PROJECT RISK MANAGEMENT
By Steve Simmonds
 
The benefits of risk management in projects are huge. The result will be that you minimise the impact of project threats and seize the opportunities that occur. This allows you to deliver your project on time, on budget and with the quality results your project client demands. Also your team members will be much happier if they do not enter a "fire fighting" mode needed to repair the failures that could have been prevented.
 
There are 10 golden rules for applying risk management successfully in your project.
 
Rule 1: Make Risk Management Part of Your Project
 
The first rule is essential to the success of project risk management. If you don't truly embed risk management in your project, you cannot reap the full benefits of this approach. Some projects use no approach whatsoever to risk management. They are either ignorant, running their first project or they are somehow confident that no risks will occur in their project (which of course will happen). Some people blindly trust the project manager. Professional companies make risk management part of their day to day operations and include it in project meetings and the training of staff.
 
Rule 2: Identify Risks Early in Your Project
 
The first step in project risk management is to identify the risks that are present in your project. This requires an open mind set that focuses on future scenarios that may occur. Two main sources exist to identify risks, people and paper. People are your team members that each bring along their personal experiences and expertise. Other people to talk to are experts outside your project that have a track record with the type of project or work you are facing. They can reveal some booby traps you will encounter or some golden opportunities that may not have crossed your mind. Interviews and team sessions (risk brainstorming) are the common methods to discover the risks people know. Paper is a different story. Projects tend to generate a significant number of (electronic) documents that contain project risks. The project plan, business case and resource planning are good starters. Other categories are old project plans, your company Intranet and specialised websites.
 
Are you able to identify all project risks before they occur? Probably not. However if you combine a number of different identification methods, you are likely to find the large majority. If you deal with them properly, you have enough time left for the unexpected risks that take place.
 
Rule 3: Communicate About Risks
 
Failed projects show that project managers in such projects were frequently unaware of the big hammer that was about to hit them. The frightening finding was that frequently someone of the project organisation actually did see that hammer, but didn't inform the project manager of its existence. If you don't want this to happen in your project, you better pay attention to risk communication.