Analysis of Risk ManagementInformation technology(IT) Industry Of United Kingdom

This paper is an analysis of the Interview conducted on Senior Managerial staff of the IT Industry of United Kingdom. The Interview was scheduled with some of the most promising IT leaders of the country and their consent and effort to answer honestly was appreciated. A set of nine questions were asked from the interviewees and their answers were recorded. The sessions were conducted both individually and in groups to avoid information bias of any sort. The answers were then arranged and analyzed and put into this format for the readers conveniencePlease note that the names of the Companies and their employees are strictly protected by Our Code of Confidentiality.

Interview Analysis

The following questions were asked in the same order. Each question below is followed by a detailed analysis of the interviewees answers. A total of nine questions were asked from a group of Ten Respondents, all of who are positioned as Senior Managers in their respective Companies.

Question : 1Do you follow risk management procedures at your organization?Answer : 1The respondent answered that Risk Management Procedures and their compliance is an important part of the Ethical Framework of their organization. They believe that risk management is the core of each and every technical institute as no organization can construct any new objectives and hope to achieve them without gathering firm knowledge about the risks facing their company and ways of cutting through them. The respondent further went on to say that an entire department was specifically devoted in the recent years to undertake the task of identifying each and every risk and potential threats to the organization and making sure that contingency plans were developed in response to them.The respondent told that many seminars informing the employees and managerial staff about the importance of risk awareness are conducted throughout the year with the intention to combat extreme and anticipatory risks of all kinds.

Question : 2What are the benefits of having risk management procedures at your organization?Answer : 2The respondent believes that risk is a part of everyday life, something thats unprecedented and unapproachable. Risk management minimizes the probability of a project failing whether it is performance related, financial or scheduled. Some, not all of the projects sustained by the IT industry are either not submitted on time or not completed at all. There is a generalized attitude in the organizational environment that risks are healthy and a part of the business. However, risks do reduce the sustainability of the organization and makes it more vulnerable to the entire corporate world. Organizations that prioritize risk management will see the rapturous benefits of it in many areas. First and foremost, the implantation of proper and working Risk management procedures and techniques will have a growing effect on the strategic planning of the business. This happens in the way that top level managers, when discussing new strategic moves and techniques for the business will now consider many factors that can and will affect the business in either the future or the near present. They will then decide the kind of effect the factor will have, either its a positive effect or a negative one. These factors study not just the risk the business is going to face but also the opportunities and threats these factors are likely to pose for the business. Analyses and study of these trends then help the business plan its strategic moves in a very coherent and responsible fashion.Secondly, the respondent believes that risk management procedures makes more of an effective use of the resources of the organization. To understand this, the respondent says, one needs to understand that every organization or business has only a limited amount of resources, which if not allocated properly, can have the severe effects of breaking down an organization. Proper use of the limited resources is a must. Risk management procedures in the IT industry have helped shaped the way resources of a company are used. Once the senior managers have an inkling about all the risks involved in the business and how these risk factors can be taken care of both on financial and procedural terms, then resources will not be misplaced or under or over used. A proper guide to effectively use the resources of a business , making sure that they are distributed evenly and appropriately in the adequate departments is what a fully functioning risk management system provides us with.Apart from this, delivering the projects on time and ensuring that there are no breakdowns of any sort is a huge additional advantage of having a carefully installed risk management procedure system in your organization. According to the respondent, once a firm is aware of the potential risks it faces in the long and short run, it automatically involves itself in providing secure financial backup to the projects which in turn ensures the completion of projects on a timely basis. Also since there is regular backup, along with a close monitoring of the probable risks to the organization, the project managers can plan ahead of any problem or risk occurrence. The respondent also believes that risk management procedures create a more risk focused culture for the organization. This is because maintaining a proper functioning risk management department provides a basis for constant risk discussions throughout the organization, involving all employees, at all levels, to become a part of the risk inflammatory policies of the organizations. This allows for better and more thoughtful insights and healthier decision making keeping risk as the focus at the all levels.Risk management procedures also are an effective way of enhancing the cost efficiency of the organization as all financial data is thoroughly assessed and analyzed routinely and contingency strategies are created which facilitate improved decision making capabilities within the executive and director levels, and in other layers of management.

