Risk mitigation

Risk Mitigation is a systematic process used in project management, business management, and other fields to identify, assess, and prioritize risks associated with an undertaking, followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities.

Definition

Risk mitigation, also known as risk reduction, is the process of prioritizing, evaluating, and implementing actions to reduce risk to project objectives. Risk mitigation efforts may focus on reducing the likelihood of the event, reducing the impact of the event, or both.

Risk Mitigation Strategies

There are four types of risk mitigation strategies that hold unique to both Business Continuity and Disaster Recovery. These include risk acceptance, risk avoidance, risk limitation, and risk transference.

Risk Acceptance

Risk acceptance does not reduce any effects however it is still considered a strategy. This strategy is a common option when the cost of other risk mitigation tactics such as avoidance or limitation may outweigh the cost of the risk itself.

Risk Avoidance

Risk avoidance is the action that avoids any exposure to the risk whatsoever. It’s important to note that it may not always be possible to completely avoid all risks.

Risk Limitation

Risk limitation is the most common risk management strategy used by businesses. This strategy limits a company’s exposure by taking some action. It is a strategy employing a bit of risk acceptance along with a bit of risk avoidance.

Risk Transference

Risk transference is the involvement of handing risk off to a willing third party. For example, numerous companies outsource certain operations such as customer service, payroll services, etc. This is done to save the company time and money.

Risk Mitigation Planning

Risk mitigation planning is the process of developing options and actions to enhance opportunities and reduce threats to project objectives. It includes risk mitigation implementation, risk mitigation plan reassessment, risk mitigation plan updates, and risk mitigation reporting.

See Also

• Risk Management
• Risk Assessment
• Risk Analysis
• Risk Management Plan