Each and every project has risks. The solution to managing a project is not to avoid risks, but to understand the risks. A risk is the possibility of an event or condition that would have a negative impact on a project. Risk management is the process of identifying, mitigating, and controlling the known risks in order to increase the probability of meeting your project objectives.
Activities that Lead to Risks:
Critical Risks – These types of risks arises due to the insufficient attention on problems on the critical path. These risks have the greatest impact on the finishing stage of the project.
Inexperienced team members – Mostly risks arises in a project due to the inexperienced team members of the project. Involving experience less team members in a project will lead to the incompletion of the project.
Number of tasks occurring at the same time
A project should have a clear schedule for the tasks and its management. Sometimes too many tasks may occur at the same time. This will lead to risks in the project. Maintaining those tasks requires extra time and resources. But a pre-planned project contains only a specified time and resources which lead to inappropriate task management.
Project’s that running out of time
In some cases, projects may run than the scheduled time. That is the project is not completed within the planned time. This will also create risks among the vendors.
To efficiently handle a project and to complete the project on time a project management team should take care of the risks and issues in the project and has to resolve them. There are special training programs are available for this project management purpose. For example, Prince2 Certification is a training program. In this training, participants will learn about different risks in the project and manage those risks.
There are some general measures a project management should undergo for managing risks in their project.
Avoid the risk
If a risk creates serious consequences in the project, then the best solution is to avoid the risk. For example, an organization may decide that using the same manufacturing activities for various deliverables creates a risk in the project timing then it can be avoided by using the same process sequentially for the deliverables.
Mitigate the risk
Minimizing the probability of a serious risk is a useful solution if the project management team is comfortable with this option. For example, a team can deploy a simplified and well-understood process if more innovative and costliest process takes a long time to install.
Transfer the risk
This is a general method used to control risk. That is to transfer it to an external vendor. For example, if the documentation of a computer sub-system is too large in scope for internal resources to complete, portions of it can be contracted to an external vendor to develop. Insurance companies are also used as a means to transfer risk, especially monetary risks that are transferred via warranties and payment bonds.
Risks are unavoidable one in a project. Managing the risks efficiently with good skills is the best solution to risk management and to make the project successful