NTIFICATION AND EVALUATION etl) had » Define the term risk identification » Discuss the objectives of risk identification » Explain the risk identification process » Describe tools and techniques of risk identification 2 MINTRODUCTION ment. It refers to and so on. The Risk nity Peeper provides the foundation for risk manage! iprnant types Ee ucne events e.g. fire, flood, burglary etwlecturing of information relating to organisation, market, environment, ems and nee financial strengths and weaknesses, management ess mechanism is need for risk identification in a business bh= 13.2 Risk Identification ang organisation. An organization may suffer a heavy loss in a identify the risk at this stage. 3.2 DEFINITION OF RISK IDENTIFICATION “Risk identification is the process of determining risks that cou prevent the programme, enterprise or investment from achieving its 3.3 BACKGROUND Re ere a’ Risk identification is the crucial step of risk management process, , Assess 1 Probability & Se 2. Risk Impact ‘Assessment consequences 1. Risk Identity Risks Identification Reassess existing Risk risk events & Identity Tracking new risk events 4. Risk Mitigation 3. Risk Priortisation Planning, Implementation | Sears conse and Progress Monitoring Risk Mitigation { 3.4 OBJECTIVE OF RISK IDENTIFICATION The prime objective of risk identification is the early and continuous identification of events that, if they occur , will have negative impact on the ability of project to achieve performance or capability outcome goals, ‘They may come from within the project or from external sources. Risk identification requires to match the type of assessment needed to assist risk informed decision making. For an acquisition programme, the first step is to identify the programme goals and objectives. It provides context and bounds the scope by which risks are identified and assessed. i i 1. To identify and prioritise potential risk events, 2. Helps to develop risk management strategies and risk management plans. 3. To use established risk management methods, tools and techn assist.and Evaluation the analysis and reporting of identified risk events. at help in f fo find ways to identify and evaluate risks. " po develop strategies and plans for lasting management strategies. 6. IDENTIFICATION PROCESS ple sources of risk are there. The project team should review the Iti} + Beme poapes cost estimates, schedule, technical maturity, key ee ance parameters, performance challenges, expectations of stakeholders, Feely, ability to handle threats for risk identification. 9 pes ieter - jdentification is an iterative process. More information will be gained ine project as the programme progresses. The risk statement will be Biesed fo reflect the current understanding . be identified as the project progress through the life cycle. New risks can © Estimate likelihood and impact of risks Quantitative Vs qualitative '¢ Identification of Risks and their causes Risk Risk Analysis/ Identification ‘Assessment Monitoring and Review nae Treatment @ Actions and Mechanisms to minimise risks ‘¢ Risk acceptance * Continuous monitoring of risks and action to Control them : S8TOOLs AND TECHNIQUES OF RISK IDENTIFICATION : K cay §M* &f Questionnaire and Checklists. Risk manager tries to find out of loss the firm may suffer if the property destroyed on the basis ofaaa Risk Identification and 13.4 ecklists. Questionnaires are prepared to point out questionnaires and chi z major and minor loss exposures. ee ce policy checklists are pr, Policy Checklis' Insurans a Klist mde ie eee other publishers specialised in insurance 4AtbY insur: f a ay publications. These involve catalogues of different policies and prog, a insurance available to meet the needs of business organisation, The isp manager may consult such list to avail the insurance policy. 3. Financial Statement Method. Analysis of financial statements hele identify the valuable assets that must be protected. Information relating to riey may be produced through detailed study of each asset and liability, 4. On-site Inspection method. Major loss exposures can be identifieg giving regular visits on the industrial site. Risk manager has to inspect Fequired safety arrangement are made at the work pace to provide safety ang security to workers. 5. Flow Charts Method. A flowchart is pictorial representation o manufacturing and delivery. A flowchart shows the manufacturing bo and discover all the possibilities that could interrupt manufacturin, where a loss have severe financial results for the business organisatio: f flow of ttlenecks '& Process mn. 6. Interaction with Others. Regular meetings with line managers and supervisors can be arranged for risk manager to discuss the major sources of loss that may arise. An upto date knowledge of industrial trends and market changes keep the risk manager to new loss exposures and cause concern, 7. Statistical Records of Losses. Risk manager can use the historical and departmental loss data over time to identify major loss exposures. He can estimate the future losses on the basis of detailed r ecords of losses incurred, loss reimbursed by insurance, loss frequency, causes of loss and other types of information. 8. Organisational Charts. Organisation chart helps to study the nature and extent of activities of the firm. It explains the inter-relationship and inter dependencies between various parts of the business organization. The knowledge about the people with the authority to participate in making the implementing risk handling techniques. Risk Evaluation : - It is the process to estimate both the frequency and severity of potential losses. The risk manager gets information that is helpful in deciding the relative significance of identified risks and choosing specific techniques to manage the risks. The risk manager can use probability distributions and _ statistical techniques in estimating both loss frequency and severity. iwith their plants in today’s process industry environment. Mé methods of varying degrees of complexity and cost exist.