Risk Management: Strategies and Mitigation in Projects

Concept of Risk

Risk is inherent in any activity. Every event is influenced by past actions, creating future opportunities or challenges. Change involves risk and uncertainty.

Risk Strategies

Reactive Strategies

These involve evaluating the consequences of a risk after it has occurred and acting accordingly. However, this can lead to crises and put projects at risk.

Proactive Strategies

• Systematic risk assessment
• Planning for risk avoidance and minimization
• Developing contingency plans

Proactive strategies reduce reaction time and demonstrate preparedness.

Risk Categories

• Generic Risks: Common to all projects.
• Specific Risks: Require in-depth project knowledge.

Project Risk Areas

Project Costs

Includes increased organizational costs and budget overruns.

Technical Risks

Relate to the technical aspects of the project.

Business Risks

Involve market factors, sales strategies, management, and budget.

Production Process Risks

Ensured by standardization, monitoring, written methodologies, trained staff, and adherence to global standards.

Risk Management and Monitoring (RMM)

• Contingency Planning: Assumes avoidance and monitoring have failed and defines actions to minimize impact.
• Risk Avoidance: Defines strategies to prevent risks and measures to reduce their impact.
• Monitoring: Regularly tracks indicators influencing risk probability.

Development Environment Risks

• Ensuring project management tools are in place.
• Utilizing a central repository or database.
• Having experienced and committed staff with appropriate skills.

Performance, Cost, Maintainability, Planning

These factors define the impact of risk occurrence, including scope, timing, and project milestones.

Risk Estimation

Assessing the severity and impact of risks on the project, including timing and duration.

Security Risks and Hazards

Includes safety and physical hazards, which should be treated as special requests throughout the project lifecycle.