Well, in a business sense you can chalk its 60 million year old existence to successful evaluation of risks. The sloth high in a tree branch has an overall view of its landscape below; in business you are always looking for that holistic view of your enterprise. This view allows you to see where trouble lies and opportunities are presented. For the sloth, when you move 13 feet a minute and a Jaguar is hungry for lunch, you bet you want to know where you are going and when the most optimal time to venture out is.
Risk Evaluations can come in many different forms. Four instances are presented below:
1. Purchasing of Redundancy: If a company has all the applications it currently needs to meet its Business Capabilities, why invest more time and money in new applications? Many times, investment in new applications stems from the inability to properly manage an application portfolio. Countless organizations are often unaware of what products they have at their disposal and what these products have the potential to deliver. Thus, the company will venture out to purchase something they may already have.
2. Initiative Investment: When there is an actual need to make new IT investments, it is important to understand what you are investing in. Many times companies will be too far along in a process when they realize they have selected the wrong project to invest in. However, weighing the options through an investment analysis before any actual funding takes place can provide a clearer view into the future; or, by allowing stronger comparisons of potential projects, stakeholders can make more-informed selections. Both options help reduce the risk of a project failing due to lack of knowledge about the venture.
3. Compliance: Both keeping up and not keeping up with regulatory requirements can be very costly for an organization. By identifying which regulations must be followed and in what way, the company has the opportunity to identify the gaps of coverage and resolve those before an incident occurs.
4. Disaster Recovery: Sometimes risk in unavoidable; but it can still be mitigated. By having proper processes in place to recover after a disaster, the company can reduce the level of impact that the damage may cause. It is also imperative to identify the likelihood of risk associated with an application or asset when it does encounter failure. And if the risk does occur, what is the level of impact and what is the turnaround time to fix the issue.
With a complete view of your business landscape, you can identify where the competence of your company lies. Understand where the company’s shortfalls are. Where and when it is important to invest time, money and resources. And when it is time to get comfortable and stay in your tree branch. In today’s world, you don’t need to be the strongest, fastest, or biggest to survive. You just need to be the smartest. Limit the risk with the power of knowledge.