What is Project Risk Management?
Risk is something that can never be avoided in a business. While projects are undergoing for the businesses and organisation, we can never say or tell that the project is planned out perfectly and nothing can go wrong. Anything can go wrong when the outcome is being achieved, there is no such thing as perfection because planning and execution are greatly related but totally different aspects. What we plan while making a project charter always leaves some space for risk because some things might not go according to as planned, so it needs to be fixed before it does a damage that cannot be comprehended.
For this specific task, project risk management does its wonders. Project managers are there to ensure that the risks that the project faces are kept minimal in order to avoid disappointment.
If we divide it further, risks are divided into two parts:
l Positive Risk Impact
l Negative Risk Impact
Risk Management basically comprises of four major steps mentioned as follows:
l Risk Identification
l Risk Quantification
l Risk Response
l Risk Monitoring and Control
Risks can be operational or business related and then handled by the relative teams. They can be supplier risk, resource risk and budget risk. It is very difficult for managers to comprehend the upcoming risks but it is an inevitable and unavoidable job as-well. The strategies to solve these risks could be structures or unstructured and brainstorming and experience is needed to deal with such matters and it is important to be kept in check that only project managers or the stakeholders of the project are ought to be handling these risks. Risks can be of many types for example if the supplier is not meeting the time-line to provide the raw supply to complete the project or human resource needed for the project is not available and the available ones are not skilled enough for the said job or if the costs are exceeding the given budget from the finance department. We always need to identify first what we are dealing with then move on to the next step.
A process called by the name Matrix is used to evaluate the risk based on quantity. Through this process, the project managers can know numerically that what are the odds of a risk most likely to happen.
This is a matrix and through this the impact of a factor and the probability of happening of a risk can be comprehended.
Strategies are chosen in order to keep the risk minimal. Following are some strategies lined up as risk response:
l Risks can be avoided
l Pass on the risk
l Take corrective measures to reduce the impact of risks
l Acknowledge the risk
Risk Monitoring and Control:
They are monitored at each step to check how is it going and if any change is being made, it is observed and identified by the project managers to eliminate or make the risk minimal.
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