Project Management - Basics Methods Tasks: Risk management in 5 steps

projects without risks there is not any. Therefore, it is important for each Projects carry out a risk analysis and establish risk management for the project as early as possible, ideally during the planning phase of the project.

What is the effect of risk management?

Risk management is a very powerful project management tool, which is really easy to use. I am always amazed at the small number of those who answer my question, who is running risk management for my project by my seminar participants. Only individual participants usually register.

That's really a shame, because a study that shows the potential and Significance of project management from the Perspektive of top management, confirmed in the context of their results that Companys, the projects successfully process, attach great importance to their risk management.

The 3 pillars of risk management

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The project business holds a high risk potential. Therefore, risk management is an important task for you as a project manager.

1. Risks are possible events that can jeopardize the achievement of key project objectives (time, scope, budget, quality).
2. Risk management is a continuous process that is carried out during the whole project life cycle.
3. Risk management is the proactive way to avoid problems in the project as far as possible before they occur.

Possible measures for each risk are identified in order to:

• to prevent a risk,
• to reduce the probability of occurrence of the risk or the scope of the effects of an occurrence of the risk,
• with the effects of the risk entered.

3 Steps to Risk Management

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What kind of Measures is defined for the risks is to be defined project-specifically.

1. Identified risks must be monitored regularly to identify changes in the risks themselves, the risk parameters or the necessary measures as early as possible.
2. The implementation of risk management in projects is a key success factor and is started in the early phases of a project. Begin early in the project to identify sources of risk for your project. Risks can be identified from these risk sources and further categorized if necessary.
3. In order to identify possible sources for project risks, all relevant stakeholders should be involved, all processes should be considered and all framework conditions should be considered.

Identify risks in good time

When identifying risks, it is important to ensure that, on the one hand, there are not too many risks, and not too few risks are documented. It has to be considered at every possible risk, whether it is actually a risk or possibly only incidental occurrences in projects.

A typical risk, which is gladly accepted, is the possible illness of employees. This can be a risk if it is an indispensable and difficult to replace key staff. In most cases, however, it is not a particular risk, since short-term employee defaults can generally be offset.

Even if it is practically impossible to describe the effects of the possible risk, you should ask yourself whether it is really a risk. When recording and assessing risks, one must always pay attention to which risks are to be made known to which stakeholders. Good risk management implies clear defined project goals ahead.

Risk management in 5 steps

Possible Strategies for risk management are:

1. Avoid risks
2. Risks or their effects
3. Accept risks
4. Risks
5. Observe the risks

Risk management is usually carried out in five steps:

1. Initiate risk management
2. Identify risks
3. Analyze risks
4. Define measures
5. Monitor the risks

Planning of risk management activities in the project

Another step is the Planning the risk management activities in the project. Plan to reassess risks at regular intervals.

They determine who is actively involved in risk management. Do not forget to plan and take into account the risk management effort.

Information sources

To identify potential risks, you should use all available sources of information. This includes, for example, the project structure plan and the scheduling of your project, project contracts or the Lessons Learned from completed similar projects.

Tip: Always identify risks together with your project team and relevant stakeholders. If you identify the project risks on your own, there is a risk that you will not have an overview of all technical aspects or that other project participants will be able to contribute more or different experiences. Different people tend to have more and better ones ideas.

List project risks

You do not only have to list your project risks during a project meeting draw up. You can also ask all or some of the project staff to inform you of possible risks by email eMail to send. Other sources of identification are your project planning documents, contracts, etc.

You can also create a generic risk list that contains typical project risks. You can also extend the generic risk list over time to include project risks from other completed projects. This provides you with a basis that you can use for the risk analysis of all your projects.

risk identification

The result of the risk identification is a list of possible risks with a risk description.

Example: Generic risk chart

• Co-operation customer
• Know-how customer
• Language
• project communication
• customer Availability
• Conflicts or different interests with the client
• Availability of employee resources
• Underestimated expenditure on implementation
• Dates that can not be moved, for example SEPA conversion
• turnover
• Overloading the project leader

The risks mentioned are collected in the project risk list. In the first step, the risks are not yet assessed. As a result, a number of risks may be taken up which will be removed in the later evaluation because they are redundant, irrelevant or insignificant.

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