Importance Of Risk Analysis In Management

Risk analysis

In ISO/IEC 27000 [16] they defines risk analysis as the procedure of understanding the nature of risk and identifying the degree of risk. As such, it is clear that the nature of risk is the source and cause. Therefore, from the source and cause, we can go ahead to locate and identify the risks. Distinct risks getting identified in the process of RA need qualitative and quantitative approaches to compare and determine their priorities since not all the risks identified will be considered. Some risks are highly dangerous or urgent, compares to those that are not so urgent. This comparison would result in the preparation of a priority table of distinct risks after analysis, and it would offer bases of information for the next phase

However, risk analysis is the phase in the process of risk assessment where the highest degree of difficulty arises. The expectation that risk ought to be expressed in perceptions renders any measure of risk extensively subjective. However, in spite of the method applied, it ought to satisfy the following desirable properties. First, it should be embraced by the management, the department of information systems, and the community using it [18].

Second, despite the fact that there is no single methodology of risk analysis that can incorporate all the risks, the approach should have an extensive comprehensiveness, and be in a position of handling current technologies. Third, it ought to be sound logically. Fourth, the approach ought to be practical, that is, it should offer optimum cost protection. Fifth, it ought to be open to progressive evaluation from every party. Sixth, it ought to be favorable for learning, engulfed by clear deliberations records and documentation. The approaches of risk analysis can be categorized into three groups: hybrid, qualitative, and quantitative approaches.

Qualitative risk analysis

In [20] Buyukozkan & Ruan used the Choquet integral aggregation approach to assess the important effects and interactions among the risks of software development. They retrieved the risk factors of software development by studying an extensive range of literature, and they examined an array of risks types including development environment risks, product engineering risks, and program constraint-associated risks like the main dimensions of risks. Factors linked to product risks of engineering entail design, requirements, unit and code tests, testing and incorporation, and specialists in engineering. The development environment risks factors entail development system, development process, management methods, management process, and the environment of work. Contact, resource, and program consolidate are the kind of factors that affect the risks of program