Question : 3Do risk management procedures add value to the organization?Answer : 3According to the respondent, adding value to any organization is one of the key elements of risk management procedures. There is no better way to facilitate your organization in terms of strategic and financial compliance than through risk management. What most people fail to understand about the Risk management theory is that its not just about successfully and carefully avoiding those critical risks that can overthrow the welfare of the business but risk management is also concerned with making sure that organizations take the necessary risks that are crucial to the success of the organization. Risk is generally associated with an alarming factor that can destroy the functioning of the organization, lead to losses or handicap the organization strategically so that the name of the business remains nothing but a farce amongst the corporate world in the years to come. However, risk is perfectly fine at a considerable level and the management of the organization needs to decide what this level must be in order to gain advantage of opportunities that come wrapped in the form of risks. The respondent said that value addition is the accommodation of those benefits into the business which are a honest reflection of the image of an organization. Risk management procedures add value to the business in two ways. First and foremost, they are known to create shareholder value. Secondly, value is generated by competitive advantage. It is assumed that unless a great many strategies, actions and techniques are not made a basic part of the whole corporate plan of the organization, the main purpose of risk management wont be achieved. It must be remembered that the success of the risk management procedures is directly proportional to the success of the organization. The risk management procedures create value not only at the micro level but also at the macro level of corporate governance. Value for shareholders is created In the essence that risk management procedures wish to incorporate this into every employees brain that decisions must be prioritized on their basis of adding value to the business which can also be called corporate value.Shareholders value is basically the concept that companies will provide more to the shareholders in returns than they initially invested in the company. If this happens then positive shareholders value is created. If the returns are less compared to the investment, then value is not generated. Instead negative value is instilled In the organization. The generation of value, is at the centre of the organization.

Question : 4What are the important factors that affect risk management procedures at your organization?Answer : 4The respondent replied that indeed there are many factors that affect the risk management procedures at their organization. These are as follows :1. Risk perception and risk culture The respondent claimed that for any firm to be successful and remain in competition with major firms, it is important for it to have the right working environment and culture. There isnt enough importance that can be placed over this issue. A working environment where everyone is objective and aiming to learn something new every day is a must for risk management procedures to work efficiently and effectively. But whats more important is a culture that is aware of all the risks that the organization faces everyday and more importantly perceives these risks in the right manner and the way they ought to be perceived. On the whole, the culture of an organization varies greatly from each department to each employee. Just as no two employees will have the same views or opinions about each and every issue. Similarly, no two departments will have the same thought over anything. Differences in understanding the risks associated with an organization is also because the reasoning and logical power of different departmental employees is different. People at the top of the management are there for a reason, because their cognitive skills are much better than employees at lower levels of management. Therefore, managers at the top level will always be thinking out of the box and beyond the wall. While lower level managers will have mostly physical and communication skills. With this difference in skills and knowledge, many times lower level managers and employees believe that risk taking and risk handling is meant for the top management and isnt their responsibility. This is a huge reason for the fact that many organizations only act on the risks when they feel knew deep in shallow waters. In other words, only when the danger of the risk is too imminent. However, the way it should be is that the whole organization should be made aware of all the risks associated with all working sectors of the organizations. If we have a risk that we know of, the whole management works towards resolving it. However , there is no department in many organizations that is solely dedicated to educating its employees about all forms of risks that could endanger the firm. This is one of the main factors that affect the risk management procedure that affects the organization.2. Risk Technology

Technology plays a vital role in almost all spheres of life. In organizations, it provides a lot of help not only with employees work but also can play an important part in determining the risks associated with the organization. Technology is an asset for the organizations as it creates a basis for recognizing the risks and handling them. However, according to the respondent, there are not many software present at the moment in the IT industry which help to forecast the risks instead of just relaying basic data. Organizations are looking for software that will not only be able to record huge amounts of data but also compute and analyze any risk lurking on the horizon. According to the respondent, these programs will be specifically tailored to meet the needs of employees and senior managerial staff.

3. Risk Monitoring and ControllingRisk monitoring and controlling is yet another factor that affects the Risk management procedures of our organizations . Risk monitoring is the hunt for new risks through constant monitoring of data, reviewing old risks and keeping track of areas that are readily affected by risks. The respondent says that our organizations are well quipped with instruments required to monitor the risks we might face, but these instruments dont determine the quality of the risks. By quality we mean how dangerous this threat or risk really is. There is no particular scale to define this. And unless that can be determined, we waste precious time over sorting each kind of risk whether it is direct threat to the business or not. This whole process uses up a lot of time which makes the employees bored, feeling useless and totally worthless and the time wasted over sorting out each and every other threat of data could certainly be used more productively.

Question : 5What are weaknesses in the risk management procedures at your organization?

Answer : 5

The respondent answered that risk management procedures at organizations was facing many loopholes at the present time. Firstly, there is no proper tracking software developed yet that can analyze the risks affiliated with an organization. It is too difficult to keep track of all the data, both past and present, and even more difficult to make assumptions based on intuition. A proper system of controlling and interpreting the data and its quality to analyze which data could pose a threat to the system will be a great improvement. Determining the quality of risk prone data is also very important because the quality crises could lead to huge amounts of time being uselessly wasted when there is no way to sort the data and employees have to undergo each and every data log. A device should thus be made available which not only interprets and analyzes data but also uses motion sensors to analyze the quality of the data to determine which form of risk the data would constitute.Secondly, the respondent said that creating a culture that supports risk awareness is essential to the success of any organization. Employees must be given hands on training from senior professionals about risk taking, risk handling, risk analyzing and acquiring potential risks from the data available. A culture that is rich in employee risk awareness and where each and every employee is working towards solving the problems of the business should be made.Thirdly, the respondent said that risk management will only work so far as to aid the management in decision making. It will not make the decisions for the organization. This needs to be remembered. Managers cannot hope that they can feed the software and programs with risk inflicted data and they will get a set of decisions or options to choose from. Practically, this is impossible. No one software or computer logistics program has been designed yet that can actually make the decisions for you. So this limitation of risk management procedure must be kept In mind while you are installing them in your organization.

