Risk Management: Infomation Technology's New Loss Mitigation Power Tool.

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Industry defines Risk Management as the process of identification, analysis and either acceptance or mitigation of uncertainty in IT investment decision-making. Essentially, risk management occurs anytime an organization analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given their strategic objectives and risk tolerance. Inadequate risk management can result in severe consequences for companies as well as the individuals in the market place.

 

Return on Investment or ROI is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio:

 

 

 

 

A proprietary formula is used to determine the value of implementing IT solutions across the organization. This provides a two-fold benefit: 1.) Ensures that the project cost does not exceed the expected value add to the organization, 2.) Provides long-term analysis used in planning the strategic direction of the organization.