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A Risk Management Tool

May 26 2011

One of the most overlooked but a necessary instrument to have for a successful project is the use of a risk management tool. This can take many forms, but the most effective is that of a properly constructed risk management plan.

It is the use of this risk management tool and the results it produces that will help keep a project rolling along towards a successful conclusion. This will happen because the impact of risks that could hamper your efforts to reach a successful conclusion of your project will have been properly mitigated.

To make this occur, the risk management tool must begin with the use of a risk management template whose sole intention is to create such a plan. This begins with looking at the template and recognizing the data that is required to fill it out in the most constructive manner.

The first thing this risk management tool will point out is the need to properly identify all the risks that could interfere with the project. This needs to include both the internal ones and external risks that could jeopardize the project.

Once the risk management tool has indentified all possible risks and the possible impact potential, prioritizing them correctly is required. This way, the one that poses the greatest damage potential to the project in either means, whether in the production itself or in monetary value, can be correctly dealt with.

The risk management tool is useful in the mitigation process by establishing in the plan the different means of mitigation that are available to the project manager. For those risks that are unavoidable and will lay a heavy monetary burden on the project, some level of insurance is a viable option. This will only cover the monetary cost of the impact, but any physical damage will have to be dealt with if any is present.

The use of a risk management tool is just one of the useful means at the disposal of a project manager to keep their project on schedule and on track for a successful conclusion. The risk management template is the means at which the risk plan can be created, but it needs to be implemented for it to be effective.