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How to prepare for a Project Risk

August 24 2010

In every business project, risk is involved. Being properly prepared for their impact can be the difference in a project staying on course or faltering into overruns and delays.

To help prevent or minimize a project risk, there are certain things a manager can do. The first thing would be to properly identify all possible risks that could be associated with the project. In most cases, a project had been conducted before that was similar in design or production. For this reason most risks will be known. Identifying all of these risks has to be completed.

The next step in being prepared for a project risk is to determine their impact. This can be easily accomplished with a risk management software program. They have logarithms that can determine the severity of impact the risk may have. There are also calculations that can be done to determine the probability of the risks impact.

Once the project risk has been identified along with its probability of its encounter with the impact known, the manager can determine the correct path to dealing with it. In an ideal world the risk would be totally mitigated so no negative influence would bestow on the project. This rarely, if ever is possible.

Since a project risk has to be dealt with, the best way has to be determined. This can be done in several different ways. If it is a possible labor dispute, then a qualified mediator can be called in before there is a work stoppage. This is an example of outsourcing the responsibility of the risk. This also places the outcome into the hands of a third party for resolution.

A project manager can also handle the project risk themselves. This is very common since they are the leader of the project with the responsibility to ensure all of the problems associated with the project are dealt with correctly. They are also the ones that will be held responsible it there is a problem. 

No matter how a project risk is dealt with, the aim is to reduce or eliminate the impact of the risk on the project as much as possible.