
According to the definitions given above, risk management is a predetermined method for identifying, containing, and averting threats to organizations. It is crucial for an organization to develop an effective risk management mechanism. These threats and harms could be disastrous if they are not managed properly.
ITIL offers a comprehensive and in-depth mechanism for managing an organization’s various processes, as we have mentioned in previous articles. Then how could it be possible that ITIL forgets such an important process of risk management? It provides a complete mechanism to formulate an effective risk management practice. The main objectives of the ITIL risk management process are to identify risks, assess them using a risk matrix, and then control them. It might involve examining the company’s assets, figuring out how to protect them from dangers, keeping track of danger indicators, and figuring out how exposed the company is to dangers. A risk matrix is a group of categories that show the likelihood that a risk will materialize.
Risk management has long been recommended as one of the ITIL ITSM best practices. It didn’t begin to stand alone as a practice until ITIL version 4. Instead of reading about risk management among the various ITIL processes and practices in bits and pieces, think of it as having all the information you need in one place. According to AXELOS, Risk Management ITIL 4 Practice Guide (2020),
“The purpose of the risk management practice is to ensure that the organization understands and effectively handles risks. Managing risk is essential to ensuring the ongoing sustainability of an organization and co-creating value for its customers. Risk management is an integral part of all organizational activities and therefore central to the organization’s service value system (SVS).”
In ITILv4, risk management has been discussed so detail as it has never been discussed before. It is beneficial for organizations because it is really helpful for organizations to manage the risks and threats they face in their daily routine through a detailed process. The following are the important aspects of this detailed mechanism of risk management.
There are two different types of risk management in ITIL. Following are these types of risk management provided by ITIL.
Your risk profile is managed so that by lowering, eradicating, or otherwise lessening your threats, you can benefit from or improve your opportunities. ITIL 4 emphasizes more than just IT service delivery, and IT’s role in co-creating business value is overlooked by many organizations, even though they focus primarily on threats defence.
In light of this, I argue that in ITIL 4 risk management, identifying and taking advantage of opportunities as they present themselves is just as important as foreseeing and taking advantage of threats as they manifest.
Risk management support provides an overview of the responsibilities of those involved in ITIL risk management. This sub-process explains how to identify risks, how much risk an organization is willing to accept, and what IT staff members have responsibilities.
The impact of risk on the organization is measured through business impact and risk analysis, which also establishes the likelihood and vulnerability of the risk happening.
A risk owner is assigned to each identified risk after an assessment of the necessary risk mitigation has determined the risk mitigation measures needed.
The effectiveness of already-implemented risk mitigation and countermeasures is continuously monitored by risk monitoring. It also entails making the appropriate corrections when necessary.
The scope of risk management and the fact that many of the management practices outlined in ITIL 4 require it are briefly mentioned in the Risk Management ITIL 4 Practice Guide. The following are a few instances of these claims:
The reason for this is that risk management includes both positive and negative risks.
It is due to the risk associated with incident causes.
It supports risk management for information security elements like accessibility, privacy, and integrity.
It acts as though it is a control being used to manage different risks.
The management of project risks by organizations is beneficial.
It has to do with potential threats to service levels.
We have discussed the concept of risk management in ITIL. For better understanding, we have also discussed what is meant by the term risk management. In fact, we have also discussed its basic concept and also discussed its concept in ITIL. Moreover, we have also discussed the ITILv4 risk management best practices. From the above discussion, we learned that ITILv4 provided such a detailed mechanism for risk management that it became too easy for organizations to manage the threats and opportunities they face in their daily routine business. So, we recommend using ITIL-provided methodology for risk management.
