Risk management in project management: how to respond to risk
Risk management is a key area of project management and how you and your project team respond to risk is integral to the success of the projects you manage. As such, in this article, we’ll explore risk management in project management and, specifically, how to respond to risk.
Risk management in project management
When we talk about risk management in the context of project management, we’re referring to the practice of identifying, evaluating and preventing – or mitigating – risks to a project that could impact said it’s desired or expected outcomes.
These project risks can include:
- Low performance
- Staff changes
- Additional or unforeseen costs
- Production and/or delivery delays
- Lack of resources
How to respond to risk
When responding to project risk, focus should be initially on prevention and – where prevention is not possible – on mitigation of risk.
However, within this, it’s also integral to a project’s health to understand that – in order to prevent risk – your team must plan for it, and building a risk management process into your project planning phase will significantly reduce risk and the impact of those risks on your project.
As such, a risk management process should include the following elements:
- Risk identification: brainstorming potential and real risks to the project with your team
- Risk analysis: assess each possible risk, the likelihood of this risk occurring, and label them in terms of severity; such as high, medium and low risk
- Risk ownership: to ensure risks are identified and handled appropriately, assign one team member to the the ‘risk owner’ and oversee the risk management process
- Risk response: the risk owner and the project manager should come together to devise a risk strategy; handling the risk in a manner they both deem appropriate
- Risk monitoring: here, the risk owner should monitor the risk in question, ensuring a resolution is reached within an agreed timeframe
Risk management is about identifying and strategically responding to risk in a methodical, preventative manner – knowing and planning for what could harm your project or prevent it from achieving the desired outcomes, and – ideally – ensuring these don’t happen!
Sycamore Gap’s PMO software can help with this by providing you with a clear picture of your projects and the key metrics associated with your projects which, in turn, will help you easily and quickly identify and mitigate any risks that arise.
What’s more, the one click dashboard / reporting makes building reports almost instant; leaving you and your team with much more time during your working day(s) to dedicate to proper planning, training, feedback and communication.
To find out more about Sycamore Gap’s PMO software or book a demo, please click here.
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