Risk Analysis in Project Management

As we know, that project is an activity having definite starts and a definite end, for example, a construction project of an organization, Dam Project, health care Project, IT project, business project. Project management is a process of planning the schedule of the different activities, organizing resources for the work, recruiting people for project work, motivating people for project goals, and controlling each movement against set standards if not successful, then taking the right actions to manage the project work and schedules.

Risk management plays a vital role in managing projects because it positively or negatively impacts the completion of the project work. Risk is an unseen occurrence that creates problems like cost overruns and time overruns in the project life.

Managing risk is a challenge in the life of a project for every project manager. Successful risk management reduces the cost of operations in any project run by an organization.

The project manager should design a risk analysis to mitigate any complicated situation. If risk management is not adequately managed, then the following consequences may be seen,

1) budgetary deficit due to unplanned expenses.

2) delay of project delivery to the clients or customers.

3) Problems faced by project team members.

4) Failure of quality guidelines.

5) Wastage of time, money, and resources.

Example: A project company has done a feasibility study on the consequences of environmental threats but ignores the results during project execution. It might be possible that it has to face government legal notice or massive compensation to the local authority.

For example, A marketing manager of a reputed company assigned an advertising project to a local vendor in California without adequately investigating the vendor's work. In this case, it may be possible that the customers may not give their interest in advertising.

A project manager should plan at every stage of the project life cycle from its starting or initiation to the last close-up phase to manage the risk effectively.

Reference

PMI. (2017). A guide to the project management body of knowledge: (Pmbok? guide). Newtown Square, PA, USA:

Project Management Institute.Learning. (n.d.). Retrieved December 8, 2019, from https://www.pmi.org/learning/library/risk-analysis-project-management-7070.