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The benefits of risk management in projects are substantial. You can gain a lot of capital if you deal with uncertain project events in a proactive manner. The result will be that you minimise the impact of project threats and seize the opportunities that occur.
This allows you to deliver your project on time, on budget and with the quality results that your project sponsor demands. Also, your team members will be much pleasant if they do not enter a fire fighting mode needed to repair the failures that could have been prevented.
If you don't truly embed risk management in your project, you can not reap the full benefits of this approach. Professional companies make risk management part of their day to day operations and include it in project meetings and the training of staff.
Two main sources exist to identify risks, people and paper. People are your team members that each brings along their personal experiences and expertise.
Other people to talk to are experts outside your project that have a track record of the type of project or work you are facing. They can reveal some booby traps you will encounter or some golden opportunities that may not have crossed your mind.
Projects tend to generate a significant number of (electronic) documents that contain project risks. The project plan, business case and resource planning are good starters. Other categories are old project plans, your company Intranet and specialist websites.
A good approach is to consistently include risk communication in the tasks you carry out. If you have a team meeting, make project risks part of the default agenda.
Modern risk approaches also focus on positive risks, the project opportunities. These are the uncertain events that are beneficial to your project and organisation. These good guys make your project faster, better and more profitable.
Make sure you create some time to deal with the opportunities in your project, even if it is only half an hour. The chances are that you will see a couple of opportunities with a high payoff that doesn't require a big investment of time or resources.
The risk owner is the person in your team that has the responsibility to optimise this risk for the project. If a project threat occurs, someone has to pay the bill.
This sounds logical, but it is an issue you have to address before a risk occurs. An important side effect of clarifying the ownership of risk effects is that line managers start to pay attention to a project, especially when a lot of money is at stake.
The criteria most project teams use is to consider the effects of a risk and the likelihood that it will occur. Use consistent prioritisation measure and focus on the big risks.
Understanding the nature of a risk is a precondition for a good response. Risk analysis occurs at different levels.
A simulation to show your project sponsor how likely it is that you finish on a given date or within a certain time frame. A similar exercise can be done for project costs.
The information you gather in a risk analysis will provide valuable insights into your project and the necessary input to find effective responses to optimise the risks.
Execution is key here. If you deal with threats, you have three options, risk avoidance, risk minimisation and risk acceptance. The biggest category of responses are the ones to minimise risks.
A final response is to accept a risk. This is a good choice if the effects on the project are minimal or the possibilities to influence it prove to be very difficult, time-consuming or relatively expensive. It is a conscious choice to accept a particular risk.
Maintaining a risk log enables you to view progress and make sure that you won't forget a risk or two. A good risk log contains risk descriptions, clarifies ownership issues and enables you to carry our some basic analyses with regard to causes and effects. Doing projects is taking risks.
Tracking tasks is a day-to-day job for each project manager. Integrating risk tasks into that daily routine is the easiest solution. Risk tasks may be carried out to identify or analyse risks or to generate, select and implement responses.
Note : Please contact your nearest Arunaya office for further details.