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How do you mitigate project risk?

By MaryWeilage Editor ·
This week's Application Developer Management newsletter discussed mitigating project risk. What types of project risks do you encounter frequently? How do you assess whether it's an "acceptable" form or amount of risk? Do you agree with Scott's analysis about how to mitigate project risk?

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P.R.A.C.T ise

by Greig In reply to How do you mitigate proje ...

Risk is inherent in all projects, Scott's article was a clear concise argument for using Risk Management strategies as an esential part of project planning. To often risk management is treated as an 'additional' role for the project manager. I would argue that it is one of THE roles for the project manager.

All Projects can review risks based on checklists developed through experience (or plagarised from other people) at start up. Riskes can than be assessed using the risk index outlined by Scott, and planned mitigation can be developed. I personnaly favour the classic PRACT approach

P - Prevent risk from happening.
R - Reduce, either the likelyhood of the risk, or its impact on the project
A - Accept, well it may happen and the consequencies can be lived with (or it would be to expensive to do anything to prevent).
C - Contingency, plan now what to do if the risk materialises
T - Transfer - make someone else responsible, e.g. take out some insurance.

Planned in advance risks are easily managed, and it can be a good team building exercise.

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Managing Risk

by steve In reply to P.R.A.C.T ise

Identify and managing risk is a fundamental responsibility of the project manager. Often, it is identifying the important risks from a laundry list of possible risks that is the challenge, particularly for 'newer' project managers. Identifying therisk that require management is often a matter of judgment. This is a primary reason why project management is an experienced based discipline - education is great, but nothing is as valuable as having lived through some horrendous project failures (or at least observing them).

If define risk as a potential negative impact to the goals of the project, then the task of the project manager is to identify, and manage risk to minimize or avoid the negative impact. An effective approach is to break risk down in to the following items:
1) Condition - the situation that poses the risk,
2) Consequence - what is the likely outcome should the condition be realized,
3) Impact - how significant is this to the project (this is done along the lines of high, medium, low, rather than trying to quantify the impact. High being a significant effect on scope / schedule / cost, etc...
4) Probability - how likely is this to occur.

The tool we use (Active! Focus) then does a calculation from impact and probability to determine a relative exposure for the risk. We then use the exposure rankings to identify what risks we want to manage, creating an action plan that is monitored as part of the regular project status meetings. The goal of the action plan is to either avoid the condition coming to pass, or mitigate the consequence to reduce the impact

No approach can substitute for the judgment that comes from experience, but a methodical approach can help you get to the key items.

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