Process #1: Plan How to Manage RisksĪs with everything in project management, risk management starts with planning. So, you need to balance your efforts with the benefits of overcoming risks. Risk management is not free of charge. It requires the involvement of the whole team and stakeholders. The primary consideration is the costs of your efforts. However, in the long run, you need to tailor your risk management approach for the given project. You can add or remove tools and techniques in each process. Notice that each step of the framework is a separate process, all of which will be discussed in detail in the related articles.Īdditionally, keep in mind that it’s just a framework. What are the 7 Risk Management Processesīelow is a quick overview of the risk management framework. “Probability” is the likelihood of a risk or opportunity happening.Īgain, it can be qualitative (low, medium, high) or quantitative (a percentage).Ī “risk response” or “risk response plan” details the action you will take to avoid or mitigate risk. ![]() For example, a risk may impact quality, team motivation, resources, and staffing all at once. Risks will appear in all aspects of project management and may have a complex impact. We can also describe the impact as a monetary value of a risk like $2,450 or as a delay of four calendar days or both at once.īut don’t limit yourself only to project costs or duration. We can assess a risk’s impact qualitatively as low, medium, or high. In general, a risk may impact any aspect of the project. This may change the feasibility, costs, durations, overall risk level, availability of resources, or personnel. The “impact” is the effect of risk or opportunity. As a project manager, you need to try and leverage opportunities as much as avoiding risks. “An uncertain event or condition, that if it occurs, has a positive or negative effect on a project’s objective.”Ĭonversely, an opportunity is an event or condition that has a positive effect. It gives the following definition of a risk: It gave me inspiration, so credit where it’s due to the PMI. The PMBOK Guide describes a simple framework for risk management. That’s why in simple terms, Risk Management is your effort in identifying and tackling project risks. Please note that the risk management process, framework, and approach mean the same things. Moreover, organizations often develop their own approaches to risk management that you need to follow. Instead, you need to select tools, techniques, and processes for each project individually. There is no such thing as a universal risk management process. So, let’s dive in! Short Glossary of Project Risk Management You can find links to other articles that explain each process and tool in more detail. ![]() You’ll get the whole risk management process below. ![]() It’s a combination of processes and tools a project manager applies to discover threats and opportunities that may impact a project. Risk management process is a structured approach to identifying, assessing, addressing, and controlling risks. Therefore, I spent lots of time and effort creating a practical risk management process. Risk management is arguably the most crucial piece in my project management approach. I’ve been managing software development projects for more than 11 years.
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