Project Management how to Create a Risk Assessment

(542 Words)
In business, all projects carry risk. Even seemingly infallible projects can be plagued by problems with drastic consequences. It is important to conduct a risk assessment for every project so that you can evaluate potential risks and do all that you can to prevent them.
The first step in risk assessment is to make a list of all of the potential problems that can occur. Every single risk no matter how unlikely should be identified. Of course, unexpected problems that could never be predicted can still occur, but the more thorough you can be, the more likely you will be able to successful prevent and/or counter the threat.
First, project managers should consider the most common risks that occur. Budget is one of them. Project after project goes over-budget, and this can cast a fatal blow to a project. Specific areas where the risk of budget problems are amplified should be identified.
Another common problem within projects is the schedule. Clients and customers may impose strict penalties should your company not deliver on its promised time. Areas that can cause delays should be identified and steps taken to lower the possibility of these occurring. Consider the weather or outside groups. Your company may choose to build in extra time or have extra availabilities of workers to compensate should a problem occur.
All of the stakeholders and contributors must be considered when conducting a risk assessment. Consider what could go wrong with each person who will play a part in the project’s creation. What will happen if that person does not follow through? For instance, what happens if a vendor cannot supply the materials he or she promised? Come up with a plan for each.
A risk assessment does not have to be from one person. Various people can give their input into the assessment. With more knowledgeable people brainstorming about potential risks, more will be identified.
There is still work to be done once the risks are identified. One should measure the potential outcome of each. The company should understand how it can impact the project or even the company as a whole. You may rank risks according to their importance and how vital it is that they are swiftly countered.
Methods should be constructed in how to prevent risks. For instance, the company may want to build some extra money into the project so that it can still be lucrative if the budget is exceeded. Choose vendors that are trustworthy.
It is important to decide on methods to counters risks that come to life. For instance, consider the risk that a vendor does not deliver. You may want to have a backup already planned so that a quick and smooth transition can be made and the schedule can be relatively uninterrupted.
A risk assessment does not end until the project does. It is important for the risks to be constantly tracked so that it is immediately apparent whether any of the risks have come to fruition. If additional risks are identified, they should be added.
Problems can occur in even the most well planned projects. Knowing about the risks can help companies prevent, catch and successfully counter them. A thorough risk assessment can help provide this vital information.
Resources:
http://www.projectsmart.co.uk/project-management-risk-management.html
http://www.netcomuk.co.uk/~rtusler/project/riskasse.html