Understanding Risks in Project Management
Ever created a checklist of a project you’re working on and it looks like everything seems okay, and then somewhereLearn more
Ever created a checklist of a project you’re working on and it looks like everything seems okay, and then somewhere along the line one very huge part of the project fails, someone doesn’t deliver on time, the weather disappoints, the very big payment didn’t pull through? All of these, delaying the final outcome of the project. Well, that’s what Risk Management is about. Here, we will discuss the types of risks and how to identify them along your journey.
Risk is a part of planning. When you start the planning process for a project, one of the first things you should think about is: what can go wrong?
Risk sounds negative, but it’s not. Issues will inevitably come up in your project management (did you just mumble God forbid? lol), but it is a fact, and you need a strategy in place to know how to manage them. But here’s the tricky part, how do you work towards resolving an unknown?
It sounds very odd but it is very practical. There are many ways you can get a glimpse at potential risks, so you can identify and resolve them.
As I managed more projects, I started understanding how managing risks work better and it became easier to preempt them, and after a certain number of projects, it was easy to find that the risks repeat themselves.
Developing a process to catalog these risks can save you a lot of time when you run similar projects in the future.
There are four ways to identify risks:
- Risk repository: The risk repository is simply and essentially a list of all risks you’ve encountered in finished projects, as well as their solutions. The idea is that if there is an overlap in the project’s objectives, there will also be an overlap in the risks.
- Expert analysis: Asking questions is the way to go. Engaging experienced project participants and stakeholders with questions about potential risks. Interview them about risks they’ve encountered in past projects and any gaps based on their opinion.
- Checklist analysis: This method involves making a checklist of your current resources and processes. You then make a checklist of the resources you should have to hit your targets. The gap between the two would help you identify potential risks.
- Status report extrapolation: In this tactic, you consider all the reports available to you – status reports, quality reports, progress reports, etc. – and extract potential risks from them. For instance, if the status report has too many open issues, there is a chance one or more of them could jeopardize the project.
Once you’ve identified risks, you can also segregate them into different categories, such as:
- Technical risks: Technological issues, requirements, performance concerns, quality concerns.
- External risks: Issues with stakeholders, contractors, suppliers, and the market.
- Organizational risks: Limited budget, too many project dependencies, logistical issues, resource availability, etc.
- Project management risks: Issues in planning, scheduling, estimating, and project communication.
Have you experienced similar risks when handling your project management process?
How did you manage the risks? Please comment below.