Planning for Risks - Project Management

Planning for project risks is an activity that you should undertake for all projects. The better prepared you are going into the Executing phase of the project, the more likely you'll be able to respond to risk events with a cool, level head. In Chapter ," Developing Project Management Skills and Expertise," we talked about operating in fire-fighting mode. When you're in fire-fighting mode, the object is to put the fire out—fast. That usually means that you deal with things in the quickest, easiest way you can just to put the fire out. And putting the fire out doesn't necessarily solve the problem in the long run. Planning for risks by identifying them, analyzing their impact, and preparing response plans where appropriate will help you avoid risks altogether in some cases and minimize their impact in others.

Tip:Project risk is highest during the early phases of the project and lessens as the project life cycle progresses.

Project risk is higher during the Initiation and Planning processes than later in the project. More factors are unknown at the beginning of the project, and the work of the project hasn't begun. As the work of the project is completed, project risk lessens. However, it's important to keep in mind that the potential impact of unidentified risk is much greater as the project progresses because time and money have been expended on the project. That's why it's important to identify risks and develop plans to deal with them early on in the project.

Risks are often ignored and the risk-identification and analysis process is often skipped because of a lack of understanding of the risk management process. Risks aren't something to fear. Risks should be identified and documented and their impacts examined to determine opportunities that may spring from the risk events or to develop risk response plans. Sometimes the process of risk identification itself will minimize risk impacts and allow you to come up with plans to avoid the risk altogether.

Risk response plans involve detailed actions of how the organization will deal with the risk should it occur. They include descriptions of the risk events and where or when in the project the risk events could occur. They should also include a description of the causes of risk and how the risks impact the project objectives or deliverables.

In our example project, we identified the possibility of a snowstorm on the day of the employee meeting as a risk that needs a risk response plan. The plan should include what's described in the previous paragraph, and it should also include the alternatives available to deal with the risk event. Perhaps you can avoid the risk altogether by holding the meeting at a hotel in town instead of the mountain resort; the company could consider hiring drivers with four-wheel-drive vehicles to transport people to the event; and so on. There are some specific responses you should consider when writing your risk response plan that we'll cover in the next section.

All rights reserved © 2018 Wisdom IT Services India Pvt. Ltd Protection Status

Project Management Topics