Illuistration Benefits of Risk Management by Madhukar Angur

Risk Management is the process of identifying, analyzing and responding to risk factors throughout the life of a project and in the best interests of its objectives. Proper risk management implies control of possible future events and is proactive rather than reactive.

The Risk Analysis Process is essentially a quality problem solving process. Quality and assessment tools are used to determine and prioritize risks for assessment and resolution.
The risk analysis process is as follows:

Identify the Risk: This step is brainstorming. Reviewing the lists of possible risk sources as well as the project team’s experiences and knowledge, all potential risks are identified.
Assess the Risk: Traditional problem solving often moves from problem identification to problem solution. However, before trying to determine how best to manage risks, the project team must identify the root causes of the identified risks.
Develop Responses to the Risk: Now the project team is ready to begin the process of assessing possible remedies to manage the risk or possibly, prevent the risk from occurring.
Develop a Contingency Plan or Preventative Measures for the Risk: The project team will convert into tasks, those ideas that were identified to reduce or eliminate risk likelihood.

But the  benefits of Risk   Management :

• Reduce the information asymmetric
• Reduce Taxable Income Volatility
• Reduce probability of debt overhang
• Contingency planning permits controlled and predetermined responses
• Increased confidence in Investment