What is Risk Mitigation? Definition, Types, and Tools Explained

A business that doesn't plan for risk and take measures to mitigate it is a business living on borrowed time. Risk mitigation is an ... ProjectManagementDataScience&BusinessAnalyticsAI&MachineLearningProjectManagementCyberSecurityCloudComputingDevOpsBusinessandLeadershipQualityManagementSoftwareDevelopmentAgileandScrumITServiceandArchitectureDigitalMarketingBigDataCareerFast-trackEnterpriseOtherSegmentsArticlesEbooksVideoTutorialsFreePracticeTestsHomeResourcesProjectManagementWhatisRiskMitigation?Definition,Types,TopStrategies,andToolsExplainedTrendingnowPMPCertificationCostandPriceBreakupExplained:ACertificationGuideForBeginnersArticle5AdvantagesofPMPoverMBAArticleFreeMind-map:PMPCertificationEbookRitaMulcahy'sPMP®PrepandPMBOK®GuideArticleTop37ProjectManagerInterviewQuestionsandAnswersArticleWhatisProjectManagement?VideoTutorialFeasibilityStudyAndItsImportanceinProjectManagementArticleProjectScopeManagementandWhyIt'sImportant?ArticlePMP®VsPRINCE2®VsCAPM®:WhichOne'sRightforMeArticlePRINCE2Vs.PMP:ChoosingTheBestCertificationArticleWhatisRiskMitigation?Definition,Types,TopStrategies,andToolsExplainedBySimplilearnLastupdatedonNov23,2021630TableofContentsViewMore Abusinessthatdoesn’tplanforriskandtakemeasurestomitigateitisabusinesslivingonborrowedtime.Riskmitigationisanessentialbusinesspracticeofdevelopingplansandtakingactionstoreducethreatstoanorganization.  Thethreatstoabusinessoperationarenumerous.ArecentexampleisaransomwareattackthatshutdownColonialPipeline’sfueldistributionsystem.Naturaleventssuchashurricanes,wildfires,andtornadoescandisrupt,shutdownordamageacompany.Manyorganizationshaveplansinplacetoaddressaviolentattackintheworkplace.AndtheCOVID-19pandemicisagoldenexampleofahealthriskthatimpactedalmosteveryindustryontheglobe. Someriskscan’tbeavoided.Therefore,companiesneedtohaveariskmitigationplantoconfrontvariousthreats,repairthedamage,andrestoreoperations.So,whatisriskmitigation,whatisthegoalofriskmitigation,andwhatareriskmitigationexamples?  PostGraduateProgramInProjectManagementTheCompleteProjectManagementProgramExploreCourse What’sinaRiskMitigationPlan? Theessentialcomponentsofaneffectiveriskmitigationstrategyareidentifyinglikelyrisks,prioritizingriskpreparationandresponses,andmonitoringandupdatingtheriskmitigationplan.  Identifypossibleriskevents–Anorganizationshouldconsidernaturalthreatsbasedontheirlocationandpotentialriskstodata,operations,andpersonnel.  Makeariskassessment–Evaluatethepotentialoftherisksidentified.Ariskassessmentincludeswhatmeasures,controls,andprocessesareneededtoreducetheeffectofathreatcomingtofruition.  Prioritizerisks–Rankrisksbytheirseverityandpotentialimpactontheoperation.Rankingrisksalsohelpanorganizationdeterminethenumberofresourcestodevotetoaddressingeachpotentialthreat. Trackrisks–Monitorrisksastheyevolveandevaluatetheriskmitigationplan’sabilitytoaddressthem. Implementactionsandassessprogress–Continuallyevaluatetheriskmitigationplan’sabilitytoaddressevolvingrisksandrevisetheplanaccordingly.  WhatIsRiskMitigation:TypesofRiskMitigationStrategies Justastherearevarioustypesofrisk,differentcompanieshavedifferenttolerancesandapproachestodealingwiththreatstotheirbusiness.Herearesomehandlingoptionsforriskmanagement: Riskavoidance–Anorganizationavoidsinvestmentsoroperationsinareaswithtoosignificantariskorcost.  Riskacceptance–Operatingwithanunderstandingthatsomeriskwilloccurinoneareasotheorganizationcanprioritizemitigatingorprofitinginotherareas.   