| All of us manage risk in our day to day life by | | | | ongoing risks that are best handled by the |
| buying insurance cover for our life, house, car etc, | | | | business. Generic risks are risks to all projects. |
| so why not do risk management for the project. | | | | 2. Risk Quantification |
| Risk Management is a key responsibility of the | | | | Risk need to be quantified in 2 dimensions. The |
| project manager. | | | | impact of the risk needs to be assessed. The |
| Risk management is one of the project | | | | probability of the risk occurring needs to be |
| management disciplines which have a direct | | | | assessed. If probability is high, and impact is low, it |
| impact on the project success or failure. A better | | | | is a Medium risk. On the other hand if impact is |
| risk management ensures that you are prepared | | | | high, and probability low, it is High priority. |
| for the unforeseen circumstances and when they | | | | 3. Risk Response |
| actually happen, you can handle it well. Some | | | | A risk response plan should include the strategy |
| Project managers show helplessness in case of | | | | and action items to address the strategy. The |
| some external disturbances like workers strike. | | | | actions should include what needs to be done, |
| But good managers do not. They do plan for such | | | | who is doing it, and when it should be completed. |
| risk and have a ready work around. | | | | 4. Risk Monitoring and Control |
| However, all real projects carry risk through | | | | The final step is to continually monitor risks to |
| uncertainty. The most obvious examples of | | | | identify any change in the status, or if they turn |
| sources of project risk comes from: | | | | into an issue. |
| * dependencies (internal or external) | | | | At the start of a project, the potential impact |
| * assumptions made by project team members | | | | of risk is almost unlimited. The simple choice is to |
| (about any aspect of the project). | | | | either dedicate proper and timely attention to |
| There are 4 stages in the Project Risk | | | | understanding and managing risk, or suffer its |
| management process : | | | | consequences. On large projects, there are few |
| 1. Risk Identification | | | | areas where a Project manager can have a |
| In this stage, we identify and name the risks. | | | | greater impact on a project than the area of |
| There are different sorts of risks and we need to | | | | risk. |
| decide on a project basis. Business risks are | | | | |