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Any project is associated with uncertainty and risks. Therefore, one of the main project management processes is project risk management, which is present at all stages of its life cycle. A project risk is an uncertain event or condition that, if it occurs, has a positive or negative impact on at least one of the project objectives, such as timing, cost, content, or quality (Gido, Clements and Baker, 2017). Risk management is a systematic process of reducing uncertainty and managing the likelihood of events in a project.
The entire project risk management process is divided into separate sub-processes that arise in each project, and some of them are implemented at several stages of the project. At the stage of project planning, there is an integrating process of choosing an approach, planning, and performing operations for project risk management. There is also a process of risk identification, showing which risks might affect the project. Further, a qualitative analysis of risks occurs.
It is their arrangement according to the degree of priority for further study or processing by assessing and summing the probability of their occurrence and impact on the project. Quantitative risk analysis involves quantitative analysis of the potential impact of identified risks on the project’s overall objectives. A prerequisite for project risk management is risk response planning, i.e., developing possible options and actions to increase opportunities and reduce threats to achieve project objectives.
A project’s success depends on which strategy or risk response strategies are planned and implemented by the project management team. Planned risk response operations must be appropriate to the severity of the risk, be cost-effective in addressing the problem, be timely, realistic in the context of the project, and be consistent with all stakeholders. Thanks to this, the risks will not create a danger for the project and help the team develop.
Reference
Gido, J., Clements, J., & Baker, R. (2017). Successful project management. Cengage Learning.
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