Risk Management is difficult – not a natural act for humans to perform!
A recent Harvard Business School study cites that people overestimate their ability to influence events that, in fact, are heavily determined by chance.
We tend to be overconfident about the accuracy of our forecasts and risk assessments and far too narrow in our evaluation of the range of outcomes that may occur.
Detailed risk management is critical to organizations and projects because if risks are left unidentified or are not attended to at the right time, they can result in the ultimate failure of projects.
Risks are incidences, if they occur, they can impact project execution and therefore the success of the entire project. It can be said that risks are threats to the project.
Effectively all items which get categorized as threats can be listed in risks.
You may want to know, how to first start by generating a list of relevant risks for your respective projects.
Simple…. Start with Brainstorming, go ahead with it with as many project teams as possible. And then create a list of items that can affect the project negatively for e.g.
Delay in procurement, teams resigning during the life span of the project, delays in completion, increase in complexity of activities etc.
Once the list is ready, enter it in Project Risk Management Software, which will help you in categorizing them and then deciding on which ones to keep and which ones to discard.
Make sure to run decisions related to risks through stakeholders and senior management. Once they are approved, open risks as assigned to individuals for further action, and the ones that are discarded are recorded as close.
All the above-mentioned activities should be done via Project Risk Management Software, which will help in ensuring no risk-related item detail is lost and all are covered thoroughly and as detailed as possible.
With each project review meeting, risks should also be reviewed every time.
The latest status and activities on risks should be updated in the project.
Project risks can be categorized in probability high & low, Impact high and low categories to map them for further analysis.
High risks with probabilities of occurrence and impact of risk occurrence clearly indicate that the project is risky and requires immediate attention.
One can create a risk register by capturing risks at various enterprise functional units using Risk Management Software. Once added to the risk register, the risks are further assessed and assigned respective severity & probability.
A mitigation plan can be created and action items can be assigned to different team members. All this can only be achieved if Project Risk Management Software is implemented.
It is unimaginable to believe that it can be achieved with paper and pen or an excel sheet. Much more sophisticated software’s needed to achieve such functionalities.
In fact, going manual and not implementing software for automation is in itself a big risk to take.
It can be assured that at the start itself project has taken risks by not going the automated route and taking the manual and more difficult route.
The probability of success of manually monitored projects is questionable.
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