PROJECT

RISK ANALYSIS

Hello everyone,

Assessing potential risks is essential in any project. Let’s take a look how
to do this.

Risk and risk analysis

A risk is an event that is likely to jeopardise the success of the project if
that event were to happen. It isn’t a problem — so far, as the glitch has yet
to happen!

Risk analysis is a process that helps you control risks. First, you need to
identify potential risks, and then you decide on a preventive strategy to
deal with them.

Making a list of risks

You need to bring the whole team together to help you draw up a list of
risks. You could even involve external experts. This is where
brainstorming comes in! The business can also make use of previous
experience and lists that have been drawn up in the past showing the type
of events that could occur.

But watch out, other risks can suddenly appear or some may change
along the way! So, you have to be vigilant and regularly update your
analysis.

Risk criticality analysis

Each risk must be assessed with respect to its impact (how serious it is)
and probability of occurrence: these two criteria combined give you the
risk criticality level.


You can then rank all the different risks, starting with those that are
highly unlikely to occur and moving through to incidents that are likely to
happen and could be catastrophic. Ranking risks in this way helps you
work out how to deal with them.

Ways to manage risk

There are 4 different methods for managing risk:
- If a risk isn’t serious or it’s unlikely to occur, then most people do
nothing at all;
- If the risk could arise, but it wouldn’t have a significant impact, then
usually people choose to monitor the situation using an
appropriate tool;
- If you think the risk is acceptable but it could cause significant
problems, then you need to put together a backup plan;
- Finally, if you believe the risk to be unacceptable, then you need to
take action to reduce it or remove it completely. In this case, you’d
be using a preventive reduction strategy.

Usually, the project sponsor will manage strategic risks and the project
manager will focus on operational risks. The same two people can also
look at potential opportunities.

Opportunity analysis

Opportunities are the opposite of risks. They offer the potential to make
the project more successful. An opportunity analysis identifies
prospects in areas such as the quality of deliverables, costs, deadlines etc,
and then defines appropriate action points.

This useful work is less common than risk analysis but can be carried out
in much the same way. So, you first identify opportunities, evaluate them,
and then decide upon a way to use them.

Thank you for your attention, and see you soon!