Risk Analysis
Risk analysis is a pivotal process for identifying and managing potential risks that could impact an organization adversely. The process brings together several key components, such as probability, likelihood, exposure factor, and impact, each playing a crucial role in giving a picture of the overall risk landscape. There are different types of risk analysis that focus on different modes of looking at risk, qualitative or quantitative, serving different purposes in the risk management strategy. To allow quantitative analysis, there are methods of quantifying different aspects of risk in order to help businesses make informed decisions. These concepts are discussed here:
- Qualitative risk analysis: Qualitative risk analysis uses subjective judgment to categorize risks as high, medium, or low, focusing on the potential impact, such as the likelihood of occurrence. One of the aspects of qualitative risk analysis is a risk matrix/heat map, which shows the severity...