Risk Tracking
Risk Tracking is a vital component of any risk management process. It involves monitoring multiple risks over time, and regularly documenting the results of actions taken to mitigate those risks. The purpose of risk tracking is to allow managers to identify and respond to changing risk levels, either as individuals or as a whole organisation.
In order to effectively track risks, it is necessary to establish a comprehensive system for collecting, recording and analysing risk data. This system should be tailored to the needs of the organisation, and should comply with the relevant risk management standards. As such, a well-designed risk tracking system should include the following components:
1. Risk Identification – This component identifies the potential risks associated with a project or activity, and documents their potential severity. This identification process typically includes assessing the likelihood of the risk and determining the impact of its occurrence.
2. Risk Monitoring – Once the risks have been identified, it is then necessary to develop a system for monitoring them over time. This involves regularly collecting data related to the risks, and documenting any changes in the risk or the actions taken to mitigate them.
3. Risk Response – After identifying and monitoring the risks, it is necessary to develop a response strategy. This may involve taking specific actions to reduce the risk, or even stopping the project or activity altogether. As part of this process, it is also important to regularly evaluate the effectiveness of the risk response and document the results.
4. Risk Reporting – Finally, risk tracking systems should include a structured method for reporting the results of the risk monitoring process. This typically involves compiling detailed reports that summarise the risk data, the response plan and the overall success of the risk management process.
By effectively implementing the risk tracking process, organisations can have greater confidence in their risk management outcomes, and better manage the cost of their risk management efforts. Furthermore, by tracking the performance of their risk management process, organisations can effectively identify any areas that need improvement.
However, risk tracking is not a one-time process. It is an ongoing process that requires regular maintenance and updating. As such, it is important that organisations dedicate resources to maintaining their risk tracking system, and review the system periodically to ensure that it is up-to-date and accurate.
