Why Risk Management Is Just as Important as Project Management

Ten Notable Google Project Management Apps

Risk is part of nearly every aspect of business. The daily practices for nearly every employee involve some mitigation of certain risks to keep the business moving forward.

Within many enterprises, risk management involves a person or team of individuals who attempt to consider future scenarios and extract possible business risks from them in order to identify areas of liability and possibilities for improvement and success—this is especially important in the area of project management. 

In the latest edition of the book, “Risk Management: Concepts and Guidance,” author Carl Pritchard, a certified expert in the project management field, identifies systems that project management professionals (PMPs) can apply to manage risks within ongoing projects. Pritchard then explains how to use these systems in the daily work of project management in accordance with the most recent Project Management Body of Knowledge (PMBOK).

In our IT Downloads section, we offer Chapter 5 of Pritchard’s book as a free download. It is on “Planning Meetings: The Risk Management Plan.” According to Pritchard, conducting planning meetings is an important part of performing risk reviews for a project. During such a meeting, “existing risk and project data should be researched and made available.” Such meetings may require a half-day session or longer to go through necessary information. To consistently apply the risk techniques in each meeting, Pritchard recommends the following:

• Ensure unanimity on the project’s objectives, approach, duration and scope of the project.
• Assess any policies the enterprise has on risk handling.
• Identify resource responsibility for each possible risk (i.e., legal departments are responsible for contractual issues, but IT will be in charge of technologies used for the project).
• Establish tolerances for risks in terms of cost, schedule, performance, etc.
• Estimate the thresholds of possible risks and what might trigger them, then decide at what point the processes should change to avoid a possible negative outcome.
• Review the work breakdown structure (WBS) and ensure the responsible parties have a clear understanding of what is expected.
• If the organization has risk management templates, apply them to guide the project through best practices identified by the organization and provide information on lessons learned during prior, similar projects.

The remaining parts of the chapter explain what the output of such a planning meeting should include and how to document the contents of the meeting for those involved.  Pritchard suggests creating minutes of the planning meeting along with a risk management plan.

For those involved in project management or who are interested in becoming project management or risk management certified, this book and chapter are an important read. Pritchard’s expertise provides guidance to set projects forth on the right foot, with risks mitigated and team members focused on what to expect and how to keep the project on track.

Kim Mays has been editing and writing about IT since 1999. She currently tackles the topics of small to midsize business technology and introducing new tools for IT. Follow Kim on Google+ or Twitter.