Project Risk Management
Every important project does not go exactly to plan. Major events can threaten to derail your project altogether.
Identifying Project Risks
Every project has risks that threaten to cause project failure. Project risk management involves firstly identifying the risks that impact your project. These could be:
- a reliance on new and untried technology
- project funds contingent upon future profits
- inexperienced project team members
- late arrival of specialised equipment
You don't know everything, so it's best to get as many people involved in the risk identification process as possible. The most efficient and effective process for identifying risks is to get your key stakeholders together for a risk identification exercise all at one time. One person's idea will then trigger a thought in someone else. Running this kind of brainstorming session gives you the best chance for capturing all of the most important risks without them coming back to bite you and your project team when you least expect.
Analyzing and Mitigating Risks
Your next task as Project Manager is to analyze the risks. Risk analysis can take many forms. However, it usually revolves around providing answers to three key questions:
What is the probability of the risk event occurring?
What would be the impact on the project if the risk event were to occur?
What steps can be taken to minimize the impact of the risk event if it did happen?
Answering the third question provides your risk mitigation strategy for each risk. You then need to decide for each risk who will implement the strategy and by when.
Don't forget to review risks continuously throughout your project. Previously identified risks may disappear and new ones emerge. Don't be caught off guard! We recommend you maintain a Risk Register to keep your project team updated on current risk status.
For a practical introduction to managing project risks, check out our down to earth guide packed with customizable project templates. Whether you are new to project management or have some experience, you will find plenty of valuable tips for making your next project a success.
Our simple to use project management software tool features an automated Risk Register that will help you identify, analyze, rank, mitigate, update and communicate project risks to your project team. Download the trial version today.