Risk MitigationStrategiesRisk Mitigation is the effort toreduce the risk impact and lessen the likeliness of it occurring again.
Within Risk Mitigation Strategies are fourtenets that are unique to Disaster Recovery and continuity of business: RiskAcceptance, Risk Avoidance, Risk Limitation, and Risk Transference. A company should choose one that is tailoredto their business needs and profile. This ongoing effort includes front-endplanning risk that are to be mitigated. ARisk Mitigation plan should consist of a number of things: identify the rootcause of risks, select resources specific to risk mitigation, identifyalternatives, assess layers of mitigation alternatives, evaluate risks, andcommunicate results based on findings to all parties. RiskAcceptance. Levelsof risks that on a grand scale are acceptable and on the otherintolerable. This does not reduce itseffects by one instance. Considered acommon option when matched against avoidance or limitations when it clearlyoutweighs the risk itself.
A company mayuse risk acceptance if they are out to save company funds and the likelihood ofrisks occurring again are minimal. A fewexamples of risk acceptance are Investing (low level of risk), Insurance,Derivatives, Projects, and Business Equity. RiskAvoidance. Theelimination of risks by altering the parameters set forth. The risk is alteredso much that the value changes to either a reduced state or somewhat acceptablevalue. Be careful not to avoid one riskand be bombarded by an unknown greater risk.
Risk avoidance is quantitative innature. A quantitative risk assessment willassess the change made is worth the cost differential. Considered the most expensive strategy andunderutilized because no one wants to accept certain risks.RiskLimitation. Most common strategy used amongbusinesses.
This limits exposure to risks by leveraging some sort of action. Itcombines both risk avoidance and acceptance. Companies that have properlyplanned and evaluated for unexpected losses and have taken the steps to reduceits impact. An example would beidentifying alternate locations for a brief that was to be given if theoriginal site was no longer available. Hindering the original location but notthe entire plan for the brief to be given. Risk limitation should be built in stages,tailored to one’s own experiences. Onewould never fail if he/she has multiple avenues to exhaust.
Risk Transference. Shifting risk to a willing third party. There are many companies out there who wouldrather have another company deal with certain operations that is either foreignto them or who is able to take on said risks. This can be payroll services or simplycustomer service for IT needs.
It alsoallows the company to shift more focus on other important things.