Question : 6What is the role of top management in risk management in your organization?Answer : 6The respondent said that top management plays a vital role in risk management procedures at organizations. Risk management serves as a framework for the competitive edge of an organization. Top level managers here should follow a liberal and friendly approach in order to create the kind of culture that is required of inducing risk awareness amongst the employees of all levels and making certain that all of them understand the complications associated with and of analyzing and computing risks and imminent threats and opportunities to the organization.Top managers must also posses the kind of skills required to assess the risks that are within the vicinity of the organization. These are particularly cognitive skills and communication skills. Cognitive skills are those which help an individual see beyond the wall. This doesnt mean itll literally give you superhuman powers. What it means is that it will give you sufficient amount of functioning knowledge so that you can judge what might happen due to a certain trend or a particular factor. For instance, if the economic situation is going diverse, is it going to be better to keep our non monetary assets with us or would it be better to sell them off? These kinds o questions can only be answered by a person who has enough experience and knowledge to deal with such situations. Top managers must also be able to differentiate between different types of risk and see how one of them affects the other. There are opportunity risks, speculative risks, threats, risks of losses etc. When a manager distinguishes between these risks, he must then be able to see the domino effect of these with others. They also have the duty to address the risk map whenever they can. The risk map is basically a tool that is used to find out alternatives of the traditional risk managing techniques. The basic point is, anything that feels out of the ordinary can pose a threat to the organization and it is the duty of the top management to procure proper decisions either in favor of the risk or against it.An organization uses risk management to anticipate the probability of a negative impact and therefore risk management requires the support of the top level management at all costs.

Question : 7What is the role of communication and culture in risk management in your organization?Answer : 7The respondent answered that most organizations now have faith in the saying that communication does matter a lot. Employees from different levels have varied opinions on this and they base their conclusions on these very opinions. Sometimes, employees at the lower level might be satisfied with just receiving orders from the top as that means they have to put little or no effort into using their own brains. However, many times employees might strive to become part of the communication process. Internal communication of a business I extremely important when trying to understand, analyze, mitigate and resolve the risks associated with an organization. If there is no proper channel of internal communication, then sending the message across will be very difficult task indeed.Thus proper Communication is a very important tool when dealing with risks. Managers must be effective in their communication skills and must be able to pass on or convey all the important duties and obligations and the expectations that they have from the lower level employees. Communication plays a very important role in deciding what opportunities must be used and when and how to achieve what the organization hopes to achieve. The respond also claims that IT Industry is an industry which is prone to quick changes and businesses that dont adapt to these changes might be left out of the race. Thus for employees to keep up with a changing environment and culture, it is important for them to have communication channels open for them.Culture also plays a very vital role in making sure that risk management procedures are working effectively and efficiently. Culture is basically the set of beliefs, attitudes, ideas and feelings that are the reason for how a person acts. Culture is the backdrop of a persons behavior. Culture differs from country to country and also from organization to organization. An organizational culture is very important in aesthetic point of view. The identity of an organization is determined by its culture. Culture of an organization should be such that it collaborates with the risks taken by the organization. IT must be parallel to the changes and the reasons for those changes. Risk would cause strategies to change undoubtedly and culture should be flexible enough that it can bend easily to the manifestations of the management.

Question : 8What is the role of organization structure in risk management in your organization?Answer : 8The respondent said that organization structure basically consists of all the internal workings, the communication processes and employee relationships with each other. Structure is formed of all the hierarchy of an organization and the spans of control and communication channels within the organization. An organization structure determines who answers to whom and who is directly working under whom. The structure of an organization is constructed in such a way that it directly coincides with the duties and responsibilities of employees. When a risk management system exists in the organization, the structure of the organization needs constant change and improvement. It needs to be reviewed and changes need to be adapted to. This is essential as without it, the employees cannot coordinate and work In a team and without that the risks will not be eliminated.

Question : 9What is the role of trust in risk management in your organization?Answer : 9Trust , without a doubt, is important for the efficient working of every organization. Trust always has two sides to it, that of the trustee and that of the trustor. According to the respondent, trust is vital in IT organizations because without trust team work and team compliance is a mere dream. The goals of an organization cannot be achieved without there being trust between all the individuals of an organization.When using risk management procedures, trust is essential to make sure that orders are carried out in time, without delay, as even a minutes delay could lead to the organization being affected diversely. The top management must have trust in the lower level employees that their orders will be carried out with effect. In the same way, the lower level employees must be sure that whatever the top management is deciding is beneficial for the organization as well as them on individual basis. Also, it must always be remembered that trust and communication goes hand in hand.