Incorporating Innovation in Performing Risk Assessment

Risk assessment is not a new thing in business planning and operation. Assessing risks is an old science, which requires the top management of a business to identify the risks that a company will face during the operation. Effective business management calls for managers of a corporation to foresee beforehand the problems and risks, which the business may encounter that will threaten business continuity. The fact that risk assessment is not a new thing does not mean that innovation is not applicable when performing the assessment. The truth is that incorporating innovations are more important today than before because of the various risks that a business faces in its daily operation. Risk assessment today needs to be comprehensive and extensive since there are risks that a business is exposed today, which are not in existence before. Goodwill Innovations in risk assessment require creativity in identifying the risks of the business. Previously, risks that a business focus are the privacy and security of the assets of the business. However, the modern way of business added other risks, which includes information risks, operational risks and reputation risks. For example, a company possesses intangible assets called goodwill. rnGoodwill is the reputation that is retained by a business in the minds of consumers. Goodwill also assures that the business will continue to exist in a profitable manner. Innovations in risk assessment must include disaster recovery planning or planning, which takes into consideration an event where the reputation or goodwill of the business is threatened by a situation. The plan will consider all possible aspects of the disaster and the appropriate remedies for each aspect or situation of the disaster towards the goal of ensuring business continuity. Competition Risk assessment is very important today since businesses are always engaged in stiff competitions with other organizations. Innovations in risk assessment must consider the risks brought about by competitors and the competition. A risk assessment that fails to study the risks of competition may doom a business even from the start. A risk assessment requires business continuity planning to study all the possible scenarios of the risks of a competition that will threaten the business. The plan may include product innovation, effective management practice and cost-efficient operations. Information Security The introduction of internet in business operations introduces a new risk that was not there before. Innovations in risk assessment must consider all the possible risks that the information of a business is exposed on the internet. Likewise, the assessment must provide ways to protect the data and to recover the information in case the risk actually happened. Addressing the risk of the virtual world is a serious aspect of risk assessment that some companies even hire data control specialists dedicated on protecting business data. The bottom line of any risk assessment is to assure business continuity in the event that the risk actually took place. A business continuity manager plays the role of assessing the risk that took place and implementing the business solutions that was identified during the risk assessment stage of business planning.