Benefits of Risk Management for Small to Medium-Sized Companies and Projects
Risk management is a crucial tool for companies and projects to address potential issues before they occur. This article will explore the importance of risk management, particularly for Small to Medium-sized companies and projects (SMs). It will also discuss how SMs can implement risk management using End-To-End Risk Management and TRM Advantage-Risk Management Software.
Small and Medium-sized company benefit from risk management
Importance of Risk Management
Risk management is an organized and structured approach to identifying and examining potential issues from the perspective of likelihood and consequence. Companies use risk management to identify actions that minimize the chance of an issue occurring and reduce its impact if it does occur. Larger companies rely on risk management to analyze and focus on the most significant risks. They also use it to develop a corporate culture where staff considers the likelihood and consequence of issues when working.
Risk management is critical for SMs. SMs use risk management to increase profits, improve financial stability, and avoid major EHS, quality, and reputational issues. Anything that delays delivery or increases the cost of business or a project is a risk, as is a risk to output quality, the environment, or the health and safety of workers. ISO 9001 and various other management and contract frameworks require risk management as a standard practice.
Implementing End-To-End Risk Management
End-To-End Risk Management is an easy and efficient method for SMs to implement risk management. It involves looking to the past and identifying past issues; then looking forward and predicting other possible issues. For instance, if there were issues with suppliers in the past, a quick risk forecasting meeting could identify upcoming potential issues with suppliers and mitigate them. This type of risk review meeting should occur before reaching out to suppliers for bids and before selecting a supplier.
In a project, identifying issues that have come up in similar projects is the first step. The pre-bidding phase is often subject to a risk assessment to avoid under or over-bidding based on possible risks. Supplier and sub-contractor selection is another activity where risk management can prevent problems and reduce their impact.
SMs assess key operational risks throughout the organization/project using four perspectives: Health, Safety, and Environment (HSE); Cost; Quality; and Corporate Liability. Since a risk can impact more than one area, some overlap occurs. For example, a safety risk may also have a corporate liability component. Using risk management, steps are identified and taken to reduce the likelihood of it occurring and reduce its impact in each of the affected areas.
TRM Advantage-Risk Management Software
Keeping track of information, plans, and progress related to each different risk is the biggest challenge facing SMs. Larger companies typically have dedicated personnel supported by specialized software or spreadsheets that manage risks. TRM Advantage is specialized software that helps SMs obtain the same benefits from risk management at a fraction of the cost. It operates on desktops, and laptops, and is fully mobile-friendly, making it accessible anywhere there is cellular phone service.
In conclusion, SMs can generate real bottom-line benefits by implementing risk management. It is a powerful tool that helps organizations to identify and minimize potential risks. Implementing risk management is easy and can save companies from unnecessary spending. Using TRM Advantage to support your organization can help your risk management program become a success.
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