Together these 5 risk management process steps combine to
deliver a simple and effective risk management process.
Step 1: Identify the Risk. You and your team uncover, recognize and describe risks that might affect your project or its outcomes. There are a number of techniques you can use to find project risks. During this step you start to prepare your Project Risk Register.
Step 2: Analyze the risk. Once risks are
identified you determine the likelihood and consequence of each risk. You
develop an understanding of the nature of the risk and its potential to affect
project goals and objectives. This information is also input to your Project
Risk Register.
Step 3: Evaluate or Rank the Risk. You evaluate or
rank the risk by determining the risk magnitude, which is the combination of
likelihood and consequence. You make decisions about whether the risk is
acceptable or whether it is serious enough to warrant treatment. These risk
rankings are also added to your Project Risk Register.
Step 4: Treat the Risk. This is also referred to
as Risk Response Planning. During this step you assess your highest ranked
risks and set out a plan to treat or modify these risks to achieve acceptable
risk levels. How can you minimize the probability of the negative risks as well
as enhancing the opportunities? You create risk mitigation strategies,
preventive plans and contingency plans in this step. And you add the risk
treatment measures for the highest ranking or most serious risks to your
Project Risk Register.
Step 5: Monitor and Review the risk. This is the
step where you take your Project Risk Register and use it to monitor, track and
review risks.
Risk is about uncertainty. If you put a framework around that uncertainty, then you effectively de-risk your project. And that means you can move much more confidently to achieve your project goals. By identifying and managing a comprehensive list of project risks, unpleasant surprises and barriers can be reduced and golden opportunities discovered. The risk management process also helps to resolve problems when they occur, because those problems have been envisaged, and plans to treat them have already been developed and agreed. You avoid impulsive reactions and going into “fire-fighting†mode to rectify problems that could have been anticipated. This makes for happier, less stressed project teams and stakeholders. The end result is that you minimize the impacts of project threats and capture the opportunities that occur.
User questions & answers