Understanding Project Management risks: a complete guide

Understanding Project Management risks: a complete guide In project management, you must be aware that mistakes happen and there are risks to any project you undertake. When a project fails, it's most likely because the team involved haven't properly identified the risk first, and taken the steps needed to mitigate them. How can you be sure you're not putting your own project at risk? Here's how to identify and avoid risk in your own projects. Understanding Risk Management Firstly, what is risk management? When working on any project, it's the process of identifying, tracking, and managing any potential risks that you may come across. When you're managing risk from the very beginning of a project, you're protecting it from harm and making it more likely that it will be successful. It's a process that must be begun early, as you want to be aware of the challenges that you may come across. If you're aware of them now, that means that you can mitigate any issues before they can even arise. Be aware though, that not all risks are negative. Some may actually create opportunities for you. That's something that you'll need to consider in your risk plan. The most important thing about risk management is that it’s handled throughout the whole project process, not just at the beginning. Everyone in the team needs to be involved, as that helps you find success. Identifying Risks The first thing you'll do in risk management is identify the risks that you'll face in your project. That means taking the time to sit and consider every risk that you may come across. Of course, you can't plan for everything, but there are going to be plenty of risks, both positive and negative, that you may be able to think of. There are several steps to this process: Template specification: You'll create a risk statement based on feedback from your team. This will include areas of risk, causes, impacts, and events. When you have a template in place, it helps you focus your team on the risks they're facing. Basic identification: There are two questions about risk that you'll need to answer here. Firstly, you'll want to know why or why not us? That can be analysed in a SWOT analysis. Then you'll need to ask whether the risk has been experienced before. This can be answered in a statement, using data from past projects. Detailed identification: This is where you'll get into the meat of the risk, and properly understand it. There are five ways you can do so: Interviewing Assumptions analysis Document reviews Delphi technique Brainstorming Read More: Scrum vs. Kanban: An In-Depth Comparison Internal cross check: Here, you'll map risks to corresponding elements in the work you'll be doing. There you'll see which elements of the project are riskier and others and start forming strategies to minimise risk. Statement finalization: This is where you'll place all your findings in diagrams, showing where the risky areas are, and the causes and impacts of these risks. Creating A Risk Management Plan Now you know what the risks are when it comes to your project, you'll need to come up with a plan to help you manage those risks. The first thing to do will be to assignment aspects of risk management to different team members. Each team member will have their own job to do in the project, and so they can take on the risk management for that particular aspect of the project as a whole. You'll also have to have a plan in place if a risk factor does come up. What happens in that case? Who oversees responding to the risk? What will you do if this happens? If you know this ahead of time, it makes mitigating those risks a lot easier overall. The plan should also include monitoring for new risks as the project goes along. There may be new issues that you need to watch out for, so be alert for these as you work. Looking for a top-notch custom software development company? CONTACT US Assigning Risk Ownership There will be several people in your team that need to take ownership of certain risks in your project. When creating your plan, you may think that it should mostly fall on C suite level employees. There will be risk they need to pay attention to, but there's other employees who should handle it too. Project sponsor: These people will have the overall responsibility for the project and will be the ones who sign off on the risk management plan. Project manager: They will have overall responsibility for the risk management plan. They'll be the ones who facilitate communication and escalate issues when needed. They’ll try to focus on how well the project should be planned to avoid deviations. Thus, understanding the major components of a successful project is extremely important. Risk owner: This can be an individual member of the team, or a stakeholder who isn't part of the project creation. How many people you have handling risk will depend on how large the company is. In smaller companies, you may find that some members must wear multiple hats when it comes to risk management. Making Risk Management simple Now you know all the basics of risk management, so you can start stopping those risks in their tracks if they do come up. There are ways that you can make risk management easier for both yourself and your team. For example, using dedicated software to make plans and share them will help a lot. If a team member wants to know what to do about a certain issue, they can simply look it up. You can also create workflows for these eventualities. They will guide project team members step by step through a process they need to go through, should they ever need it. There is a lot to know about risk management, but if you want to ensure the success of your projects, you'll want to plan ahead for it. This guide shows you the basics of how it’s done, so you can stay one step ahead.

Kapil Panchal

A passionate Technical writer and an SEO freak working as a Content Development Manager at iFour Technolab, USA. With extensive experience in IT, Services, and Product sectors, I relish writing about technology and love sharing exceptional insights on various platforms. I believe in constant learning and am passionate about being better every day.