Inherent Risk
This is also known as Business risk, and is the type of risk that could affect the business as a whole. Depending on your type and structure of organisation this risk will be different. For example a highly fragmented business has a greater risk of poor communication being a damaging factor in a project’s potential for success.
Specific Risk
This is also known as Project risk, and is the risk associated specifically with your project. Again, this type of risk in unavoidable and every project will be subject to an element of Specific Risk. Nevertheless, many of these risks can be influenced and mitigated against by the prudent actions of the project manager, such as the selection of collective skills of the employees chosen to work on the project.
Stage Risk
This is the risk associated with the particular task in hand during a certain phase of the project plan. For example, in a large urban building project, there may be risk in one phase that you have problems with logistics whereby delivery trucks need to arrive on time and in sequence in order to facilitate the overall workflow.
This is the risk associated with the particular task in hand during a certain phase of the project plan. For example, in a large urban building project, there may be risk in one phase that you have problems with logistics whereby delivery trucks need to arrive on time and in sequence in order to facilitate the overall workflow.
Planning for risks
To keep on top of all these potential risks it’s a very good idea to have a formal plan of all the potential risks you could encounter. This is commonly referred to as a Risk Register. Risks may be difficult to spot, and so you should ask for the input of everyone involved with this particular project. In fact, it is often members of the project team at lower levels of the organisation that may be able to identify smaller, yet still significant potential issues as they are likely to have a greater working knowledge of the potential end product than the managers or other senior employees. A series of formal, and informal, workshops might be a good way to get other peoples opinions.
To keep on top of all these potential risks it’s a very good idea to have a formal plan of all the potential risks you could encounter. This is commonly referred to as a Risk Register. Risks may be difficult to spot, and so you should ask for the input of everyone involved with this particular project. In fact, it is often members of the project team at lower levels of the organisation that may be able to identify smaller, yet still significant potential issues as they are likely to have a greater working knowledge of the potential end product than the managers or other senior employees. A series of formal, and informal, workshops might be a good way to get other peoples opinions.
Assess the Risks
Once you have identified the panoply of potential risks, you must then assess each of the risks to try and work out how likely it is to happen and what the impact of the realisation of the risk is likely to be.
The easiest way to do this is simply give your risks a score of 1-10 depending on how severe and how likely it is to happen. These scores can help you to spot the important risks that you need to keep an eye on. However, the traffic light system is another commonly used risk identifier, which has the benefit of providing a good project risk overview at a glance.
Once you have identified the panoply of potential risks, you must then assess each of the risks to try and work out how likely it is to happen and what the impact of the realisation of the risk is likely to be.
The easiest way to do this is simply give your risks a score of 1-10 depending on how severe and how likely it is to happen. These scores can help you to spot the important risks that you need to keep an eye on. However, the traffic light system is another commonly used risk identifier, which has the benefit of providing a good project risk overview at a glance.
Risk Prevention and Mitigation
Risk is almost impossible to prevent, but it can me minimised and mitigated against. As such, you must continually assess the importance of specific risks, as during different phases of the project the likelihood of each risk could change.
For every identified risk, you need to come up with a suitable and cost effective counter measure. If, on consideration, it’s possible to completely remove a specific risk by subtly altering the workflow, then this can form a sort of pre-emptive counter action. If it can’t be removed completely then effort should be taken to minimise the subsequent effects of the risk as much as possible.
Risk is almost impossible to prevent, but it can me minimised and mitigated against. As such, you must continually assess the importance of specific risks, as during different phases of the project the likelihood of each risk could change.
For every identified risk, you need to come up with a suitable and cost effective counter measure. If, on consideration, it’s possible to completely remove a specific risk by subtly altering the workflow, then this can form a sort of pre-emptive counter action. If it can’t be removed completely then effort should be taken to minimise the subsequent effects of the risk as much as possible.
Issues
We’ve just spent some time looking at risks, a risk is something that could happen but hasn’t happened yet. An issue however is something that has already happened and is potentially causing a problem. Putting things right in a project when it HAS ALREADY gone wrong is a complex subject and outside the scope of this article, but if it has happened to you, there are many articles, books and journals that will be able to help you in this regard.
We’ve just spent some time looking at risks, a risk is something that could happen but hasn’t happened yet. An issue however is something that has already happened and is potentially causing a problem. Putting things right in a project when it HAS ALREADY gone wrong is a complex subject and outside the scope of this article, but if it has happened to you, there are many articles, books and journals that will be able to help you in this regard.
How to manage Risks and Issues
In conclusion, it’s important to monitor and keep an eye on the effectiveness of risk avoidance measures to find out whether or not they are successful. With careful project management, it should be possible to minimise, even if you can’t eliminate, the impact of virtually any type of risk in a project.
The types of risks that would be in play for an outsourced project would include but not be limited to those mentioned above.
We at Picaso Consulting can support you in managing the risk of your project.
In conclusion, it’s important to monitor and keep an eye on the effectiveness of risk avoidance measures to find out whether or not they are successful. With careful project management, it should be possible to minimise, even if you can’t eliminate, the impact of virtually any type of risk in a project.
The types of risks that would be in play for an outsourced project would include but not be limited to those mentioned above.
We at Picaso Consulting can support you in managing the risk of your project.
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