Risk management in project management is the concept of identifying, evaluating and mitigating the project risks that could possibly have an impact on the desired outcome of the project. Typically, it is the role of the project manager to oversee the risk management process from start to finish of a project. Here are some risk management tips for project managers…
Project managers need to follow a risk management process that will help them to understand and identify the threats and opportunities that exist within the project. It is important for a project manager to consider things like risk drawdown (the significant risk for investors when looking at the uptick in the price of shares).
Tools like QSRA (Quantitative Cost Risk Analysis), which is a semi-quantitative tool, can be used by the project team to help them understand any time risks that occur in their project schedule, this understanding can aid in deciding what risks are acceptable and which need better control. QCRA (Quantitative Cost Risk Analysis) is also useful when it comes to estimating approximate levels of cost contingency in order to supplement the estimates for a project and to provide confidence that the allotted budget will not be surpassed.
In risk management, forensic risk is an essential factor to include in an assessment that aims to look at the level of risk that might be posed by an individual and the chances that behaviour may be repeated. There are a number of methods that are used, including planned vs as-built and impact.
With planned vs as-built, this retrospective methodology compares the contract schedule to the as-built schedule this can offer insights into what is happening vs what is supposed to be taking place. Impact, on the other hand, looks to predict any consequences that might occur as a result of a disruption to a business process or function whilst gathering the necessary information to develop strategies for recovery.
One of the most essential risk management tips is that the project manager ensures that at all points during the project, record keeping is completed. This should be regularly updated and referred to when necessary Good record-keeping practices will ensure that the project manager can identify any potential risks, analyse them and evaluate them to ensure that the right steps are being taken.
With teams often spread out over a number of locations, the right document management is also important. Good project management software will provide the project manager with a centralised location to keep all of the project documentation so that it can be accessed by those who are working on the project.
When the project has been completed with the required outcome, the work of a project manager is not complete. The last critical phase in the life cycle of a project is project closure. This is the point where the team review any deliverables and then compares and tests the quality of these to the intended outcome of the project. This is the point where the deliverables are shared with the client of the project.
This can also be a good time for the project team to consider what lessons they might have learnt from the project, where things went particularly well, and where they didn’t. These are lessons that can assist them with their next project.