Managing Project Risks
A project is any unique endeavor involving a degree of risk. One of the attributes of project itself is the risk associated with it. Risk involved in a project is proportional to the complexity and novelty associated with the project, so the higher the complexity and novelty, the higher the risk.
Because of this any major project should have a contingency plan. It will be a part of risk mitigation. It is the duty of project champion to identify the possible risks both internal as well as external.
It will be possible to some extent to nullify or minimize the internal risk. But external risk is difficult to control. Two most significant parameters that we have to consider are the likelihood of risk
and impact of risk
Likely hood: what probability that the risk may occur.
Impact: what impact the risk once happen could make on the project.
A matrix is formulated between these two to measure the significance of a particular risk.
To identify risk and priorities them one of the most commonly used methodologies is the (Ishikawa Diagram
) . Here for particular risks what are the possible sources are identified and efforts are taken to avoid those sources i.e. treat the cause and not the effect principle is adopted.