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Risk Assessment in Project Management
There are many businesses and new ideas growing up since people are stepping into entrepreneurship. Being a successful entrepreneur isn’t about having a great idea, but about running a simple idea in a successful way.
Entrepreneurship is indeed a tough nut to crack. To make any project work successfully, there is a huge chunk of hard work involved.
While working on various stages of a project, from idea generation to product delivery, there might be multiple challenges and risks involved. But in order to get through it smoothly, conducting risk assessment processes proves essential.
However, you must not get confused between Risk Analysis and Risk Assessment. Let’s dive into understanding them both.
What is Risk Assessment?
It’s a technique that is used to carefully scan to identify things that may work out and things that could ruin a project. Through this, one can evaluate if the precautions are taken effectively or should put more effort to prevent damage.
5 Steps of Risk Assessment
Risk Assessment is a 5−step process and all you have to do is −
Identifying the problems
Identifying the people who might be harmed and how
Evaluating the risks and deciding on precautions
Recording the significant findings & implement them
Reviewing and updating as necessary
Let us talk about them one by one.
Identifying the problems
This step is all about analyzing possible risks. It is done at the beginning of the project. You must take some time and explore all the possible outcomes whether it's the good, bad, or worst. Every possibility counts and gets through the best− and worst−case scenarios leaving no stone unturned. Risk identification might demand your attention and time, yet, it is necessary to be managed at the earliest. There can be many ways to do so. Below are a few ways to recognize the problem as soon as possible.
A workplace inspection is a process of critically examining a workplace to recognize risks and ensure that all the standards are fulfilled and the workplace is in fact safe and free of any risks.
Talking to the workforce
This way is pretty generic but effective. Talking to your workforce will help you cover up even the slightest possibility of any risk. When working with different minds, everyone approaches a certain situation in their own way which ultimately leaves you with many possibilities with their solutions.
Examination of Document
It is obvious that before presenting the project idea, a brief is created about it, a sort of document that contains all the details about the project. A project manager can easily analyze and recognize the risks and create a list of them. This way the time consumption in this process is minimum as just one person is working on it because sometimes many cooks can spoil the broth.
This is a mathematical technique to identify the possibility of risk. The procedure is numerical but technically sound. Using it, you can not only prevent risk but can also predict the areas that are prone to future risk. A numerical value to the risk can make it easier to prioritize risks and issues and solve them according to their severity.
Identifying people who can be harmed
An important step in project risk assessment is examining the likelihood that a particular risk will occur. Considering various areas, elements, and people prone to risks can help in identifying the right risk management measures. You can start by rating each element of the risk assessment survey as high, medium, or low probability. This will ensure that you focus your resources on mitigating the risks that are likely to affect your project. Factors also to be considered are −
Young person’s Trainees
New and expectant mothers
While a key member of your team coming down with a nasty case of the flu may not derail your project timeline, if your entire team comes down with the flu, it might be a different matter. Think about what would happen if each risk you identified actually happened. Would this affect your final delivery date? How would this affect the budget? Identify the risks that have a major impact on the outcome of your project. Rate these risks as high impact. Identify remaining risks as medium to low impact.
Consider how likely each hazard is to cause harm, which will determine whether or not you need to do more to reduce the risk.
Sometimes even after taking all the precautions, some risk usually remains and therefore you cannot just get rid of it.
What you have to decide for each significant hazard is whether this remaining risk is high, medium, or low.
For this, we can use the Risk matrix− Risk Level Probability x Severity.
Document the findings
This is called risk response planning. Establish a treatment plan and adjust the highest risks to an acceptable level. Risks can be addressed through mitigation strategies, prevention plans, and contingency plans.
The Risk Assessment may also record such things as −
The number of people affected
The adequacy of existing controls
Any further precautions necessary
Review and update as necessary
Risk management is an ongoing process as conditions change. Regularly review, monitor, and track risks throughout the project. Uncertainty plays a major factor in risk management. By building a process around this uncertainty, you can minimize the risk in your project. With less risk, it increases your chances of achieving your project goals.
Risk Assessment may be required for various changes in the circumstances. To start with, you could review the following −
Changes in materials
Changes in legislation
Changes in processes
Changes in premises
Changes in work patterns
Handling risks is something that plays a vital role in the industry. Also needs to be managed accordingly. Otherwise, the company will have to suffer a really bad downfall.
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