What are risk management processes and its steps?

Some expert’s say that a robust risk management processes can reduce problems by 80 or 90 percent over a problem. In combination with a solid project management practice - having well-defined scope, incorporating input from the right stakeholders, following a good change management process, and initiating a communication line - it is important to cut a good risk management process at risk of surprise or unexpected projects. Such a process can help solve problems when changes occur, as those changes are now expected and action has been reviewed and approved, avoiding knee-jerk reactions.

What is risk management process?

Before starting a risk management processes, there must be a solid understanding of some key definitions. Project risks, defined from a PMI point of view, are at their core, unfamiliar events. These events can be positive or negative, making the word "risk" inherently neutral. That said, most of the time and attention is spent dealing with negative project risks or "risks", "positive project risks or opportunities."

Steps of Risk management process

Often, companies that typically undertake risk management processes on specific multi-month projects (longer than 12 months) will identify and manage potential five to ten easily recognized project risks. However, this number should be really high. The projects were initially identified with a high number of risks, awareness of a team that grows to see, so that potential problems are identified in advance and opportunities are more easily seen.

It seems that project risks cannot be managed without removing the actual work of the project. However, this can be accomplished effectively with a four-step risk management process that can be used and modified with each project.

• First step of the risk management processes is to include each person individually in the planning process in a list of at least ten potential risk items. Often with this step, team members assume that some project risks are already known, and therefore do not need to be listed. For example, scope creep is a specific problem on most projects. However, it still has to be listed because even with best practice management processes, it can still happen and cause problems on a project over time. So it should be given attention instead of ignoring it.

• The second step in the risk management process is to collect a list of project risks and compile them into a list, eliminating duplicates.

• The third step of the risk management process are to assess each probability (or probability), impact (or outcome) and identity on the main list. This can be done by assigning everything on the list to a numerical rating like 1 to 4 or subjective words such as high, medium, or low. Discover ability is optional, but it is easy to evaluate - if risk is difficult to see, such as space diffraction, it is a risky item. It is less risky if management support or loss of key resources, such as early capture is easy.

• The fourth step of the risk management process are to subdivide the planning team into subgroups and assign each subgroup a portion of the main list. Each subgroup can then identify triggers for its project risk list. All triggers should be noted, even trivial. There will usually be at least three triggers for each risk.

Instead of starting this risk management processes from scratch for each new project, it can be followed once to establish a list of common project risks and triggers, skipping step three. After that, a team just has to add project-specific project risks and triggers and evaluate the probability, impact, and investigation.