Risk treatment is a process, where you need to identify the risks and try to resolve them for your business. Risks are of a different type, some require immediate solution, while some are treated later. Before finding out the solution, you need to figure out the following things:
● Method of treatment
● People responsible for the treatment
● Costs involved
● Benefits of treatment
● Likelihood of success
● Ways to measure and assess treatments.
After finding out the risk, now you need to find the proper solution and check your risk management plan accordingly.
Following are the different options for treating risk:
1) Avoid the risk
When you found out that there is a risk in doing this activity, try to find some alternative to proceed further and avoid the risk. With this approach, you can conquer the risks and make your business safe.
2) Reduce the risk
You can reduce the risk, by incorporating the proper quality control processes, keeping an eye on debtors, auditing, complaining about legislation, giving training to workers, proper scrutiny, and the list goes on.
3) Transfer the risk
Outsourcing risk is the best way to keep your business safe and secure. Outsourcing can be done in many ways, such as -
● Insurance
● Outsourcing
● Joint ventures
● Partnerships
4) Accept the risk
You have to accept a risk if it is hard to transfer or avoid. By accepting the risk you need to make a strong plan and manage it. You need to keep an eye on risk that you accepted to make its consequences minimal.
Following is the approach you need for the treatment of risk:
1) Develop a Risk Treatment Plan
Determine the risk level and accordingly develop a plan to resolve it. The risk that rated low or very low, just needs improvements, while the high rated risk needs a proper plan to resolve. For all the risks identified in the Risk Assessment, you need to follow this:
1) Specify the treatment options agreed - avoid, reduce, share/transfer or accept.
2) Documents to be made - Right the proper approach that we need to concur with the risk. All other risks should also be highlighted in these documents.
3) Who will be the owner - Who will be responsible for the risk treatment plan monitoring and assessment? The risk owner is ultimately responsible for every single thing that happens.
4) Specify a deadline - You need to prepare the risk treatment plan for any specified risk in the given allotted time frame. For example - if the risk is rated high and it is said to have a treatment plan in 2 years then you should prepare it accordingly.
I hope the above-listed risk treatment and development plan will help you to bring the expected results. A risk owner is ultimately responsible for the whole process and outcomes. Follow proper measurement to concur risk with minimal damage. You can also maintain, risk register to get a better understanding of risk management or take out the best services of risk management companies.