A risk is anything that could potentially impact your project’s timeline, performance or budget. Risk can be either positive or negative, though most people assume risks are inherently the latter. Where negative risk implies something unwanted that has the potential to irreparably damage a project, positive risks are opportunities that can affect the project in beneficial ways.
Project risk management is the process of identifying, analyzing and responding to any risk that arises over the life cycle of a project to help the project remain on track and meet its goal.
What Is Risk Identification?
You can’t resolve a risk if you don’t know what it is. There are many ways to identify risk.You can identify the risk by is brainstorming with your team, colleagues or stakeholders. Risk identification is also a process, but in this case it lists all the potential project risk and what their characteristics would be. This information will then be used for your risk analysis. Though this process starts at the beginning of the project, it’s an iterative process and continues throughout the project life cycle.
What Is Risk Analysis?
Before analysing the risk in your project, you have to acknowledge that risk is going to happen in your project. Risk analysis is the process that figures out how likely that a risk will arise in a project. It studies uncertainty and how it would impact the project in terms of schedule, quality and costs. Two ways to analyze risk is quantitative and qualitative. But it’s important to know that risk analysis is not an exact science, it’s more like an art.
Determining Impact
Through qualitative and quantitative risk analysis, you can define the potential risks by determining impacts to the following aspects of your project:
b.Activity duration estimates
c.Schedule
d.Cost estimates
e.Budget
f.Quality
By implementing a risk management plan and considering the various potential risks or events before they occur, an organization can save money and protect their future.
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