Project without risk is a myth. All project contents risk factors and these risk factors come into existence due to uncertainties. There is always a possibility that something might go wrong or some unknown factor could impact the project objectives. Therefore the technique of managing risks plays an important role in project management. Risk management is a process of identifying the risks, getting prepared for it and with the help of it concluding the project with result oriented ending.
Identification of potential risks in advance gives you a benefit to get prepared for it. It makes you draw an effective plan to mitigate or avoid these upcoming risks and helps you run the project smoothly. This process gives your project sponsors and stakeholders an assurance that the project will meet the set expectations giving them positive outcomes.
It prepares you and your team to face and overthrow the risk effectively.
- Helps you Plan
Planning is an essential part of risk management. It helps to identify the list of potential risks, their probability of occurrence, their impact on the project and strategy to tackle these risks. This plan assists in drawing project estimation to decide project cost, time and schedule.
Due to it, the project manager is able to identify internal and external risk factors that may hinder a project and further makes a strategy to avoid and mitigate them.
- Accelerate Results
Risk management process helps you eliminate the hurdles that enable you to complete the project on time. This makes you meet your deadline and targeted objectives. If you do not apply risk management strategies to your project then your project gets exposed to a number of unpredictable problems and it becomes vulnerable to further manage it. By managing risks on time, helps you to maximize profits and minimize expenses on tasks that have no ROI.
As it is said, ‘Stitch in time saves nine’. Identification of risk factors and addressing them on proper time helps you accelerate positive results.
Once the risk factors are identified, they are then prioritized, as per their strengths and impacts they could cast on the project. They are then classified as Major, Moderate and Minor risk factors. The major risks are first tackled followed by Moderate and then Minor Risks.