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The benefits of risk management can be felt across all industries. Risk management is a process that needs to be applied if the risks have to be mitigated and contained, if not fully eliminated. The benefits of risk management in all industries came into greater focus following the financial debacle of 2008.
Firstly, why does an organization need to implement risk management strategies? Simple: Risks can offset the potential benefits and convert them into drawbacks. The benefits of risk management in all industries always outweigh the drawbacks of non-implementation of risk management strategies. In addition to helping the upper management get a better idea of the state of affairs of the company, benefits of risk management in all industries also help to reduce the financial burden for the organization and to meet regulatory requirements.
It needs to be understood that risk management is a set of processes that need to be implemented extremely stringently and diligently at every possible stage. Risk management is a journey, not a destination. For the benefits of risk management in all industries to be felt thoroughly, it is important to understand that it is intuitive.
Each industry has its unique risksRisk management is not a standard set of processes or exercises that can be applied into every industry. For example, the benefits of risk management in the finance sector could be different from those of the manufacturing industry. Likewise, the benefits of risk management in all industries in the life sciences sector could be way different from the risk management that is implemented in say, human resources.
Yet, even though the dynamics of risk management are different across all industries and are unique to each of them; the benefits of risk management in all industries are there to be felt and experienced.
Look out for the sleeping monstersEven though risk management is implemented in accordance with its own set principles or standards; there is still a possibly that some risk that was not obvious at an earlier stage could spring an unpleasant surprise later. This makes the benefits of risk management in all industries all the more worthy of consideration.
The ability to see beyond the obviousA few factors could become manifest in clear ways, but it is the obscure and latent ones that need greater attention. It is not always possible for even the most farsighted business risk manager to sometimes grasp the dormant risks that could crop up out of nowhere and pose a threat to the business. Developing this ability helps to realize the full benefits of risk management in all industries, because this is a quality of risk management that is common across all industries.
In order to realize the benefits of risk management in all industries fully, risk managers need to be on their guard all the time. This is obvious and goes without saying, but in the light of the fact that some risks can become enormous and uncontrollable at later stages, it is best for risk managers to understand ways of deriving the benefits of risk management in all industries.