According to the Project Management Body of Knowledge, there are 6 processes to Risk Management namely:
- Risk Management Planning
- Risk Identification
- Qualitative Risk Analysis
- Quantitative Risk Analysis
- Risk Response Planning
- Risk Monitoring and Control
However, before we all get ahead of ourselves, let's first try to identify the meaning of a Risk.
Risk - An uncertain event or condition that, if it occurs, has a positive or a negative effect on at least one project objective, such as time, cost, scope, or quality. From this statement, we can see two characteristics of a Risk.
The first is that there is a certain level of uncertainty or probability. A risk could or could not happen. If it is something that is already there, then it is not a risk. More likely, it is an issue. To say that the rain is a risk, is wrong. To say that it might rain, is right.
The second characteristic is that it has an impact. All risks have an effect on the projects, whether positive or negative. Each risk could actually have more than one impact. This is why Project Managers need to manage risks - because of the impact it could bring to the project.
Risk Management Planning - As with every other PM activity. The first step is always to plan. But what do you plan about? Here's a couple of stuff:
- Methodology
- Roles and Responsibilities
- Budgeting
- Timing
- Risk Categories
- Probability and Impact Matrix
- Stakeholder Tolerances
- Reporting formats
- Tracking
Depending on the size of the project, not all of these items are throroughly put in a plan. However, it would be good practice to include and/or reference all of these in your plan. Take for example methodology. Some companies already have standard risk management methodologies in place. In doing your own risk management plan for your project, you would just need to reference the company risk managment methodology - not create your own. Just make sure that everyone involved in risk management actually know all about this methodology you are referencing. =)
More inputs next time...
1 comment:
To manage the risk successfully one should have Pmp Proffessional s.With high competition, companies have to develop products fast and innovatively always adding value and greater customer satisfaction. it is important to learn and practice its basic principles which collectively and naturally help in effective management of risk. As a project manager i follow PMBOK guide of PMI
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