Risk Mitigation Strategies
So, we have now identified the risks to the project. We have analysed the risks and have performed risk assessments for each one to come up with a risk rating. As a consequence of this, we have come up with a prioritised list of risks that we must manage. This post is all about how we then go about devising risk mitigation strategies to help minimise the impact of the risk.
There are several risk management strategies we can employ to manage our risks. We could choose a risk prevention strategy. Risk prevention is where we put in place countermeasures to prevent the risk occurring.
Risk acceptance is another risk management strategy we could employ. In this case, we might decide to tolerate the risk for one of two reasons: either because the impact of the risk is negligible, or because nothing can be done within an acceptable cost to mitigate the risk.
A third risk management strategy is risk transference. In this strategy we decide that the risk management is better done by a third party. An example might be taking out an insurance policy or making a supplier agree to a penalty clause in case of late delivery.
A fourth risk management strategy is risk reduction. In this case we take actions to either limit the impact of the risk to acceptable limits or to reduce the likelihood of the risk occurring.
Finally, the last risk management strategy is risk contingency. This means that we put into place mitigation (or contingency) strategies so that if and when the risk occurs we have ways of dealing with it.
For example, suppose that you identify the following risk: that your staff do not have experience of a particular new technology which is due to be introduced. You identify this as a risk because the technology is complex and your staff might not get up to full speed for a month after the technology is introduced. This will result in productivity losses of £50,000 in the first month.
You might in this case decide to hire trainer to provide a training course for the staff. This is an example of risk reduction strategy where a countermeasure has been planned in order to minimise the likelihood of the risk occurring.
As a project manager you should be always be on the lookout for risks and should be constantly and actively managing these risks.
As a part of a project management course at Knowledge Train, you can learn more about risk management procedures and risk assessment procedures and strategies and learn how to write a project risk management plan. This course is available for onsite delivery on your offices anywhere in the
