“All project management is risk management”
Risk management is an important activity in any project or organization. Risk is defined by M_o_R (risk management, OGC methodology) the uncertainty of the outcome. Risk manager focuses on managing risk (unresolved issues and events) that they were to occur, would affect the product or service organization sets out to deliver.
The M_o_R frame shows the three basic steps to effective risk management that can be applied in the organization or project context:
The first step is risk identification. This includes naming and describing the danger that could affect the objectives, to ensure that there is a common understanding of these risks among all relevant individuals involved in the organization or project tasks.
method to find risks will vary according to the size and structure of the organization, the nature of the activities or projects and experience of risk management team. For example, risk management within a small software organization can include brain-storming and discuss the potential risks of the project, based on the knowledge of developers involved. A large government body, on the other hand, could draw on the experience of professionals who have dealt with the risk of a variety of similar institutions. Project managers responsible for risk management planning could call on the power of experts to highlight relevant risks.
Evaluation is critical to success. Without critical analysis of the risks identified in step one, the risk manager may death underestimate the potential impact of one particular risk, or (also dead) attempt to fight each risk, without considering how likely it is that the risk will occur.
two factors that must be considered in the risk assessment are:
– the potential impact
Individuals responsible for risk management must also be aware of the organization related risks. For example: A risk can have a greater impact on Output 1, but the effect on risk B Output 2. However, if Output 2 is more important than Output 1 to the general objective of the Risk B can be considered more important than the risk.
Ranking risk under immediate, impact and organizational perspective makes risk manager to prioritize and plan how individual risks will be managed.
The risk manager needs to identify appropriate responses to risks and assign risk owners, ensuring that the risk response is carried out, monitored and controlled.