Risk Management

Risk management is an important aspect of project management because it helps to identify, assess, and prioritize risks that could potentially impact the success of a project. By proactively identifying and addressing potential risks, project managers can minimize the likelihood of negative outcomes and increase the chances of delivering a successful project.

There are several steps involved in the risk management process:To create a risk register, project managers should follow these steps:

1. Identify risks: This involves identifying potential risks that could impact the project, including external risks such as market changes, and internal risks such as resource shortages.
2. Assess risks: Once risks have been identified, they should be assessed in terms of their likelihood and potential impact on the project. This helps to prioritize risks and determine which ones need to be addressed first.
3. Develop risk responses: Based on the assessment of risks, project managers can develop strategies to address or mitigate the risks. This might include creating contingency plans, securing additional resources, or revising project plans.
4. Monitor and control risks: Risk management is not a one-time activity. Project managers should continuously monitor and review risks throughout the project to ensure that they are being effectively managed.

•Pure or insurable risk

•Business risk

•Project risk

•Operations risk

•Technical risk

•Political risk

A risk register is a document that lists all of the identified risks for a project, along with details about each risk such as its likelihood, impact, and the planned response. Here is an example of what a risk register might look like:

Risks will happen so we need to manage risk.

 Risks in procurement and management need to be considered at the start of the project, while it is ongoing, and also after the risks have impacted the organization.

The idea is to create an organization that is robust in coping with risk.

1. Risk registers: As mentioned earlier, risk registers are documents that list all of the identified risks for a project, along with details about each risk such as its likelihood, impact, and the planned response. Risk registers can be used to track the status of risks over time and help project managers stay on top of potential issues.
2. Risk heat maps: Risk heat maps are graphical representations of risks that can help organizations visualize and prioritize risks. Risks are plotted on the map based on their likelihood and impact, with higher risks shown in more prominent colors.
3. Risk assessments: Periodic risk assessments can help organizations stay on top of potential risks by identifying new risks and assessing the likelihood and impact of existing risks.
4. Risk reporting: Regular risk reporting can help organizations stay informed about risks and ensure that they are being effectively managed. Risk reports should include information about the status of identified risks, any new risks that have been identified, and the actions taken to address or mitigate risks.

By following these steps, project managers can effectively manage risks and increase the chances of delivering a successful project.