Projects, by definition, are uncertain. To be successful, a project manager needs to address risk management proactively and consistently throughout a project. A risk if it occurs, has a positive (opportunity) or negative (threat) effect on one or more project objectives such as scope, schedule, cost and quality.
Risk management should be an integral part of every project undertaken. Areas of risk to be addressed include the:
As a guide, a risk management plan (or equivalent) includes:
Risks are logged in a risk register for subsequent management control and visibility. A clear expression of each risk is logged with its cause, the likely event and the effect the risk could have on the project.
Whilst the project manager is key to ensuring risks are defined and documented, remember that participants in risk identification should include project team members, customers, subject matter experts, other project managers, stakeholders and risk management experts. Everyone involved in the project should be encouraged to identify potential risks.
Quantitative analysis takes the resulting prioritised risks and looks at numerically analysing the effect on overall project objectives. The risk register is updated with the results from the analyses.
A response plan can subsequently be embedded within the project plan and can then be actioned as appropriate. Where appropriate, contingent response strategies may need to be developed; these are often referred to as contingency plans or fallback plans and include identified trigger events that set the plan in effect.
Often time and energy are expended on identifying and analysing risks, then documenting responses in a risk register, but no action is taken to implement the response. The implement step is important to ensure that risks are being managed proactively.
A Project Manager’s role is to manage risk within their projects in an integrated, iterative and systematic manner. By doing so they are required to ensure threats have a reduced impact on the project outcome, whilst at the same time improving the likelihood of opportunities for the project.
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About The Author
Tracey Copland, Head of Best Practice at PM-Partners group
Tracey has been involved in management, finance and business consulting including Portfolio, Programme & Project management for 20+ years. Together with her skills and experience, Tracey is a flexible professional seeking to achieve a high work standard, focussing on value-add.
Having been with PM-Partners group for 15 years, Tracey has held roles including Consultant/Trainer, Head of Training and currently, Head of Development. Tracey has provided training and consultation services to clients in both the public and private sectors, across various disciplines and at all levels including Project, Programme, Portfolio and Change Management, and Agile practices.