What Is Project Risk Management
There are many requirements of an effective process for project risk management. To make such a process effective, one has to successfully employ all the members of the project team to identify the different risks that are associated with the project. To make the project dynamic one cannot rely on a static plan which is only documented on paper. One needs to manage risk by integrating project planning with implementation and not as a separate process. When calculating risk of a project it is vital to understand what is the attitude of team members or stakeholders' against such risks and how tolerant will they be of such risks. Accordingly one can draft out how to go about managing the impact of every category of risk.
Project Risk Management – First Step Of Identification
In project risk management, the first step is to identify the risks involved. There is a thorough identification that is done in case of project risks after which one can draft out the process of managing them. In many cases, a list of risks is created at the beginning of the project which is not updated until there is a crisis that occurs. Thus, it is important to engage all team members in identifying all possible risks associated with a project.
Project Risk Management – Identification And Categorization Of Risk
In the first step to project risk management, it is not enough to identify all the risks that can be associated with a project. One should also look into organizational factors which might impact a project or business issues. Again, outside reviewers should review the list of risks listed out by team members in order to ensure that no risk has been downplayed by the team. That way an objective assessment of the risks is covered.
Project Risk Management – Understanding Of The Risks
In project risk management it is not enough to identify the risks but also comprehend them completely so that one can build a proper action plan accordingly. One needs to determine the probability of the risks and impact of the same on the cost of the project, its schedule as well as on the satisfaction of clients. Risks that have high probability as well as can have high impact need to be addressed first. The risks of low probability or low impact may be overlooked. That is how one can proceed to draw up an action plan.
Project Risk Management – Developing An Action Plan
As one of the vital steps in project risk management, one needs to develop an action plan after the assessment of the risks is done fully. One will know when one needs to take action or what steps need to be taken as well as who will be the owner of the risk mitigation tasks. The trigger for action should be defined well so that there is no uncertainty and no delay in taking action to mitigate risk. Communication should be done openly to all stakeholders regarding risks and the prevention strategies.