Risk Management Process is Easy Not Simple

23 November 2010

With a risk management process, the path is very easy to follow when a detailed risk management plan has been created before the project’s execution phase has commenced. This is because a detailed analysis of the risks that your project might encounter has already been completed along with their recommendations, if the risk does come in contact with the project.

Evidently, part of the risk management process is to be prepared for any and all possibilities. This can be accomplished with the use of a risk project management template. This type of documents guides the manager through the different steps that are necessary so a well rounded and comprehensive plan can be documented.

The risk management process is one of the most complex and non-intuitive process any project manager must face and develop. This process must include a degree of thinking outside the box. This is the only possible way to list and analyze all possible risks that your project might encounter.

That is the most challenging part of the risk management process, determining all possible risks and then their potential impact. How past projects were affected by the risks that they encountered can be helpful knowledge to obtain. One fact will be noticed, no two projects have exactly the same risks and level of impact, no matter how similar they are in deliverable or structure.

Since no two projects will be the same, no two risk management processes will be mirror images of each other either. It is the risks that are unusual, unorthodoxed or unpredictable that has the greatest chance of doing damage to a project. This is because they were never identified and impact the project without anyone seeing them coming.

To help mitigate these types of risks, part of the risk management process should have a procedure for such types of risks. One of the processes for mitigation of risks is the purchasing of insurance. You cannot have insurance on an unknown. Also, you cannot purchase insurance on a risk that has already impacted your project.

This is why it is so important to have a well thought out risk management process in place before the execution phase of a project commences.