Every organization and business faces uncertain risks or harmful events costing to the company’s finances or may lead to a permanent closure of it. In this scenario, risk management is the only way to remains safe and conquered challenges. Risk Management contributes to projects success to a wider range and ensures potential risks can be identified, mitigated and resolved within the given time frame. A successful project manager pays close attention to communication and solicits the input of meetings in order to secure achievements of projects objectives hence reducing the rework costs (Rouse, 2020). The blog is going to represent the importance of risk management in project management. It highlights the effective way to identify the early risks, secure the objective of a blog that also helps in reducing the rework costs.
What Is Risk Management?
As defined by Bessis, project risk management has become a standardized concept increases the chances of project success to a great extent. This is termed as action plan consisting of various steps and ensuring removal of risk via techniques and tools. Some of the key benefits of applying risk management while working on any sort of projects are-
- Helps in avoiding business disasters and saving capital
- It establishes pathways for successful implementation of projects
- It increases the sense of accountability
- It enables the project manager to review the project and create an effective response
- Brainstorming all the opportunities that have been skipped
- It increases the stability of the project and decreases legal liabilities
As suggested by many assignment helpers, the majority of tech companies have their relevant issues. In accordance with MacDonald, 2015, establishing compliance strategies and balancing legal and regional expectation in the USA is quite difficult. In fact, Google hired staff through acquisitions that would be difficult to manage.
In an environment where the changes impact the project rate diversely, an organization specifically links the risk management to attain financial and strategic goals. Risk management has become elevated and reported C suite board is strong.
Organization Invested In Risk Management Is More Likely To Achieve Higher Growth
Every organization sets their own budget priorities substantially updating ongoing capabilities, As per Deloitte, 2019 risk management survey, 40% of the companies felt risk management is an important factor to achieve strategic goals. When the survey has proceeded, it has been found, the compound annual growth rate (CAGR) is likely to 5% increased when they review risk management as a source of achieving strategic goals(Rugger et.al, 2019).
On the other hand, among companies having revenues less than 5%CAGR feeling risk management is an important segment to attain maximum goals.
Rules To Manage The Risk
1- Identify The Early Risk Associated With Projects– Risk management is intended to reduce the chances and frequency of risk occurrence. Essentially organizing well-planned risk management structured is nothing but a quality problem-solving under which the foremost priority of a project manager has to identify the risks and reviewing all the resourced associated with risk exposure. On that note, make a clear list of who is responsible for risk (Almeida et.al, 2019).
2- Communicate Risks– Pay close attention to the risk and the solicit input into the meeting and discuss it with team members. Focuses entail the risk exposure frequency with the project sponsor or major stakeholders and decide on top risks.
3- Consider Opportunities And Thread– According to online assignment help experts, as risk has a negative connotation for being harmful to the projects, there can be some opportunities and positive risk might have associated with it is neglected somewhere, henceforth make sure you are dealing with the opportunities with a high pay off that may not require bigger investment and accelerate the growth of the project.
4- Risk Prioritizing– Some risk has a higher probability to impact the project progress while some may have lesser. To do so, evaluates the tendency of risks and develop contingencies (Gleißner, 2019). This process of prioritization helps the project management team to manage that risk has both a high probability of occurrence and a greater impact on project growth.
5- Assessing Risk– Identify risk occurrence at what level to determine its causes to have happened. The information gather will provide insights among a range of risk occurrence and provide time to optimize it.
6- Developing A Contingency Plan– To prevent the risk or reduce its likelihood chances of occurrence, develop a contingency plan and considered it as a task. Make sure these actions should be taken promptly.
7- Tracking Risk– Last but not the least, as defined by assignment writer, record the risk and effective Responses to track the if the risk happens derails the project or not. The daily efforts must be made by the project manager focusing on the current situation of risk.
Why Is Risk Management Important In Project Management
The timeframe in which risk occur will have an impact should be identified as soon as possible. Also, it is important to cost, schedule, scope, and quality in detail as per the nature of risk. Hence it can be said, in all the way, the exposure of risk to a project critically impact the project and might be an agreement with the stakeholders (Duggan, 2019). In this case, a risk management schedule the ground rule to monitor risk triggers also one that can define the best measurements. To combat the overall impact of the risk management process on the project can be defined in given points-
- Risk management contributes to the success of projects by determining the external and internal risks
- In order to ensure the project run smoothly, the project manager can communicate their plans with stakeholders
- This helps project managers to maximize the outcomes and reducing the chances of falling of projects.
- A risk management plan helps you to become proactive and developing actions to reduces the likelihoods
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Conclusion
Through this blog, we have defined what are risk management and its importance in project management activities. It has been discussed in this blog, risk management is termed as an action plan consisting of various step and ensuring removal of risk via techniques and tools. This defines a risk management plan forming pathways for successful implementation of projects and enables the project manager to review the project and create effective responses. Further, it has been discussed companies under or more than five per cent CAGR have experienced higher growth and felt risk management is important criteria to achieve set goals. We have also discussed risk management process under which the first step is the identification of risk, second is risk evaluation, third is risk handling and fourth is controlling risk. Addition to all, we have finally elaborated why risk management is important for the project in terms of providing key features of the risk management process.
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References
Almeida, R., Teixeira, J. M., da Silva, M. M., & Faroleiro, P. (2019). A conceptual model for enterprise risk management. Journal of Enterprise Information Management.
Bessis, J. (2011). Risk management in banking. John Wiley & Sons.
Gleißner, W. (2019). Cost of capital and probability of default in value-based risk management. Management Research Review.
McDonald.C(2015). How does Google Face Global Challenge.
Rouse.M (2020). Risk management.
Rugger.C, Calgana.K, Vanuga.C & Vitters.C, Fay.M (2019) Reimagine risk: Thrive in your evolving ecosystem Deloitte’s 2019 survey of risk management