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3 Steps To Successful Risk Management

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Every project, whatever its size or complexity, carries with it a degree of uncertainty. Successful project managers understand this. They anticipate potential threats and have plans in place to manage any risks, should they occur.

Risk management requires a high level of project management skills and it is one of the areas that many project managers find the most challenging. Good project management training and project management courses cover the essential skills that will support project managers to achieve all of their project’s objectives, whilst managing any risks.

In order to manage potential threats effectively, project managers need to have a full and complete understanding of the project that they are working on, as well as the internal and external factors that could derail it. They also need to be competent with all the best project management software tools and have robust contingency plans to minimise the effects of risk if they become a reality.

Read our 3 steps to successful risk management below for more insights into how to ensure that perceived threats do not impact on the success of your projects:-

  1. Identify the risks

The first step in any risk management strategy is to identify the potential threats and risks to a project. It is only by developing an awareness of what could happen that you stand any chance of doing something about it. There are two main areas to look at when identifying risks and these are the internal and external factors that may have an effect on the project. Internal factors include the project management team, company culture, management of change and budget, allocation of resources etc. External factors include anything outside the organisation that could impact on the project,  such as the economy, clients, sub-contractors and service providers.

  1. Assess the risks

Once you know what the potential threats are, the next stage is to assess the likelihood of these risks occurring. This requires a degree of analytical and numerical skill as you weigh up the size of the potential risk and the extent that it could affect the project and its timeline. Some risks are negligible and can be virtually ignored but others are significant and need to scrutinised closely. The consequences of any hazard, threat or risk need to be considered fully before you can move on the final stage of risk management.

  1. Manage the risks

Identifying and assessing the risks are obviously important, but effectively managing threats is vital. Good project risk management is all about having tight contingency plans in place for when risks actually occur. Without a solid plan your project can easily be pulled off course and not meet its deadlines or may go over budget. In the worst case scenario, lack of planning can bring a halt to the whole project, causing far reaching knock-on effects for the whole organisation and causing embarrassment for all concerned. To avoid these situations it is imperative that you use outstanding IT project management tools to support your risk management efforts.

Author: Mike Savage is the Project Management Practice Manager at leading training consultants, Thales Training & Consultancy. Mike manages the PM training business, including PRINCE2® and APM accreditations. He is a Registered PRINCE2® practitioner and a full member of the APM and PMI. He has been training and mentoring project managers and team members of all levels for the last 15 years.

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