Mitigation Risk vs Project Management

Mitigation?is a strategic risk response wherein a project team takes active steps to reduce the probability or impact of a negative risk to a project. It implies a reduction in the probability and/or impact of an adverse risk to be within acceptable threshold limits.

Mitigation is one of the four strategies for responding to a risk with a negative impact a project. The goal should be to mitigate against negative risk so that if the risk is realized, the project suffers as little as possible.

Risk mitigation might include introducing preventative measures into a project plan. For example, if a construction firm risked losing building supplies or equipment due to theft while building in a high-crime area, they may decide to hire a security firm to monitor the work site around the clock. Hiring a guard won't guarantee that no thefts will take place, but it should reduce the likelihood of theft.

Risk mitigation might also involve introducing redundancy into the project effort. For example, if the project team faced a risk due to the financial instability of a vendor, the team might decide to spread purchases among two or more vendors. This might entail a cost, because you may lose economies of scale derived from working with a single vendor. But that might be acceptable when weighed against the cost of having a single vendor with uncertain finances.

Where it is not possible to reduce probability, a mitigation response might address the risk impact by targeting linkages that determine the severity. For example, designing redundancy into a system may reduce the impact from a failure of the original component.