The Unconventional Guide for Project Risk Management

Two million dollars were at stake.
Campton College wanted to upgrade their call accounting system that was in place since the 1990s. The new system would manage all accounting information for their medical school, including billing, tuition, and expenses. It wasn’t easy to switch to a new product. To assess the potential risks and threats that could arise from switching bank information, they hired a risk assessment team. The college could be liable for $2 million, according to them.
Jean Scheid, Bright Hub Project Management, stated that the risk assessment team was able identify 14 different risks and provide solutions to those risks. This reduced the forecasted 249% risk to only 54.3%. The college was able reduce the risk percentage through secure processes and introduced a new system.
The college was able slowly to transfer their assets and was able protect their information from malicious attacks.
It would be so easy for project managers to manage their risk management processes smoothly.

But they can! They can!
Info-Tech Research Group found that organizations that use a formalized approach to risk management are 53% more likely than those who use an “ad hoc” approach to management.
Below are the steps that every business must take to reduce project risk.
1. Identify your pain points

There have never been projects without risk. Examples include project delays or failures due to budget overruns, leakage of sensitive information, improperly assigning tasks, and improperly assigning work. Risk management is all about identifying potential risks.
Project Management Times is a great resource for identifying common risks. These include:
Before you start the project, make sure to identify the risks that are most likely to occur and the most likely to have a negative impact on the project.
2. Assess the severity of each risk

Next, risk management involves identifying the potential risks that could affect the project. This chart is used by many government IT programs (this particular example was taken from an Old Dominion University document).

When assessing your risk, make sure you consider the following:Naturally, every project management office will have its own classification, but breaking down risk levels helps determine how much time each project should be given. Your risks should be categorized according to their probability and potential impact. You should balance quantitative and qualitative measures of risk using hard numbers such as cost, resources, labor, and time. Reach out to your stakeholders and use project management software for help identifying hidden problems.
3. Plan contingency and mitigation strategies

Once all the possible risks have been identified and documented, create contingency plans. This will reduce stress when a negative event occurs. Each possible risk should be addressed. Project managers should assess the likelihood and severity of each risk. Then, they should create a plan to prevent the most severe risks. The Office of the Assistant Secretary to Preparedness and Response has provided some examples of mitigation strategies:
This is just a small overview of the ways project managers can plan for and manage risk. I’m sure there are many more. What can you do? What did you miss? Please share your thoughts with us!
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