The benefits of project risk management are huge. Effective quantitative risk management is an essential component to delivering projects successfully—on time, within budget, and with high-quality results. By following these guidelines, you are one step closer to mitigating risks and managing a successful project.
1. Identify Risks Early
The first step is to identify the risks present. This involves focusing on the various scenarios that may occur and developing a plan of action. Consult the project plan, and Safran Risk, to establish risks associated with project schedule and cost. By recognizing the potential impact of these risks early, you are equipping the project team with the right information and potential scenarios to make an informed decision sooner, thus providing greater impact to future project performance.
2. Communicate, communicate, communicate
All too often we see failed projects occur because project managers were unaware of the approaching risks. Known risks should be continuously evaluated and brought to the forefront as a standard topic for team meetings. Open communication ensures the project manager has the best, and most recent, information at all times.
3. Project Risks vs. Project Opportunities
Project risks have a negative connotation and at times overwhelm the project opportunities. Make sure to create time to handle the project opportunities. There are often a few opportunities with a high benefit, that don’t require a big investment in time or resources. Place a few minutes to focus on these and create an environment where both risks & opportunities are considered appropriately. One opportunity example could be “buying down risk” at a fraction of its potential cost if left alone.
4. Analyze and Prioritize—Then Again
As risks are identified, a team must decide how to prioritize them. Treating all risks equally doesn’t deliver the best possible results. Risks have different levels of impact, so it’s important to focus on risks that can cause the biggest losses and gains. As risks pass through the project hierarchy, risks may be re-prioritized based on each level. Risk analysis allows project and risk managers prioritize where time and resources are better spent.
5. Risk Management Software
Managing risks is a task completed throughout the project life-cycle. Unfortunately, a lot of project teams struggle to finish successfully and are overloaded with tasks to be completed quickly. Connecting activities to the risk analysis helps project managers understand what is most important, and managing risks helps to focus on the current situation of risks and project goals. Safran Risk answers the often-unidentifiable questions—Has the relevant importance of a risk or goal changed? Is the data provided up to date and accurate? Safran Risk provides an avenue for project and risk managers to identify, assess and prioritize risks based on real-time data and project budget/schedule constraints.
The five guidelines presented here are based on our years of experience with project and risk management, and our desire to help organizations complete projects successfully. Are there any guidelines you would add? How has Risk Management Software assisted you in successful project completion?