What Are the Different Types of Risks Associated with Business Operation?

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What Are the Different Types of Risks Associated with Business Operation?

Businesses face different types of product risks while executing their operation. It has been seen that a few businesses do not accurately understand what this risk is. That makes it a tough concept for so many individuals included in testing. It is important to understand what product risks are and how are they dealt by a business in their testing project.

Types of risks

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Product risk assessment is available in different types of guises that makes it very critical for the businesses to analyze. During management of a project, there are basically three types of risks that should be considered.

  • Business risk
  • Project risk
  • Product risk

Business Risks

Business risks linked to a project are the concern of senior management. They analyze the impact of the risks on the organization if projects suffer from any form of disaster. Loss of self-assurance in the firm or business resulting from an unsuccessful service or product, contributes to a dwindling market share. A smaller base of customers results in a reduced price of share and loss of profit or turnover.

Project Risks

Project risk is the type of risk that most of the project managers are acquainted with. They are very much comfortable in describing and mitigating the risk.  Project risks include going over-budget, missing deadlines or key milestones, issues related to availability of resources, lack of assistance from higher management, scope-creep, etc.

Product risks

Product risk includes all those things that can lead to failed service, software or whatever the project produces.  Just like quantification of business risks and project risks, product risks also need to be classified and measured. Product risk is common and not always alleviated by proper testing.

Product risks are classified into two key categories, non-functional and functional. Functional risks imply how the product fails to achieve the tasks that it is designed to perform. Some of them being performing calculations, receiving data, interfacing with different systems and producing reports.

Non-functional form of product risks is related to issues like not being able to perform right calculation quickly or being non-stable with concurrent users. Whatever domain does a product belong to it will have a few risks in common. Some of the risks are distinctive to that specific domain or less likely to happen.

Business risks and project risks are mitigated in various ways such as planning in advance, assuring availability of back-up resource, having an impressive control and monitoring processes in place, and ensuring that staff is properly trained for the role.

These are a few types of risk mitigation options. Project risks as well as business risks are quantified and categorized with respect to the likeliness that it will create some impact (maybe a financial value).

Conclusion

It is important for a business to take out some extra time in discussing with business representatives and concerned subject matter experts. This will help in determination of what all things can fail with the product. Also, it will identify the impact prior to the production of conditions, scripts and test ideas.

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