Why do Risk Management?

The purpose of risk management is to:

     Identify possible risks.

     Reduce or allocate risks.

     Provide a rational basis for better decision making in regards to all risks.

     Plan.

Assessing and managing risks is the best weapon you have against project catastrophes. By evaluating your plan for potential problems and developing strategies to address them, you'll improve your chances of a successful, if not perfect, project.

Additionally, continuous risk management will:

  Ensure that high priority risks are aggressively managed and that all risks are cost- effectively managed throughout the project.

  Provide management at all levels with the information required to make informed decisions on issues critical to project success.

If you don't actively attack risks, they will actively attack you!! How to do Risk Management

First we need to look at the various sources of risks. There are many sources and this list is not meant to be inclusive, but rather, a guide for the initial brainstorming of all risks. By referencing this list, it helps the team determine all possible sources of risk.

Various sources of risk include:

Project Management

o Top management not recognizing this activity as a project

o Too many projects going on at one time

o Impossible schedule commitments

o No functional input into the planning phase

o No one person responsible for the total project

o Poor control of design changes

o Problems with team members.

o Poor control of customer changes

o Poor understanding of the project manager's job

o Wrong person assigned as project manager

o No integrated planning and control

o Organization's resources are overcommitted

o Unrealistic planning and scheduling

o No project cost accounting ability

o Conflicting project priorities

o Poorly organized project office