The Specifics of Project Risk Management
Category: Risk Management | Feb 25, 2010 |
Risk management, as the term implies, focuses on managing the risk. While the approach deals with all kinds and levels of risk, specific attention is logically devoted towards management and mitigation of risk arising from uncertainty embedded in the project. This is accomplished via a host of established strategies, deployed in a sequential manner. Risk management is an overall term, which is often sub-divided by various organisations and departments to ensure respective suitability. Examples could be a financial risk or say a legal risk. However, the term has a wider perspective and while it is not practical to cover it all here, this article follows a controlled approach and thus highlights upon the nitty-gritty of project risk management.
The Process of Project Risk Management
Risk management and thus project risk management is a comprehensive process aimed at risk identification, planning stages post risk identification, defining the essential activities to be undertaken, and therefore lessening of the recognised risks. While relating particularly to the project risk management perspective, activities begin by planning the risk aspect in relevance to the project under consideration. The plan is comprehensively defined to include even the most basic of tasks, essential for project completion. The idea is to plan risk management for the project. The next stage focuses on project risk identification.
Risk identification is a task responsible for recognising the potential risks and naming them. A risk manager could be appointed at this stage, who would be responsible for identification, input compilation and appropriate documentation for further stages. While identifying the project risks, risks can be divided into two categories: generic risks, which are almost universally applicable; other risks, which are the specific project risks. The other crucial tasks, which ought to be conferred due attention at this stage, relate to narrowing down to the precise cause of identified risks, and working out the possible impact the defined risks would pose.
What follows in the process of project risk management is the requirement to quantify the risks and the associated impact. Tools like probability, sampling and other statistical methodologies can be deployed to get precise results. Risks with these techniques can be classified in various categories, for example: impact, those requiring immediate attention, unavoidable, etc. The course to follow would vary with the categorisation.
Once the risks have been identified and quantified, it is now about working out the response. Project risk management aims at deriving reasonable solutions, which could be reworking the subtasks confronted with risk and thus avoiding the risk or perhaps eliminating the risk cause. Accepting and thus providing scope for the risk is also an option.
Controlling Risk
A proactive approach would be to control the risk element. This is enabled by closely understanding the requirements of the project. If the requirements are well understood, chances of incorrect objective statement and related threats can be suitably controlled. To ensure specific understanding it is essential to make room for the customer’s requirements as well. The requirements of the project ought to be quantifiable and realistically defined. Also they must be in line with the company’s overall purpose of existence. And then of course, the most important aspect is to be ready with an alternate course in case of severe threats.
Conclusion
Risk management and therefore project risk management is a continuous process, which begins with the project and continues throughout. It takes a careful examination of understanding whether there has been enough precaution or if more needs to be done to prevent harm occurring. All companies should have a project risk management program in place to prepare them for all eventualities.
Watch the video related to risk management
Dr. Suman Banerjee of Tulane University’s AB Freeman School of Business examines risk management and how it impacts corporate decisions in good times and in bad. What is financial risk management and how does it impact corporate value? Banerjee’s lecture explains the need for risk management and how it has arrived at the forefront of corporate management and investment strategy.
whats a curry dog?
who would actually believe or want to hear what a curry dog has to say
just one thing. in the 12.20 – if value per share > stock price I thought it means that stock is undervalued.. why does the guy say the other way round?
terrible accent apu!!!
You enthusiastic lost the message i dont seem the planning risk, neither how you have a qualitative and quantitative risk, i hoped other thing
I have to say that totally bullshit.
Thank you very much, but you told us about the roll and the importance of risk management and did not tell us how to use it, what tools we have for risk Identification, assessment, analysis and control.
I hope to find something can help me on that.
Thank you again
thanx for saving time
This guy is the Tony Robbins of risk managment…
This is not an overnight assignment!
The questions are straight-forward;-} what's your project?
We could be more specific with more details.
1. What are you trying to accomplish?
2. Why is it necessary? What will be the outcome?
3. Why are you doing this at this time?
4. What is included/excluded in this project.
5. Typical success factors might be time & budget.
Explain how you intend to track these.
Breakdown of work required & checkpoints.
What are the risk exposures?
Assessment of their impact on outcome.
How will you try to prevent/control these.
Explain how you'll manage changes.
What will you learn from tracking progress?
Here is some research results for help:
http://www.google.com/search?as_q=project+plan+template&hl=en&num=100&btnG=Google+Search&as_epq=&as_oq=&as_eq=&lr=&as_ft=i&as_filetype=&as_qdr=all&as_nlo=&as_nhi=&as_occt=any&as_dt=i&as_sitesearch=.edu&as_rights=&safe=images
This seems like a whole term project since you know about it now. That link will help some, but from what I remember doing, I had to have Microsoft Word and Microsoft Project.
You should learn how to do this in class as you progress.
Try http://www.expertrating.com
The biggest risk is not having top management support your cause. If the big wigs don't support the effort then the managment and staff will approach it with lackluster zeal. This is the most common cause of CRM failure; followed by untrained first responders.
Reality check.
The philippines has good sound laws but corrupt political influences always delay the implementation of these laws.
By the time these laws are enforced, they become so obsolete that another law must be passed (just like the politicians who regularly pass gas – i.e. fart through their mouth).
You could start by using the "auto summarizing" option in Microsoft Word. From that point, edit the document yourself so that it doesn't look too elementary.
There are some websites that are willing to do your homework for a price. However, I think it would be wiser to invest in summarizing the page yourself in the long run rather than hiring someone.
Repeated postings = repeated "reported"
tra la tra la!
yikes thats alot to type ummm ask a friend whos got the same homework and brain storm or whatever its a waste of time putting that on this website coz no one is gonna read all of that