operational risk
The concepts of Operational Risk have deep roots in the financial industry as well as the military. Operational Risk and Operational Risk Management are defined below.
Operational Risk Defined
The possibility of suffering mission or business loss.
Operational Risk Management Defined
An operational practice with processes, methods, and tools for managing risks to successful mission and business outcomes. It provides a disciplined environment for proactive decision making to:
continually assess what could go wrong
determine which risks are most important to deal with, and
implement strategies to address risk
With these general yet comprehensive definitions, organizations may explore operational risks beyond those related to financial risk as practiced in the banking industry and safety hazards as explored in military contexts. Any risk to the successful accomplishment of mission or business outcomes may be identified and addressed using a structured operational risk taxonomy[1].
Technical Risk
Technical Risk is a narrower aspect of operational risk and is concerned with the identification and mitigation of risk when developing or maintaining technology. Risks are generally associated with the product being built and include feasibility of building the product and the associated technical processes such as engineering plans and methodologies, requirements, design, implementation, testing, transition to operations, and support.
Programmatic Risk
Programmatic Risk is also a narrower aspect of operational risk and is concerned with the identification and mitigation of risks associated with the execution of a program. A program can be the management of a development activity, a service delivery activity, or any activity the organization takes on to improve performance or operations.
Risk services
Risk Identification Workshops – facilitated sessions designed to elicit and prioritize risk statements from participants. Used for Operational, Technical, and Programmatic risk identification.
Risk Mitigation Planning Workshops – facilitated sessions designed to develop action plans to mitigate an organization’s most critical risks. Used for Operational, Technical, and Programmatic risk mitigation.
Risk Management Training – Training on the principles of risk management designed to help individuals and teams who manage risk within their organizations or are ready to establish a risk management program. (2 days)
[1] Gallagher, B.P., Using operational risk to increase systems engineering effectiveness. 2016, Colorado State University.