Introduction to Risk and Risk Management
First of all, what is Risk? Risk is an uncertainty that may adversely affect the functioning of an organization or hamper the achievement of objectives. The risk is classified further into different streams that vary with the industry. The most common example is Financial Risk, or say Political Risk, Operational Risk, or Technology Risk.
The risk may be seen as an unwanted but integral part of any business.
While you exist in an environment that is ever-changing and dynamic, you are bound to face uncertainties at some point. Let’s understand with an example, moving from traditional Petrol/ Diesel Vehicles to Electric Vehicles could come as a jolt to the industry even putting competitors out of the market unless they adapt to the ever-changing business dynamics.
Heraclitus, a Greek philosopher, has been quoted as saying “Change is the only constant in life.” The same applies to business philosophy. To grow, you must anticipate and adapt.
To successfully cope with the risks that exist in such a dynamic environment like India’s, we need Risk Management.
Now, let us understand what is Risk Management and Some Important Things you should know about Risk Management Services.
Risk management is an activity to critically evaluate the risks that exist in and around the organization and provide a solution-oriented approach to tackle those unforeseen circumstances. Risk management also examines the relationship between risks and the cascading impact they could have on an organization’s strategic goals.
Some Important Things you should know about Risk Management Services:
- Risk management requires you to follow a dynamic and flexible approach. Risk Management Services are tailored according to the business practices of the organization. You may not expect an elephant to run as fast as an ostrich. Before you dive into the subject of Risk Management, take a dip into the existing practices of an organization and understand its structure, set benchmarks and bring the best practices to the table and ensure effective implementation.
- Risk Management involves a team of qualified professionals and involves a lot of discussions, brainstorming, and forecasting of risks. Assessing and forecasting risks and their potential repercussions allow you to come up with creative solutions and the best possible outcomes. Risk Management may pay handsomely well but requires a problem-solving mindset.
- Risk Management emanates from the Top and follows a top to bottom approach. The commitment of top management is a prerequisite for effective Risk Management to work. Risk Management Companies should take a holistic view of the entire organization instead of working in silos.
- Risk Management should be an integral part of Before clients and investors do business with you, they would want to be sure that they’re not putting themselves at any kind of risk so they are likely to want full assurances. When the success of your business hinges on having a robust risk management strategy it does help focus the mind.
- Risk Management is not about finding fault in our stars but providing value to the business. Moreover, Risk Management is not a one-time activity, but rather an ongoing one. Nonetheless, it takes time, effort, and years of working experience with diverse clients to provide an efficient and effective solution.
In order to ensure a safe future and to convert risks into possibilities, Risk Management has to be brought into the picture in every aspect of the business.
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DPNC Global LLP is a full service consulting firm providing multi-disciplinary services to clients ranging from MNCs, Indian Corporates from across industries to Family Offices and UHNIs, both in and outside India.
Our Risk Advisory Services (RAS) team offers solutions to help organizations and their management to effectively balance risk management, governance and compliance while moving towards their short-term and long-term strategic goals. Our team comprises a group of qualified and experienced professionals with in-depth knowledge and specialization in risk advisory services including for conducting Internal Audits, developing Standard Operating Procedures etc. We leverage our knowledge of industry best practices and domains across organizations of all sizes and sectors to streamline and develop systems, processes & solutions that are tailored to be suitable for our clients. To know more about our services in Risk Advisory Services, visit https://dpncglobal.com/risk-advisory/
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