High-Risk Product Assessment

There are many types of risks that organizations are currently facing including cyber security breaches, supply chain disruptions, and failing to comply with regulations. As the stakes are increasing, it is important to identify and manage these risks effectively. 

Organizations that do not properly assess and identify their risks are swimming blindly in turbulent waters. On the other hand, organizations that have a robust risk assessment process in place are in a much better position to mitigate potential risks and take advantage of opportunities and achieve sustainable growth. 

Risk Assessment identifies hazards that may cause a negative impact on business operations, evaluating the possibility of that hazard occurring, and how that hazard may impact the organization.  
 

Types of Risk Assessment 

Some of the most prevalent types of risk assessments employed by organizations include: 

Qualitative Risk Assessment 

Subjective judgment is used in qualitative risk assessments to estimate the likelihood and impact of potential risk sources. A typical approach to conducting a qualitative risk assessment is to create a descriptive rating scale. 

The benefits of conducting qualitative risk assessments are quick execution and ease of use. Qualitative risk assessments work well where no hard numerical data exists or where obtaining data would be impossible.  

Quantitative Risk Assessment 

Quantitative risk assessments rely on a number of data and statistical techniques. Quantitative assessments use numeric indicators, such as probabilistic distributions as examples, along with the cost of risk to give a relatively precise description of the risk. 

Quantitative risk assessments are most useful in situations where there is an abundance of confirmed verifiable data and providing a detailed analysis of the data is important. Quantitative risk assessments allow firms to base their decisions off sound data that can be displayed through simulations and models, estimating the impact of each risk.  

Generic Risk Assessment

Generic risk assessments are a general way of looking at all the risks that exist in different types of situations. Generic risk assessments are usually performed when there isn’t enough information available about the particular risk environment to perform a direct, specific assessment, but there is enough information available to identify some of the common hazards and then develop and apply broad, generalized methods for reducing the likelihood of those hazards resulting in an incident.   

Threat-Based Assessment

Threat-based assessments are designed to specifically identify and evaluate any potential threat to an organization. Threat-based assessments have become increasingly important in the areas of cybersecurity, homeland security, and any area where the potential for a specific individual or group of individuals to create a significant threat to the organization exists.  
 
Organizations that focus their risk assessment process on identifying the source of potential threats to them will be in a better position to develop and implement risk mitigation and risk neutralization strategies than organizations that do not focus on the identification of potential sources of threats to them. 

Dynamic Risk Assessment

Dynamic risk assessments are an ongoing, real-time assessment of risks that can and will change as new information regarding those risks becomes available. Unlike static risk assessments, which are performed on an annual or bi-annual basis, dynamic risk assessments are continuously updated and maintained as new information regarding the risks become available.