Saturday 4 December 2021

Understand risk management for Projects

In many projects, risks are identified and analyzed in an uncertain, random order. Often this is fatal for the entire project, as unexpected risks may appear. Such risks can arise when, instead of planning and being prepared to defend posed aces on them in one form or another, these risks have not been addressed and there has been no willingness to deal with them in emergency cases.

At an early stage of preparation and planning, it is very important to identify, classify and assess potential risks. Instead of looking at each risk individually and randomly, it is much more effective to identify risks and then group them into categories, or to make a list of categories and then try to identify potential risks that may belong to each of them. 


Thus, common sources of influence, factors, causes, potential effect and prevention, as well as corrective actions can be discussed and agreed in advance.

Risk classification is the systematic identification of risks and providing a basis for their awareness, understanding and action against them. Each project will have its own structure and differences, but there are some categories that are common to many projects (to which you can add your local, sectoral, or project categories).

I won't go into detail here, but your project team and sponsors should be aware of these categories, and you should use their help in the risk consideration process. For example, with regard to "operational resources," your team can discuss issues such as availability, timing, costs, opportunities, necessary conditions for operations (i.e., land, weather, light).

Regarding stakeholder resources, your team can identify all participants and stakeholders and list all the potential risks that these participants may pose, such as poor publicity of media sources, delays caused by the actions of community groups or environmentalists, or delays caused by utilities, problems with trade unions.

The risks involved and potential actions should then be documented in a risk management plan and then discussed at all key stages of the project's life. All details and the actual actions taken, as well as their results, should be recorded and revised throughout the closing and review phases in order to use the lessons learned in future projects.

And here's the question that many project managers ask themselves: "How do we know if we can handle the risk if it occurs?" Unfortunately, most often no assessment is made in order to determine the experience, professionalism, capabilities of the team, individuals, organizations that are necessary to manage risk in the event of its occurrence.

Thus, in the event that risk does appear, then the team will certainly not be able to effectively cope with it, even if it was previously predicted that the risk could be resolved. This is often the case when the team planning the project is not the team that manages the project, or/or when key individuals in the initial project team leave it throughout the project and are replaced by others with different skills, experiences and capabilities.

The moral is that establishing an appropriate level of risk tolerance is quite a dangerous business. Each potential risk should be carefully, rigorously and carefully analyzed, and the project team, supporting teams and individuals, organizations involved in project management – all should be considered for the availability and ability to successfully manage the risk in the event of its occurrence.

If gaps in opportunities have been identified, then some corrective action should be taken. During the project, this capability should be continuously monitored and, if necessary, action should be taken to return the degree of risk tolerance to the proper level.

Conflict over resources often occurs during the middle and final stages of a project because there are often new, other requirements that have high priorities. This can lead to the fact that the resources allocated to the project will be selected, reduced in quantity or quality, and, of course, to the detriment of the project.

The answer to this dilemma is not so easy to find, but, in essence, the team managing the project should include the item "conflict over resources during the life cycle of the project" as the main potential risk and be prepared for it accordingly, by settling contracts and then constantly monitoring the situation. If a conflict arises, the project leader and/or the client step in and need to ensure that the allocated resources are not selected.

Based on all the issues we have already discussed here, there is also the question of who should be responsible for assessing and managing risks. Often, the responsibility for identifying, assessing, and managing risk falls on the project team, especially when it has already started working on a project.

But there are other individuals and groups, including some external stakeholders, who must constantly monitor certain activities and report regularly to the project team leader. These observation teams are easy to identify—they include clients, sponsors, key specialists in the project team organization, or organization, and the main external participants can be emergency services, local authorities, and contractors.

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