terms, anything that might delay or hamper the advancement of a project can be
termed as a risk to that project. A risk is a problem in future, one that may
or may not happen. Risk management is an important task for any project
manager. He or she has to always be on the lookout for potential problems, and
once such risk is identified, proper steps should be taken to mitigate the
risk. The success or failure of a project is, thus, dependent on how well the
project manager can take care of the risks. A good project manager can avoid
negative risks and grasp positive risks, as and when the situations arise.
common risks of a project are usually associated with the technology used, the
environment, the team members and their interpersonal relationships, the
workplace, etc. The first step in risk management is properly identifying and
categorizing the risk. Most risks can be categorized into four broad divisions,
Technical, quality, or performance risks: These
are risks associated with the technology used, the quality expected, and the
Project management risks: These risks result
from poor management of the project resources and time.
Organizational risks: The concerned
organization’s environment, funding, competition, etc. can also pose
significant risks to the project.
External risks: These are risks not associated
with the project directly, but they can also significantly affect the project.
Examples would be labour issues, legal issues, etc.
The next step is planning the risk management. It is done by
deciding what steps should be taken when or if a risk comes into being.
comes the stage of risk monitoring and tracking. A project is not a still
object. It is not always possible to visualise all possible risks while
beginning the project. As it advances, some risks may become obsolete and new
risks may even come into being. For that reason, it is important to
periodically re-evaluate the risks associated with the project and the
management processes of such risks. If any new risks are identified, the
possible action plans for mitigating those risks must also be devised.
Mitigation plans are generally devised in such a way that if a risk goes over a
certain limit, the relative mitigation plan is activated.
mitigation plans consist of a risk response for each possible risk. Every risk
is unique and the response must be created after taking into account all
possible variables and scenarios. It should be planned in such a way that the
negative effects of the risk are minimized. For that, it is very important to
properly assess the risks. The various responses that can be put forth to a
Avoidance: Avoiding the risk by changing the
Transference: The responsibility can also be
shifted to a third party.
Mitigation: The risk can be mitigated by taking
an appropriate action plan.
Acceptance: Accepting the responsibility of the
risk generally means that there are no plausible ways to avoid, transfer, or
mitigate the risk, so the concerned party must bear the costs.
Thus, as the above discussion shows, risk management is an
integral part of any project. An efficient project manager must go through all
the requisite steps of risk identification, risk categorization, planning risk
monitoring, risk mitigation, and risk response. Essentially, risk management is
nothing but developing backup plans for scenarios where one or more of the
risks might happen. Without such plans, chaos might descend on the project in
the face of any adversity. That is why the level of success of any project is
hugely dependent on the actions of the project manager and his or her risk