What is risk classification in SAP GRC-RM - GRC Risk Management?

SAP Term: risk classification

• Component: GRC-RM

• Component Name: GRC Risk Management

• Description: A classification system used to organize and categorize risks that an organization could encounter. Risks are classified by risk category.

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• Key Concepts: 
  Risk classification is a process used in SAP GRC Risk Management (GRC-RM) to categorize risks according to their severity and potential impact. It helps organizations prioritize risks and determine the appropriate response. Risk classification is based on a combination of factors, including the likelihood of occurrence, the potential impact, and the organization’s risk appetite. 
  
  How to use it: 
  Risk classification is used to identify and prioritize risks. It helps organizations determine which risks should be addressed first and which can be managed with existing resources. The process begins by assessing the likelihood of occurrence and potential impact of each risk. This information is then used to assign a risk category, such as high, medium, or low. 
  
  Tips & Tricks: 
  When classifying risks, it is important to consider the organization’s risk appetite. This will help ensure that risks are classified accurately and that resources are allocated appropriately. Additionally, it is important to review and update risk classifications regularly to ensure that they remain accurate and up-to-date. 
  
  Related Information: 
  Risk classification is an important part of an organization’s overall risk management strategy. It can be used in conjunction with other risk management tools, such as risk assessment and risk mitigation, to ensure that risks are managed effectively. Additionally, it can be used to inform decision-making processes and ensure that resources are allocated appropriately.