9 Risk Management Steps You Need for Your Project

9 Risk Management Steps You Need for Your Project

When working in any market nowadays, you need to understand that risk and uncertainties are a normal part of project development. They are the reason that even the Big shots of any industry run into trouble from time to time.

Usually, we see that more than half of all IT projects exceed their allocated budgets and deadlines just because they underestimate the power of risks and uncertainties and what they can do to a project development process.

But don’t worry, there are a lot of different ways you can identify different risks and scope creeps, way before the project goes into development.

To get rid of risks, the team has to have a powerful risk management policy in its project memo that helps them steer their project away from any trouble. This risk management policy is an indication that the company is ready to tackle any eventuality if it ever comes forth.

But first what is it all about?

What is Project Risk Management?

Project risk management is the ultimate process of minimizing the potential problems that could negatively impact a project’s timetable. The risk could be any event that might affect the people, the process, technology in between, or the resources involved in the process. Just like issues, which are bound to happen regardless, risks are the events that have the ‘potential to occur’ and you won’t be able to anticipate the ‘when’. 

It is due to this uncertainty, that any project risk requires preparation in order to manage them efficiently. So, what is risk management in project management? It is all about preparing in advance for the risks and handling all the obstacles and problems that might disrupt the success of your project. 

Let’s take a look at 9 ways you can keep your project safe from any risks or obstacles.

Risk Management Steps You Need for Your Project

1. Identify Risks

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This step should be started when the project is in the brainstorming phase. The team has to brainstorm all of the scope creeps and expected risks at every step of the development phase.

They need to go through all of the factors in the project development that are essential in completing the project, and also they need to ask the stakeholders about their concerns and problems related to the project.

In order to remain effectively and manage everything smoothly, all the risks and opportunities identified must be super precise and as achievable as possible. Each of the features must allow the opportunity to be valid. Moreover, the title of the risk or the opportunity must be self-explanatory and clearly defined. 

The following are some of the factors that are prone to risks and should be thoroughly monitored.

  • Technology
  • Requirements
  • Budget
  • Materials
  • Suppliers
  • People
  • Legislation

2. Create a Risk Register

The team needs to create a record of all of the risks they encounter, in a spreadsheet, which the rest of the team can also monitor. They need to input all of the following entities in their risk register.

  • Date of the Risk in question
  • Description
  • Impact
  • Likelihood
  • Owner
  • Risk Response
  • Status
  • Action
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To manage the risk of the projects, you can use an all-in-one risk management tool, nTask. With nTask, you can manage risks from identification to resolution and coordinate with your team seamlessly. Check out the risk management features of nTask.

3. Identify Opportunities

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Not all risks that come forth are bad. There can be hidden opportunities in them as well. That’s why you need to identify all of the risks and what kind of impact they can have on your project.

If they are bound to have a negative impact then remove them from your project as soon as possible. But if you notice that these risks can have a positive impact on your project then you need to incorporate them into your project as soon as possible.

4. Determine the Impact and Likelihood of the Risks

All the risks need to be ranked and prioritize accordingly. Most risk management solutions have different categories of risks, depending on the severity of the risk. It is essential to evaluate the risks and rank your risks because it allows the organization to gain a holistic view of the risk exposure of the whole organization. The business can become vulnerable to multiple low-level risks, however, it may be not required by upper management for intervention.

Closely monitor all of the risks and find out what their impact might be and how likely they are to affect the project. Rate them on a scale from 1 to 5 and determine their impact on different parameters like cost, time, and quality. Two major types of risk assessments include Qualitative risk assessment and Quantitative risk assessment.

5. Determine the Response

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Every risk is a potential threat, but you have to focus on those risks first that have the biggest potential to damage the project. This step is all about monitoring the risks throughout the project planning and updating the risk response plan as needed. It’s more about being aware and staying in control of all identified project vulnerabilities. This also includes implementing risk mitigation resources, preventing and tracking, and reporting the risk status. 

A Pro-tip to lower the impact, get to the root cause, and ask as many questions about it as you possibly can. Risk monitoring assists in executing the response plan as planned. It also ensures any new risks are accounted for and the existing ones are kept under control.

6. Estimation

Once you’ve figured out the impact and likelihood of the risks in question, you need to estimate how much it’s going to cost you to get rid of them.

If you take an example of a delayed concert gig due to the bad health of a performer, you need to estimate how much it’s going to cost you to get him better before the concert or get a backup. Whichever option is cost-effective and overall positive for the project, has to be picked.

Check out the best risk management software:

The Best Risk Management Software of 2022

7. Assign Owners

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Monitoring and getting rid of risks is a hard process and you need to assign owners to these processes so that they can be properly looked at and dealt with. This owner should be the person that is the best suited for monitoring the risk and competent enough to fix it before it damages the project.

These owners need to collaborate with the appropriate teams to devise a strategy and get rid of the assigned risks. Not every identified risk will require an owner. Your organization could have thousands of risks identified through a bottoms-up approach, assigning an owner for each of the risks will make the tasks more achievable and doable. 

8. Regularly Review the Risks

As a manager or a member of the risk management team, you need to set aside a portion of time every week to review the risks. This review contains a thorough inspection of the progress being made in the risk management process.

This shows us that the risk management process is not a process that should only be done at the start of the project. It is a recurring process that should only stop when the project is out of the development process and you deliver the final product to the customer.

Even then you need to monitor the expected risks in the maintenance process for the project.

9. Report on Risks

You need to make sure that you submit your whole risk register as a report to all of the stakeholders concerned with the project.

This will enable you to have a strong position when you present the progress report to the top management and also for them to provide their own opinion on how the project development should move forward.

Conclusion

Obviously, the aforementioned steps were just a few of the overall risk management hierarchy. For more details, and future updates, be sure to bookmark this post. We’d also like for you to share your own experiences about curtailing risks at your workplace. Don’t forget to share your thoughts through the comments section below.

In the mentioned article, we talked about the 9 steps of risk assessment and how you can effectively avoid any disruptions coming your way in between your project success. Apply these steps for your project management and hit any risks coming your way beforehand! 

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