Businesses face risk as a normal part of their everyday operations. Business environments are always changing and evolving and there are new challenges and threats each and every day. That is why the whole concept of risk management came about, and why it has blossomed into such an integral part of a company's operating procedure. Market volatility means every business must be on its toes and be able to anticipate what's around the next corner before they actually get there.
In its simplest terms, risk management refers to a system of managing business risk so it will have the smallest negative impact possible. It involves identifying potential issues, measuring how frequent and severe they will be, looking at different alternatives and deciding which of those alternatives would make a better choice. After a new system has been chosen it is implemented and the results are monitored.
One of the newer terms in the game of business risk is â€˜risk intelligence.' This term has been defined differently by different people, but one definition that many follow is â€˜the capacity to learn about risk from experience.' That definition was coined by American business writer David Apgar. Most definitions deal with uncertainty and the ability to estimate probabilities as they pertain to business risk. Assessing probability is something that scientists do on regular basis and have been doing for as long as there has been science. Applying those principles and concepts to business risk is what risk intelligence is all about.
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With risk management and risk intelligence expanding and becoming more and more important, many companies will also be devoting more resources to this critical subject. With volatility expected to continue, those that aren't prepared may end up being left behind. With social media such a dominant force in the modern world, risk intelligence might be more important than ever.
Risk intelligence and risk management aren't things that you start up after something bad has happened. They are proactive activities, and if you are fully engaged now, it will be too late. Continuous risk monitoring is a key, and jumping into the world of risk intelligence is one way to make it happen. Everyone form the CEO on down must be aware of the potential threats, and then do their parts to make a difference.
Cassandra Miller understands the importance that risk intelligence brings to a business. That is why she trusts the professionals at R2 Financial Technologies. To learn more, visit their website today.