Is It Really Worth the Risk? - Planning Project Risk Management
As a project manager, you should always consider all variables that play into your project. Stakeholders have the right to know all the things the development is incorporating, as well as the decision they make. Some decisions or elements may carry risk when using them. Although the return may be good in the long run, you need to weigh out any cons as well. In order to fully access this, you should implement project risk management.
What is Project Risk Management?
Project risk management is a process where you can identify, analyze and respond to any risk(s) that come up during the development a project. This is a way to ensure that the project can meet it's intended goal and remain on track. Risk management has positive impacts, such as selecting projects and their respective scopes, as well as creating realistic estimate numbers and schedules. It can be applied differently based on the scale of the project. Smaller projects may just have a list of the risks while larger scale projects provide more details to consider every "cause and effect" element/decision.
How Can You Plan Project Risk Management?
In order to incorporate project risk management, you should take one step ahead and plan out risk management. You can do so by creating a risk management plan for your project. A risk management plan is a document that lists the procedures that you can utilize to manage risk throughout the lifetime of the project. This is something that should be incorporated in the beginning stages of project planning by holding many meetings. When the team does this, they need to consider all possible parameters, such as risk policies, risk categories, important project documents, past-project reports and templates. It is also important to clarify responsibilities and roles, as well as how the risk management will actually be completed. Here are the elements that you can collect when planning a risk management plan:
Methodology
You should be able to identify the tools and specific approaches that you will take when preforming your risk management activities. Some methods include risk analysis, risk assessment, and risk mitigation.
Risk Register
A risk register, also known as a risk log, is a risk management tool that you can use to identify potential risks that can affect the project. This can be considered as the first step in project risk management, as it will help you list out risks with their associated priority levels. That way, you can help navigate the team into how to respond to these risks.
*Example of a Risk Register
Identify/Assess/Eliminate/Minimize Risks
When considering risks, you have to make sure you take all the necessary actions in order to assess them. The first step is identification, being able to identify all and potential risks that may come up before, during, and after the project. The second stop would be to assess these risks. Using something such as a risk register, you'll be able to categorize risks based on their priority and impact towards the project. The third stop would be to eliminate risks. Some risks can be taken and considered while other risks may pose a greater demerit. Thus, you have to eliminate the risks the team and stakeholders don't want to take. After doing these three things, you can future proof your project by minimizing risks. Being able to change some parameter of your project can ensure you don't run into the same risks as the first time, but make sure you can understand all the implications that could happen if change occurs.
Risk Response Plan
A risk response plan designates strategies that you can use in order to tackle negative project risks. This is something that can be a part of the risk management plan. Usually you want to make sure you assess all risks before creating the risk response plan.
Assign Responsibilities/Roles
If anything were to come up during the project that may affect it, it would be a good idea to assign roles and responsibilities. Although there are two main roles of the project team and project manager, you can make your life easier by assigning respective duties to each member rather than holding the same standard to everyone. This can also avoid confusion and clear up any misunderstandings if members are confused on their role and what they can/can't do.
Develop a Contingency Plan
If you've heard the term "a plan B," that is what a contingency plan is. A contingency plan essentially defines action the team can take when a risk occurs. We may not always have the resources to predict the future so it doesn't hurt to have a backup plan.
Communication
Communication is key for all aspects of a project. This shouldn't be emphasized more, as it is very important to make sure everyone is on the same page. Being able to explain all risks and their respective associations will allow the team and stakeholders to understand the possibilities that may occur.
Sources
Textbook: Information Technology Project Management 9th Edition by Kathy Schwalbe
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