When we speak about project management one thing that all project managers will be concerned is of the risks associated with the projects. Experienced and efficient project managers will try to devise plans that will act as a countermeasure to the risks associated. Not all risks can be forecasted before hand, but some presumed beforehand which purely depends upon the efficiency and experience of the project managers. It is understood that risks are inevitable in the business, but the project manager must ensure that their impact is kept to minimal and devise plans in such a manner that they do not affect the goals and objectives of the company.
Not all risks have a negative impact on the project, but there are some risks that will also create a positive impact on the project. The project manager has to create or develop a mitigation plan once they identify the risks. In simple words, risk management is a systematic process of identifying, quantifying, and managing the risks that pose a threat to the organization objectives and profit goals.
If risks are not properly managed that can affect business activities in various ways. It can lead to financial, strategic, and operational failures. Risk can be measured using statistical concepts. Companies cannot remove all the risks associated with the project, but to an extent they can mitigate with effective plan and strategies.
Benefits of risk management
Risk management is one of the important aspects of project management. Though there are many benefits of risk management, but two are most important and they are time and money. Time and money are the two main attributes in project management and the success of the project also revolve around these two attributes. If the project manager has good control on the time and budget then the rate project success automatically enhances.
As said earlier there are two kinds of risks good risks and bad risks. Good risks in other terms are known as opportunities and bad risks, well there no points for guessing, it is harmful to companies objectives and goals. Skilled and efficient project managers make use of good risk and keep bad risks away.
Good Risks (Opportunities)
Project managers often come across good risks during their project execution, these risks can be profitable if they are used in the right manner. Which means these risks have to be taken when it is an appropriate time. For instance, a good look and feel website with informative content always attract high traffic to the website, but it is time-consuming. If the target for the company is to attract high traffic to their companies website in short span then it would bad risk to take. If they take other ways like offering discounts and freebies, this would increase website traffic significantly in quick time and it will also solve the problem of project manager.
But sometimes it so happens that project managers are inclined towards short term gains and do not concentrate on their main and long-term objectives. It is always advisable that the project managers stay focused on their main objective and in between the project execution process they can take good risks. They should also ensure that these risks do not harm or affect the objectives and goals of the project.
Bad risks are something which will create a negative impact
on the project. These are the risks project managers are very much concerned about. Though all the risks cannot be anticipated, some can be and project managers develop countermeasures to reduce their impact on the project and the company.
Ways to deal with bad risks
There are three ways that you can deal with bad risks:
Project managers can devise a plan for some common risks that will occur during the project. After devising a countermeasure, they can share this plan with the team members and explain them how to deal with it.
Reducing the impact
As the project managers already have a counter measure for the common risks that arise in the project, they can reduce its impact on the project. Though, there are some risks that cannot be foreseen, for such risks companies can opt for third party insurance companies.
Creating backup plans
Project managers must always have a backup plan for the risk. If one method fails then they can implement plan B to reduce the impact of the risk.
Risks are inevitable in project management, but project managers must develop appropriate plans to reduce the impact of the risk. These measures help in completing a project in a successful manner.
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