The Risk Management Process in Project Management

What is Risk Management on Projects?

Project risk management is the process of identifying, analyzing and then responding to any risk that arises over the life cycle of a project to help the project remain on track and meet its goal. Risk management isn’t reactive only; it should be part of the planning process to figure out risk that might happen in the project and how to control that risk if it in fact occurs.

A risk is anything that could potentially impact your project’s timeline, performance or budget. Risks are potentialities, and in a project management context, if they become realities, they then become classified as “issues” that must be addressed. So risk management, then, is the process of identifying, categorizing, prioritizing and planning for risks before they become issues.

Risk management can mean different things on different types of projects. On large-scale projects, risk management strategies might include extensive detailed planning for each risk to ensure mitigation strategies are in place if issues arise. For smaller projects, risk management might mean a simple, prioritized list of high, medium and low priority risks.

Speaker for the Event

Best PMP Trainer in Dubai.

Najmul Hussain is one of the most recognized lecturers in the UAE for Project, Program and Portfolio Management and PMI’s Professional certifications including PgMP©, PMP©, PMI-RMP©, and PBA©.
As a Program and Project Management Professional, he comes with more than 16 years of managing and delivering diverse and challenging projects he has successfully managed to integrate a blend of Information Technology, Telecom, Civil and Infrastructure projects towards the benefits realization of the overall strategy of the organizations that he has worked for.
He is also the Founder & Advisor to the local chapter of Project Management Institute (PMI) in the UAE where he has served as voluntary Vice President. He guests lecturer occasionally for Business Schools in the UAE where he delivers advanced programs on project management.

NAJMUL HUSSAIN
MBA, PgMP, PMP, RMP, PBA, ACP


Risk Management Model

Risk Management Model

Managing Risk throughout the Organization

Building a risk management protocol into your organization’s culture by creating a consistent set of standard tools and templates, with training, can reduce overhead over time. That way, each time you start a new project, it won’t be like having to reinvent the wheel. You’ll have a head start and a path already in place to more efficiently and quickly address the specific risks of your individual project.
Things such as your organization’s records and history are an archive of knowledge that can help you learn from that experience when approaching risk in a new project. Also, by adapting the attitudes and values of your organization to become more aware of risk, means your organization can develop a better sense of the nature of uncertainty as a core business issue. With improved governance comes better planning, strategy, policy and decisions.

Enroll Now


6 Steps in the Risk Management Process

  • Identify the Risk
    You can’t resolve a risk if you don’t know what it is. There are many ways to identify risk. As you do go through this step, you’ll want to collect the data in a risk register.One way is brainstorming or even brainwriting, which is a more structured way to get a group to look at a problem.
  • Analyze the Risk
    Okay, you’ve got a lot of potential risks listed in your risk register, but what are you going to do with them? The next step is to determine how likely each of those risks are to happen. This information should also go into your risk register. When you assess project risk you can ultimately and proactively address many impacts, such as avoiding potential litigation, addressing regulatory issues, complying with new legislation, reducing your exposure and minimizing impact.
  • Prioritize the Risk
    Not all risks are created equally. You need to evaluate the risk to know what resources you’re going to assemble towards resolving it when and if it occurs. Some risks are going to be acceptable. You would grind the project to a halt and possibly not even be able to finish it without first prioritizing the risks.
    Having a large list of risks can be daunting. But you can manage this by simply categorizing risks as high, medium or low. Now there’s a horizon line and you can see the risk in context. With this perspective, you can begin to plan for how and when you’ll address these risks.
  • Assign an Owner to the Risk

    All your hard work identifying and evaluating risk is for naught if you don’t assign someone to oversee the risk. In fact, this is something that you should do when listing the risks. Who is the person who is responsible for that risk, identifying it when and if it should occur and then leading the work towards resolving it?
  • Respond to the Risk

    Now the rubber hits the road. You’ve found a risk. All that planning you’ve done is going to get implicated. First you need to know if this is a positive or negative risk. Is it something you could exploit for the betterment of the project?
  • Monitor the Risk
    You can’t just set forces against a risk without tracking the progress of that initiative. That’s where the monitoring comes in. Whoever owns the risk will be responsible for tracking its progress towards resolution. But you will need to stay updated to have an accurate picture of the project’s overall progress to identify and monitor new risks.
    Risk management is complicated. A risk register or template is a good start, but you’re going to want a robust project management software to facilitate the process of risk management. A cloud-based tool that fosters the collaborative environment you need to get risks resolved, as well as provides real-time information, so you’re always acting on accurate data. Try Red Learning yourself and see, take this free course.
Open chat
1
Need help?
Hello! Can we help you?
Powered by