Risk Analysis and Risk Management
Risks Analysis and Risk Management
What is Risk Managament?
Risk management can be defined as a process of identifying, analyzing and responding to risk factors throughout a project and in the best interest of its objectives (Business Improvement Architects https:bia.ca/risk-management-the-what-why-and-how/ downloaded 25/05/2016)
Risks involves the probability of something going wrong in a project with its resultant negative consequences if it does. Therefore if your project is hit by a consequence that has not been planned for, it can have the effect of an escalation in costs, increase in time and can even cause reputational damage to your company.
Risks cannot be managed if they are not first identified. It is therefore of utmost importance that any project manager has the tools to adequately assess the possibility of risks occurring with the view of managing the risks and minimizing the impact that it might have on the outcome of your project.
The risks analysis process should not only be conducted by the project manager and his/her project team but should also involve all relevant stakeholders. If for example you are developing a project plan for the launch of a political party manifesto launch, you should involve the client and their sub contractors in terms of identifying risks associated with security, transport, venue safety, sound etc.
Risks analysis should be done very early in the project preferably during the planning stage and should continue throughout the project lifecycle even up to the execution of the project. Identifying of risks early allows risk owners to take action expeditiously which can save huge costs and time within a project.
There are a wide variety of tools and techniques that can be used to identify risks. These include amongst others, document reviews, brainstorming sessions, interviews, check list analysis, assumption analysis, SWOT analysis, expert judgements etc.
Once one has identified risks and its possible impact on the project, you have to start to look at cost effective ways of managing them. Risks can be managed in the following ways
- Avoiding the risk completely
- Share the risk
- Accept the risk
- Control the risk
- Mitigate the risk