The Key to Effective Project Risk Management

Effective project risk management is very significant for the success of a project. Project risks which remain unidentified or which are not controlled in any manner are bound to eventually to undermine all other areas of project management.
Specifically, projects risks that are not adequately managed impact the time, quality and financial constraints of a project or even the organisation as a whole.

How to define Project Risk Management?

Project Risk management is a proactive process for the identification, assessment and management of risks.
In the project management context, the fundamental idea remains the same. Project risk management is a process of looking forward, identifying potential risks, analysing and assessing them and then putting plans in place to measure or cater to them.

Effective risk management requires a fired up approach, early risk identification, an appropriate level of documentation of risks via a risk register and the involvement of all relevant stakeholders in all stages of the risk management process.

How to distinguish between a Project Risk and a Project Issue?

Many beginners or those new to project management are often baffled over whether something is a project risk or a project issue. The quickest way to differentiate is to determine whether the event concerned has already occurred or not. If an event has already occurred it is a project issue, whereas something that is yet to occur and indeed may not occur, is a project risk.

Role of the Project Manager in Risk Management

While all stakeholders and project team members have a responsibility to identify project risks, the project manager has a number of responsibilities associated with project risk management. These responsibilities are as follows:

(a) Seeking advice on appropriate risk treatment strategies
(b) Management and maintenance of the project risk register
(c) Identifying potential risks in a timely manner throughout the project lifecycle
(d) Coordinating risk evaluation
(e) Coordination of the implementation of risk treatment strategies

Value of Project Risk Management in a Project Success

In essence, appropriate project risk management processes add to the probability that a project will deliver what is required, when it is required and at the anticipated cost. Risk management reduces uncertainty in the area of project management and stands to reduce the need for change.

Risk management however should not be isolated to individual projects and organisations should also consider project portfolio risk management processes as a part of an integrated and comprehensive risk management strategy.

Irrespective of the tools and methodology used, project risk management is pivotal to project success. Following the previously outlined three core activities of project risk management put a project in better state to deliver in-time and budget-tuned result.