What are project risks?
Risks are defined as possible deviations in terms of quality, performance, deadlines or costs. Defined project goals and/or the overall success of the project can be influenced by these deviations, but this can be avoided. The aim of project risk management is to identify the project risks and to react accordingly. In order to do this, uncertainties, variables and unidentified risks must be detected and evaluated early on, and suitable measures (preventive or corrective ones) need to be formulated.
How to manage risks efficiently
A project risk plan is ideally created already in the project start process. A risk plan should contain the following:
- Risk description
- Risk manager (also referred to as risk owner)
- Probability of occurrence
- Impact (quantitative and/or qualitative)
- Risk value
- Risk status
If the project risk plan is already implemented in the start-up process as a proactive planning and controlling tool for project managers, maximum implementation quality can be achieved through faster reactions, shorter processing times and regular risk controlling. Unplanned costs can be avoided.
Why is risk management important?
Unfortunately, in many cases risk management is not implemented at all, as it is frequently considered too time-consuming, labor-intensive and expensive. However, risks are inevitable when managing projects, as all projects are subject to change, also traditionally managed ones. Often, the cost of risks incurred will quickly exceed the risk management costs. So, no one wins anything in the end.