Strategies for Risk Management in ITIL® 4 Environments

In an IT service management (ITSM) context, dealing with risk is a crucial aspect of co-creating value. Several types of risk might occur throughout the supply of services and products, including operational, legal, and financial risks.

Government and regulatory authorities may assess organizational risk management policies and procedures in addition to minimizing difficulties in service and product delivery. Risk management and control in an ITSM system is not just good business, but it may also be a legal responsibility.

ITIL 4’s Risk Management Methods

Risk management is classified as a General Management Practice in the ITIL 4 framework. It has a dual purpose: it ensures that the organization:

1. Which is aware of its risk profile.
2. Has a good understanding of how to manage its risks.

Two Types of Risk

It’s critical to recognize the two categories of risks:

You manage your risk profile to maximize opportunities while minimizing, reducing, or eliminating risks. Many firms focus just on responding to risks, forgetting that ITIL 4 is also about IT co-creating business value, not simply IT service delivery.

With that in mind, I would argue that realizing opportunities is just as essential as planning for and responding to genuine risks in ITIL 4 risk management.

Sub-practices of Critical Risk Management

There are four sub-practices in the ITIL 4 Risk Management practice.

Risk Management Support

Your risk management process is defined by the risk management assistance in providing. This is where you answer the fundamental questions about how you deal with risk, such as:

• How do you recognize both positive and negative risks?
• What amount of risk is a company willing to accept?
• Who is in charge of the various Risk Management responsibilities?

This sub-practice, once again, specifies the framework within which you will deal with risk, not how individual risks will be handled.

Business Impact & Risk Analysis

This sub-practice calculates the financial effect of risks that are realized. It also aids in calculating the possibility or probability of a danger becoming realized.

It’s critical to establish both the likelihood of a risk occurring and the significance of each risk. Simple phrases like low, medium and high likelihood can be used to categorize probabilities. Calculating the likelihood of each risk occurring allows you to prioritize which threats require response plans and the sequence in which they should be constructed.

The Risk Register, also known as the Risk Log, is the major output of the Business Impact and Risk Analysis sub-practice, which is similar to Project Management Institute (PMI) recommendations. The Risk Register contains a list of identified risks as well as the solutions that will be implemented after the risk has been realized.

Assessment of Required Risk Mitigation

You will determine two crucial elements in this sub-practice:

• The risk response tactics (or countermeasures) are used to respond to a threat.
• For each risk, there is a Risk Owner.

The Risk Owner is in charge of determining any countermeasures that may be necessary as well as their continuous maintenance.

Risk Monitoring

When a risk is identified, this is where you’ll take action and track the progress of risk countermeasures that have been deployed. Ascertaining that the risk response is appropriate for the risk impact and, if necessary, altering or modifying the response.

If the realized risk effect is larger or smaller than predicted, monitoring may require modifying prevention efforts. You’ll also need to keep track of or report on how well the intended countermeasure is working to mitigate the danger. Risk management may need revisiting the other three sub-practices by:

• Changing your risk management strategy
• Processes for assessing business implications and risk analysis are being revisited.
• Re-evaluate your risk mitigation techniques.

Risk Management & other ITIL methods

In an isolation chamber, risk management does not take place. It’s not a one-step procedure.

Risk management is a never-ending procedure. It should be examined or re-evaluated anytime there is a change in the ITIL 4 Service Value system, especially when there are changes in opportunity or demand, the Service Value Chain, or other sub-practices under the General Management, Service Management, and Technology Management practices. When a new risk is discovered during an incident management event, risk management sub-practices should be addressed.

Risk management approaches can and should be applied for all ITSM parts, not just IT service delivery because ITIL 4 is a comprehensive framework that focuses on co-creating business value—not just IT services.

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