Concept Of Risk Management In ITIL And Its Practices: A Brief Overview
Organizations face several problems, issues, and challenges in their daily routine business. These challenges never came in a specific field or at a specific time, but organizations could face these challenges in any field and at any time. This factor makes it difficult for organizations to tackle these challenges. It could be easier than that if organizations have an effective risk configuration and risk management.
Risk management is necessary for an organization to tackle the daily routine challenges, risks and issues. Now, the question is, what is risk management, and how could we make it effective? To answer this question, in this article, we have discussed the main concept of risk management, its best practices and ITIL. We hope it could be really helpful for you. So, let’s start with our main topic.
What Is Risk Management?
Risk management, as shown by its name, is related to managing the challenges and risks an organization faces in its daily operation. According to Linda Tucci, “Risk management is the process of identifying, assessing and controlling threats to an organization’s capital and earnings. These risks stem from a variety of sources, including financial uncertainties, legal liabilities, technology issues, strategic management errors, accidents and natural disasters.“ ISO 31000 defines risk management as “Coordinated activities to direct and control an organization with regard to risk.“
According to the definitions given above, risk management is a predetermined method for identifying, containing, and averting threats to organizations. It is crucial for an organization to develop an effective risk management mechanism. These threats and harms could be disastrous if they are not managed properly.
Risk Management In ITIL
ITIL offers a comprehensive and in-depth mechanism for managing an organization’s various processes, as we have mentioned in previous articles. Then how could it be possible that ITIL forgets such an important process of risk management? It provides a complete mechanism to formulate an effective risk management practice. The main objectives of the ITIL risk management process are to identify risks, assess them using a risk matrix, and then control them. It might involve examining the company’s assets, figuring out how to protect them from dangers, keeping track of danger indicators, and figuring out how exposed the company is to dangers. A risk matrix is a group of categories that show the likelihood that a risk will materialize.
ITILv4 Risk Management Best Practices
Risk management has long been recommended as one of the ITIL ITSM best practices. It didn’t begin to stand alone as a practice until ITIL version 4. Instead of reading about risk management among the various ITIL processes and practices in bits and pieces, think of it as having all the information you need in one place. According to AXELOS, Risk Management ITIL 4 Practice Guide (2020),
“The purpose of the risk management practice is to ensure that the organization understands and effectively handles risks. Managing risk is essential to ensuring the ongoing sustainability of an organization and co-creating value for its customers. Risk management is an integral part of all organizational activities and therefore central to the organization’s service value system (SVS).”
In ITILv4, risk management has been discussed so detail as it has never been discussed before. It is beneficial for organizations because it is really helpful for organizations to manage the risks and threats they face in their daily routine through a detailed process. The following are the important aspects of this detailed mechanism of risk management.
Types Of Risk Management In ITILv4
There are two different types of risk management in ITIL. Following are these types of risk management provided by ITIL.
Negative Risks (Threats)
Your risk profile is managed so that by lowering, eradicating, or otherwise lessening your threats, you can benefit from or improve your opportunities. ITIL 4 emphasizes more than just IT service delivery, and IT’s role in co-creating business value is overlooked by many organizations, even though they focus primarily on threats defence.
Positive Risks (Opportunities)
In light of this, I argue that in ITIL 4 risk management, identifying and taking advantage of opportunities as they present themselves is just as important as foreseeing and taking advantage of threats as they manifest.
