| Every single endeavor no matter how simple or small | | | | order to have a proper understanding of the risk |
| always has a degree of risk attached to it. Risk | | | | report presented for a project. |
| always has to be quantified in one way or another in | | | | The following example will help define Risk |
| order for the institution to know what exactly they | | | | Measurement apart from Risk Metrics. When a |
| are getting themselves into. It can include several | | | | person wishes to know how much an item weighs, |
| factors like: Monetary costs or Potential Losses, Time | | | | he then weighs the object in order to get a |
| invested, the Movement of the Market as a whole, | | | | corresponding numerical value. The process of |
| as well as a few others. No company or institution | | | | weighing something is the process of measure or |
| should move forward without first analyzing what | | | | measurement. The corresponding unit that is |
| their moves would cost them. | | | | attached to resulting value be it pounds, kilos or tons |
| Knowing the risks associated with a decision is | | | | is referred to the Metric Value. The same goes with |
| important before making something final. Without a | | | | Risk Measurement and Metrics. The process by which |
| study, it would be like walking across a busy street | | | | a risk is measured is referred to as the process of |
| blindfolded. In general, the foreseen results of the | | | | Risk Measurement, while the unit corresponding to |
| endeavor should outweigh the perceived risks, if not, | | | | the resulting value is a Metric. |
| then the company can either choose to go ahead | | | | Customer response is a way by which risk is |
| and hope for a positive outcome or they can choose | | | | measured. The Risk Metrics used to quantify this |
| to cancel the project all together. Once a company | | | | could include positive and negative responses given |
| has the idea of the risks of the projects that they | | | | by a focus group for a certain product. A negative |
| choose to be involved in, measures can then be | | | | result of the Focus Group established to measure |
| taken to improve and protect a company against | | | | Risk and customer response may mean that the |
| these. | | | | product is not ready for the market and needs more |
| In the process of quantifying risk, there are two | | | | time in development. If the results are positive, then |
| categories that generally stand out; they are Risk | | | | it can be taken as a go signal to release the product. |
| Measurement and Risk Metrics. These two things are | | | | Knowledge of how the Risk Report is achieved is |
| often interchangeably confused, which should not be | | | | extremely important when the risk associated with a |
| the case. Risk Measurement and Risk Metrics are two | | | | certain project is great or dubiously small. It is also |
| complete different processes. Risk Measurement is | | | | important to note the process by which the report is |
| the process by which risk is measured and Risk | | | | achieved especially if it hinders the progress of a |
| Metrics is the value attached to the measured Risk. | | | | certain project. |
| These two items have to be fully understood in | | | | |