Risk Management in Project
Risk management is an important aspect of a project that is required to ensure the project success is earned. Depending on the type and scale of the project, different risks are associated and hence, in order to mitigate these risks, pre-planning is necessary. This is mainly useful to mitigate risks that are more likely to happen. For instance, in construction project, risks related to the infrastructure and machine failure is very likely to happen. Hence, before starting the project, the project managers ensure full working machines are being used and the infrastructure is built carefully and with high quality materials so that it does not collapse during the course of the project. Risk management process is to be conducted during the project planning phase. During this phase, the project manager and the other stakeholders should be able to identify the risks that are most likely to happen in the project (Moran, 2014). Moreover, they should also have a rough idea regarding the unlikely but possible risks that may happen. These risks may be related to operations, finance, safety and others. Hence, during the project planning, suitable steps must be implemented by the project manager so that these types are risks are mostly avoided. In spite of these, the risks may occur suddenly and hence, during the project planning, a suitable escape route also needs to be prepared for these situations. For the analysis, the technical expertise and experiences of the project manager and the other stakeholders are necessary.
The planning regarding the risk management must be done before the start of the project and after the preparation of a basic plan for the project. After the estimations of time and budget are done, risk analysis process should be started (Fernández-Diego, 2013). First, the project manager and then the stakeholders should conduct in-depth analysis of the prepared project plan and mark the areas where the risks are most likely to occur. These areas are to be identified by the stakeholders using their experience and technical expertise. After this, the risks should be categorized into likely and unlikely risks. A separate plan should be made to mitigate each of the categories of the risks. Finally, the stakeholders and project manager should agree upon a suitable escape plan in case the risk occurs anyway.
Risk assessment matrix is extremely helpful in this process as it categorizes the different risks in terms of likeliness of happening, intensity of effect and effect on a particular field of the project. Moreover, the risk assessment matrix also helps to place the risks under a particular stakeholder based on the field of the risk so that the stakeholder can prepare prior plan for mitigating the risk (Moran, 2014). Again, the risk assessment matrix also provides the list of all possible risks and hence, it can be known exactly how many possible risks are in the project. The risk assessment matrix also determines whether the project is feasible or not in terms of the risk factors and success rates in mitigation of such risks.
Fernández-Diego, M. (2013). Project Risk Management. In Project Management for Environmental, Construction and Manufacturing Engineers(pp. 75-90). Springer Netherlands.
Moran, A. (2014). Project Risk Management. In Agile Risk Management (pp. 17-32). Springer International Publishing.