Risk Management within a project or a program is essential and contributes to the success and failure of projects and/or programs. There are numerous ways to identify and mitigate risks associated with each project.
Identifying and monitoring project risks is a pre-requisite for the success of any project. It is also important to understand that each risk should be identified only once. This must be done to allow for proper monitoring, mitigation and managing the risk for the project. Many times, the same risk is identified multiple times within a project, which can create confusion and subsequently can add additional overhead from a risk management perspective. This will make it harder to track the risks and create the illusion of more risks than truly are related to the project.
Additional Risks Add to Project Timeline
Projects will always have risks such as market risks, capital risks or execution risks. When not managed and identified properly, risks can multiply and add unbudgeted scope to each project resulting in wasted resources. Each project must identify the risks through qualitative and quantitative assessment. One way to achieve this is by using brainstorming sessions with all project participants, so that risks are identified, and controls can be put in place for mitigation. This will allow all stakeholders to understand the risks, what is accepted and how the mitigation applies to the risk and the project. In some instances, the risk may impact the budget and or the timeline based on the probability of them occurring. In this instance, the risks cannot be ignored but used for management to make decisions for the next course of action on each risk identified. If fatal risks such as lost market opportunity due to delay in execution are identified, higher level of controls can be put in place to protect the project from a disaster.
Risks Can Provide Opportunities
You may have heard how weaknesses can create potential opportunities during a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. Risks in a project can also help pave the way for additional opportunities. Projects are based on requirements and deliverables that are driven by the Project Sponsor and Stakeholder goals and objectives. This forms the basis for project initiation and project planning. A thorough review of the requirements and deliverables during the planning process, with an emphasis on the challenges and roadblocks for fulfilling the goals and objectives, will help in identifying the associated risks.. Focus on the end goals and objectives is crucial here, as the goals and objectives typically do not change during the project. This process may add additional tasks and or activities due to identified risks.
Within each risk identified there can be an opportunity to deliver additional services, or an opportunity to identify additional projects and/or additional phases to the project. This helps in looking at a project as a program with a holistic view thereby augmenting value realization for the customer or stakeholder.
Be sure to read the blog Project Stakeholder Communication for additional tips about project management.
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