What is project risk management?

For anyone involved in project management, risk management is an essential tool in a project manager’s toolkit. 

But what is risk management? Before we answer this question it is important that we understand what the definition of risk is. We shall then outline very simple risk analysis, risk assessment procedures and risk mitigation strategies which can be applied on all but the largest or most complex projects. Finally we will look at how we can put all these things together into a risk management plan. 

 A risk is anything which can affect the successful outcome of your project. For example, suppose you have a project whose aim is to develop and bring to market a new product prior to any similar product. A competitor bringing out their product to market before yours might therefore be identified as a risk which will affect your ability to sell your own product. 

In such circumstances you might decide to avoid this risk by cutting the time to market of your own product perhaps by reducing the features of the product. In this way you can preserve your first to market approach and so gain your expected market share. 

 This process of identifying a risk, assessing its impact on your project and then deciding on a strategy to avoid or minimise the risk is what is known as risk management. 

 In the next post, we shall look into these risk management procedures in more detail. You can learn more about risk management and learn how to write a project risk management plan by attending any PRINCE2 training course in London, UK.



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