Risk Management

Risk management

Identifying and evaluating threats to an organization, its operations, and its workforce are known as risk identification and evaluation. For instance, it may entail evaluating potential risks that could interfere with business operations, including natural disasters, accidents, and IT security threats like malware and ransomware. Several steps are involved in identifying risk (“Risk identification: 7 essentials,” 2020). The first step is risk identification, where experts can reveal what, where, when, why, and how an occurrence can affect a project. Second, risk analysis is done to determine the likelihood that a risk event might occur and the possible results of each event. Risk evaluation is then conducted where the experts compare the magnitude of each risk and rank them according to prominence and consequences. For example, experts can identify the consequences that can be faced if malware is launched in their systems. Finally, strategic plans are made based on the estimated value of each risk after the risk’s magnitude has been determined. In order to prevent risks from re-occurring, a continuous monitoring process should continue to ensure that the project is smoothly running and will not be affected by anything.

After identifying the risk, managers develop a mitigation plan to reduce the impact of an unexpected occurrence. According to Saviom solution (2019), developing an effective project plan is one of the ways of risk mitigation. A project plan helps in determining the goals and objectives of the project. Moreover, project managers can create an effective project schedule and allocate resources per the plan. Also, regular communication with clients can help avoid risks in a project. Furthermore, communication helps clarify all aspects of the project with the stakeholders.

Furthermore, communication keeps the project manager informed about the stakeholders’ requirements avoiding hiccups within the project. Additionally, project managers should document every important activity to ensure no confusion among team members. Confusion often leads to conflicts, and it can disrupt the project.

Complexity in project management is measured using (Clements et al., 2016) the Darnall-Preston Complexity Index (DCPI). Projects with a high score in the external complexity in the DCPI are large and longer than usual for the project managers and the project management group, and the available resources are lacking. In addition, due to the lack of experience in the project size, unknown risks are significant. On the other hand, internal complexity is involved with risks in the budget, schedule, and quality due to organizational complexity and scope changes due to lack of clarity in project and scope statements. 

References

Clements, G., Drysdale, J., Francis, J., Harrison, B., Rino, J., Robinson, J., & Snyder, A. (2016). 11.4 project risk and the project complexity profile – Project management for instructional designers. Project Management for Instructional Designers – Simple Book Production. https://pm4id.org/chapter/11-4-project-risk-and-the-project-complexity-profile/

Risk identification: 7 essentials. (2020, June 11). EKU Online. https://safetymanagement.eku.edu/blog/risk-identification/#:~:text=%20Risk%20Identification%20Process%20Steps%20%201%20Risk,risk%20and%20ranks%20them%20according%20to...%20More%20

Saviom solution. (2019, March 6). 10 Common IT Project Risks: Ways to Mitigate Them. Saviom. https://www.saviom.com/blog/10-common-it-project-risks-ways-to-mitigate-them-2/