Project Risk Management

What Is Risk Management?

Research project, just like any other projects need to be calculative and critically assessed in terms of risk in other to achieve the expected output. Risk Management is the process of identifying, analyzing and responding to risk factors throughout the life of a project and in the best interests of its objectives. Proper risk management implies control of possible future events and is proactive rather than reactive.

Risk Response

Risk Response generally includes:

• Avoidance- eliminating a specific threat, usually by eliminating the cause.
• Mitigation - reducing the expected monetary value of a risk event by reducing the probability of occurrence.
• Acceptance- accepting the consequences of the risk. This is often accomplished by developing a contingency plan to execute should the risk event occur.
• Identify possible risks.
• Reduce or allocate risks.
• Provide a rational basis for better decision making in regards to all risks

Why do Risk Management?

The purpose of risk management is to:

The Risk Analysis Process

The Risk Analysis Process is essentially a quality problem solving process. Quality and assessment tools are used to determine and prioritize risks for assessment and resolution.

The risk analysis process is as follows:

                        This step is brainstorming. Reviewing the lists of possible risk sources as well as the project team's experiences and knowledge, all potential risks are identified.

                        Using an assessment instrument, risks are then categorized and prioritized. The number of risks identified usually exceeds the time capacity of the project team to analyze and develop contingencies. The process of prioritization helps them to manage those risks that have both a high impact and a high probability of occurrence.

• Assess the Risk

                        Traditional problem solving often moves from problem identification to problem solution. However, before trying to determine how best to manage risks, the project team must identify the root causes of the identified risks.

                        The project team asks questions including:

                                          What would cause this risk?

                                          How will this risk impact the project?

• Develop Responses to the Risk

                        Now the project team is ready to begin the process of assessing possible remedies to manage the risk or possibly, prevent the risk from occurring. Questions the team will ask include:

                                          What can be done to reduce the likelihood of this risk?

                                          What can be done to manage the risk, should it occur?

• Develop a Contingency Plan or Preventative Measures for the Risk

                        The project team will convert into tasks, those ideas that were identified to reduce or eliminate risk likelihood.

                        Those tasks identified to manage the risk, should it occur, are developed into short contingency plans that can be put aside. Should the risk occur, they can be brought forward and quickly put into action, thereby reducing the need to manage the risk by crisis.