A worry-free project manager is one who has a risk management process ready at hand. Stakeholders feel more confident about projects that are accompanied by a risk analysis framework. Risk management is one of the knowledge areas of PMBOK comprising seven practices.
These seven procedures are listed here as follows:
- Monitor risks
- Risk management plan
- Qualitative risk evaluation
- Quantitative risk assessment
- Risk responses planning
- Identify risks
- Risk responses implementation
What Is The ‘Identify Risks’ Process?
The identifying risks process is crucial for project management as it facilitates the documentation of existing threats. Project team members are able to learn from this information, and predict risks to prepare solutions beforehand. Unlike the other risk management processes, risk identification goes a step ahead in preventing any interference in project performance and progress.
What Are The Inputs Required For Identifying Project Risks?
An array of inputs are required to identify every possible uncertainty that might pop up during the course of a project. Risk identification is a vital step in leaving no gaps in the process of risk management. The following items are the locations where risks might exist and therefore need to be emphasized:
Organizational process records
Data, document templates, and files related to previous projects are great sources of interpreting the risks. These provide accurate information about the solutions used at that time to resolve issues. By not repeating similar mistakes, a project team can keep possible threats at bay.
Commercial environmental factors
Industry studies and commercial databases are essential inputs for the identify risks process. These must be taken into consideration for detecting the probabilities of misfortune.
Plan documentation
Risk identification is impossible without a documented plan of risk management for mapping the activities to be executed. Details of the breakdown structure, assigned responsibilities, and risk management provisions contained in this document are required for identifying risks.
Scope Baseline
Assumptions and limitations give rise to risks in project management, which are present in a project scope baseline. A statement of the project scope is included within it. That must be used as a reference for determining the possible risks.
Cost estimation plan
A project’s cost baseline is another means of searching for threats depending on the cost management approach used. Chances of risks are negligible for a project with well-planned cost reserves. Projects running on a tight budget without enough scope for maneuvering lead to cost overruns.
Project schedule plan
The plan of a project’s schedule must be referred to for finding out the chances of risks. Projects with tight deadlines are more prone to risks in comparison with those that have their deadlines a bit slackened.
Quality assessment plan
The strength of a project’s quality management plan determines the magnitude of its vulnerability. This document is of prime importance for identifying possible risks in case any segment of the project lacks quality practices.
Estimation of activity costs
Exceeding project expenses are counted as a major risk and can be detected beforehand by viewing the budget. It is necessary to go through the costs evaluated for a project’s scheduled activities.
Activity duration analysis
Project expenses are directly linked to the duration scheduled for each task. Lack of accuracy in evaluating the durations might cause schedule overruns ultimately leading to unwanted expenses.
Stakeholder names list
A project’s stakeholder register is of great help for inviting stakeholders to meetings on risk-related discussions. This enables keeping them informed too, about the challenges that could be faced by the project they have invested in.
There are certain important project documents that must be looked up as a Process of Risk Management. These are, namely:
- Assumption logs
- Network diagrams
- Earned value reports
- Task performance reports
What Are The Techniques And Tools Of Risk Identification?
Risk identification is the prime step of a project’s risk management process that calls for precision. Certain effective techniques and tools are used for conducting it.
Brainstorming
Both brainstorming and the Delphi technique are equally efficacious for risk identification. The latter requires a project manager to consult experts by sending them requests. Additionally, project managers may interview team members, experts, and stakeholders for learning about their project-related experiences.
SWOT
A visual four-grid presentation of Threats, Weaknesses, Opportunities, and Strengths is highly effective. It is used as a cross-reference for thinking over rare misfortunes that cannot be ignored.
Root cause assessment
This technique is a systematic approach to figuring out the risks hidden within a project. Addressing the causes first helps a project manager in selecting the right preventive action plan. It leaves very little room for future risks.
Impact matrix
A representation of risks comparison in terms of their impact and probability must be created. This saves time that is otherwise wasted on resolving minor risks while the major ones remain unattended.
What Is The Outcome Of The Identify Risks Process?
A risk register is the final output of the ‘identify risks’ process. This is a documentation of identified risks with corresponding planned responses. It offers an explanation of the solutions. Based on these, a project manager decides what risk-controlling measures to allocate and to whom.
An updated risk management process forms the foundation of every successful project irrespective of internal and external circumstances.
