Companies spend a considerable amount of money in Risk Management. But most often the Impact and Priority are decided based on gut feel, experience and management discretion. Mainly due to the lack of time, in-depth financial impact analysis of risks, are sometimes ignored. This paper will talk about the importance of analyzing the financial loss associated with the risk. It will introduce a concept called the Loss Factor and how it can change the priority of a risk. Doing a good financial loss analysis is important as it will allow the management to assign priorities quantitatively and help avoid taking mitigative action on risks which are not truly risks. This paper also briefly touches upon Risk Management Principle, differences between Issues, Risks and Cascading Risks. All contents in this paper are written taking only negative risks into consideration

Subhashis Basak is a Product Program Manager at Sun Microsystems Inc. He has more than 12 years of experience in the Software Industry. He is certified in Project Management (Prince2 – Projects in Controlled Environment version 2) and a certified Six Sigma Green Belt. Subhashis has done his bachelors in Mathematics from Presidency College, Calcutta and a post graduation in Applied Computer Science from CMC Ltd.