Join Bob McGannon for an in-depth discussion in this video Categorizing and consolidating risks, part of Project Management Foundations: Risk.
There is benefit to having a large number of risks, identified for your project, but managing an extensive number of risks, can be awkward and cumbersome. With lots of groceries, it is good to sort things out. Place items in separate bags for the freezer, fridge, and pantry. Be organized when you get home. The same pertains to risks on your project. How will you ensure your risks are well organized, so you can manage them? Categorizing risks for your project is a great way to ensure you are well organized.
Let me share some typical ways to categorize risks, and some tips for using those categories wisely. My first suggestion for categorizing risks is by looking at the triple constraints of time, scope, and costs, as well as quality and resources. Look at how your risks may impact your project, and identify any budget, schedule, personnel, and requirements risks. Try to find any risks that have some common causes. For example, one common area for risks might be that you don't have enough people, or you lack people with the relevant skills.
You could have a substantial list of risks, but in many cases, they may all tie back to this category of people and skills. A second way to categorize risks is by business areas, such as external market risks, or shifts in business strategy. This can be very helpful, when you are dealing with your client, and the risks they may bring to the project. Taking this approach can enhance the perception, that you are managing the project with your client, and their needs in mind.
It can also help engage your client, to ensure you manage their risks appropriately. A third way to categorize risks is by technical topics. These might include design and development problems, testing and maintenance risks, and technical uncertainty. Or, you can use technical product risks, such as a requirement potentially being too complex, or other risks, such as managing external vendors. Fourth, you can utilize an integration risks category.
Integration risks surface when you are working on your project, and there are many other things happening in the organization. If you have nine other projects targeting a particular business area, this might signal a need to address integration risks. When solutions need to be brought together. As all the changes brought about by these projects may need to be coordinated, significant risks could surface. This is a risk topic that is often overlooked by project managers. Although these are common risk categories, you might find others are more useful on the specific projects you manage.
No matter the categories you use, here are a few tips for managing risks with risk categories. First, don't hesitate to revise your risk categories if it's helpful. As the project progresses, you learn more about the risks that are substantial. As a result, more relevant categories may surface. Some risks may blend into other categories, depending on the stages in your project, so keep your eye on the ball. Continue to identify risk and risk categories as the project unfolds.
You can do this as your regular team or status meetings. My second tip is this, keep your list of categories short and simple. Try to avoid a multitude of categories, so you and your team don't have a hard time keeping them all contained. Lastly, be as succinct as you can when assigning risk categories. Package the risks, so there's a common relevance across different areas of the project that you, your project team, and other stakeholders, easily understand.
Using well crafted risk categories can help you manage your project risks more easily, but it also helps your stakeholders to see the risks for what they are, and helps you make better decisions to address them.
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- Incorporating risk management into your project
- Identifying risk
- Categorizing risks
- Performing qualitative and quantitative risk analysis
- Building a risk-response plan
- Deciding when to execute a risk-response plan<br><br>
- The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.