Join Bob McGannon for an in-depth discussion in this video Understanding risks, part of Project Management Foundations: Risk.
Projects deal with change, and dealing with change is risky business. Researches shown that numerous project managers are [not] prepared nor appropriately managed risk. Are you ready to manage the risk that can plague your project and potentially your business as well? When I talk about risk, I'm talking about things that haven't happened yet. There's a probability of some sort of event occurring that'll have an impact on your project. This impact could be positive when things go right, or it could be negative when they go wrong.
With the significance of risk management in mind, let's look at the two major categories for risk, positive and negative risk. Positive risks are often called opportunities, and they still need to be managed. While we're not going to focus on opportunities, the logic and the process of dealing with them is the same as for negative risks. It's just that their are typically more instances of negative things happening in projects that have to managed. So, we'll focus on negative risks.
Negative risks are events that could cause your project to be thrown off course. So, it's vital that you pay attention to them. Whether you are dealing with positive or negative risks, there are standard series of steps to follow when managing risks. First, you need to identify the risks on your project. When you see something that will probably happen, you should take action ahead of time, before the impacts are felt in your project. Be proactive rather than being reactive, to appropriately determine when to take action.
You need to take the second standard step for risk management and asses the likelihood of a risk happening, and determine which risks you will address. Addressing risk means taking action. Determining the actions to take is step three. Investigating alternatives to steer your project through the least bumpy section of the road. You might try to smooth out part of the road for a more comfortable ride. Using either alternative, the idea for you is a project manager is to control how much your projects are exposed by risk.
The last step in the management process is to control risk on an ongoing basis. This is important to do, because risk change over time. So, you should constantly assess your project for the likelihood of a risk happening, and it's potential impact. Understanding the consequences of any risk will help you manage it. The last thing you want is for a risk to effect deliverable's, your budget, or your quality standards when you could have addressed it proactively.
As I help you examine risk in this course, keep in mind that managing risk doesn't mean playing it safe at all costs. Any sort of change comes with a level of risk. It's how you manage it that makes all the difference, which is why I will help you asses approaches to deal with risks as they crop up. If you don't, they can literally create havoc on your projects. Ultimately, project management is risk management. Managing risk shows that you're aware of your challenges, and you've considered your options.
By clearly understanding your risk in the scheme of what you're trying to achieve, your project has a greater chance of being delivered successfully.
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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.