Risktransfer–Theprocessofallocatingaportionofrisktoathirdparty.Aninsurancepolicyisoneexample.  Riskmonitoring–Watchingforchangesinrisksandtheirpotentialimpactonanorganization.  FREEIntroductiontoProjectManagementCourseMasterprojectmanagementbasicsinonegoEnrolNow WhatIsRiskMitigation:RiskMitigationBestPractices Inadditiontotheriskhandlingoptionslistedabove,herearesomebestpracticesforriskmitigation: 1.Determiningmitigationplans–Decision-makersaregenerallyinchargeofacceptingandavoidingrisk.Butbecauseidentifyingandaddressingrisksisanorganization-wideendeavor,ariskmitigationstrategyshouldbeamissiondecision.Also,leadersneedtorecognizethatrisksrecur,andplanstoaddressthemneedtobeready.  2.Mitigationplancontent–Selectariskmanagerwiththeresources,knowledge,andauthoritytoimplementtheriskmitigationplan.Theplanshouldanswer:    Whatactionsarerequired?   Whenmusttheseactionsbeaccomplished?   Whoisresponsiblefortakingaction?   Whatresourcesareneeded?    Howwilltheactionreducetherisk’sprobabilityorseverity? 3.Developacontingencyplan–Highrisksmaynecessitatehavingacontingencyplanonhandiftheinitialactionsfailtoprovideadequatemitigation.Also,includeatriggerortimelineforimplementingacontingencyplan.Oneexamplewouldbehavingtoevacuateoperationsandsetupinanotherlocation.  4.Evaluatethestatusofeachaction–Determinewheneachstepneedstobeimplementedandcompleted.  5.Monitoringrisk–It’sincumbentonanorganizationtotrackevolvingthreatsandamendstrategiesandactionsasnecessary.Inaddition,continuallyreassesstheorganization’sriskexposure.  Lookingforwardtoenhancingyourprojectmanagementskills?Takeour projectmanagementcertification coursetodayandtakeyourprojectmanagementcareertonewheights. WhatIsRiskMitigation:RiskMitigationTraining Theabilitytostrategicallyguideanorganizationthroughtroubledwatersisasupremetestofabusinessleader’smettle.GainingmanagementtrainingtocreateandimplementariskmitigationplanisacrucialcomponentofSimplilearn’sPostGraduatePrograminProjectManagement,developedwiththeUniversityofMassachusettsAmherst.Thisprojectmanagementprogramcoverstheessentialelementsofbusinessstrategyandmanagement.  FindourPostGraduatePrograminProjectManagementOnlineBootcampintopcities:NameDatePlacePostGraduatePrograminProjectManagementCohortstartson14thApr2022,WeekendbatchYourCityViewDetailsPostGraduatePrograminProjectManagementCohortstartson28thApr2022,WeekendbatchSingaporeViewDetailsPostGraduatePrograminProjectManagementCohortstartson9thMay2022,WeekendbatchYourCityViewDetailsAbouttheAuthorSimplilearnSimplilearnisoneoftheworld’sleadingprovidersofonlinetrainingforDigitalMarketing,CloudComputing,ProjectManagement,DataScience,IT,SoftwareDevelopment,andmanyotheremergingtechnologies.ViewMoreRecommendedProgramsPostGraduatePrograminProjectManagement1278LearnersLifetimeAccess*PMP®Plus25142LearnersLifetimeAccess*PMP®CertificationTraining84723Learners*Lifetimeaccesstohigh-quality,self-pacede-learningcontent.ExploreCategoryFindPostGraduatePrograminProjectManagementinthesecitiesPostGraduatePrograminProjectManagement,SingaporeNextArticleIntroducingSimplilearn’sProjectManagementPostGraduateProgramwithUMassAmherstByNikitaDuggal515Jun11,2021RecommendedResourcesAnIntroductiontoProjectManagement:ABeginner’sGuideEbookIntroducingthePostGraduatePrograminLeanSixSigmaArticleWhatisAgileProjectManagement?VideoTutorialProjectManagementInterviewGuideEbookIntroducingthePostGraduatePrograminCyberSecurityArticleWhatisProjectManagement?VideoTutorialprevNext DisclaimerPMP,PMI,PMBOK,CAPM,PgMP,PfMP,ACP,PBA,RMP,SP,andOPM3areregisteredmarksoftheProjectManagementInstitute,Inc.