The Project management can be define as the method of organizing the technique that changes are implemented efficiently within the organization. That is related to project which is a temporary endeavor that is design to create a sole product or service with a certain beginning and end result. There are many disciples that are inter related with each other like initiating, planning, executing, controlling and at the same time people should work as the team to achieve their goals. For example,many business organizations have their project managers interrelated with them (McNeilet al. 2015). Therefore, they plans the project, monitors them and takes corrective action when necessary thus, it helps to complete the project on time that in turn enhances their reputation.
On the other hand, Risk management can be defined as the identification of risk that are associated with the project. Risk can be various types like project failures, credit risk, legal liabilities, natural causes, disasters etc. as the negative events are considered as risk. Risk management generally reduces the resources thatcould have been spent on the opportunity costs that lies under positive events to get the profit (Glendonet al. 2016). There are many methods to identify the risk management that is categories as identification of threat, assessing the threats, determination of threats, reducing and prioritize the risk reduction measures.
The risk management is the part of the project management that plays a crucial role. If the project manager plans and manages the risk associated with the project then it could leads to success. But it is essential that project managers always plans for the uncertainties associated with the project and obtain consensus from the team members on how to handle the risk and other related events.
The analysis of the concept of risk in any project management involves identification of some factors, elements or information that a project manager must bear in his mind. This segment deals with all those information, which are required to be considered while scrutinizing, or studying risk that might involve in a project. In order to analyze the concept of risk management one must aware of the fact that what a risk in project management is. Thus, the Risk analysis is the method of identifying and management of potential problem that are associated with business initiatives or projects (Lam 2014). It is generally a complex process as it needs to be diagrammatically shown about finance data, marketing forecasts, project plans etc. that acts as essential planning tools during crisis. Analysis of risk is done critically during planning of the projects so that possible threats can be identify, taking decision about the project, improving and managing potential risk, equipment or technology failures etc. are done. Risk analysis can be identified from possible or existing threats such as human threats, operational threats, reputational threats, procedural threat, structural threats, political threats, natural threats, technical threats, project threats, financial threats or structural threats. These threats can be describe is several ways which are discussed in the very next paragraph (Hopkin 2017).
Human threats are those threats or risk that are related to humans such as illness, death, injury etc. operational threats are the risks or threats relating to disruption of supplies, failures in distribution etc. Theseare related during the operation of the project. Similarly, reputational threats are related to the reputation or goodwill of the company that may be loss of customers or employee confidence, damage to the market reputation etc. Again procedural threats may be related to the system of frauds, failures of accounts or internal system. Project threats are the threats thatare related to major threats like crossing the limits of budget, experiencing issues with product or service quality.Financial threats can be termed as those risks thatare related to finance like non-availability of funding, business failures, stock market fluctuation etc. Similarly threats relates to technical issues includes advancement of technology or technical failures. There are some threats thatare calledpolitical threats like that are in line with change in tax public opinion, foreign influence etc. Sometime there might be some natural failures such asbad weather conditions, disaster or disease thatcan be considered as Natural threats or risk. Structural changes are also considered that may leads to affects the staffs present in the company by the use of dangerous chemicals, poor lightning, falling boxes or any alike situation.
Risk management process is used in order to reduce the risk of the problem as in the project planning itself many plans regarding risk are implemented. Projects often starts in a right direction but if somewhere problem arises in the middle then it goes off, as the project manager cannot works according to the plans. There are different types of levels where risk can be classified which are as follows (Pritchard and PMP 2014). Early identification of risk in the project like review of the risk that are associated with the help of project team management’s experience and knowledge, brainstormed potential risk and missed opportunity if the project is not completed on time and clarification should be done to each staff so that they may be responsible. The communication about the risk should be done among the staffs so that they can pay attention about the risk and perceives a view about it. Here sponsors should make decisions regarding the top risk that usually exceeds the commands of the project manager. Assessing the risk is an important factor in the risk management like when the risk is having negative impacts of being harmful then positive impacts also arises which is called opportunity that may lead the project team to grow by learning more from the experiences. Priority should be given to the risk according to the capacity of the project. Evaluation instruments must be there in order to prioritize and categories the risk so that it may not be the causes of big losses. Risk should be fully understandable along with its impacts of risk. As risk can occurs at different levels of the project, therefore identification of the risk should be there which would help to assess the solution related to the risk (Bromileyet al. 2015). During this process, management should also understand what the causes of the risk are and what factors that are responsible for the risk impacts. This in turn will gives valuable impacts about the project that in turn would help to optimize the risk levels effectively. Responses related to the risk must be developed that would help to identify the needs when at risk that is reduces likelihood of each risk, managing the risk; things that should be done to ensure opportunity that are not missed. Preventive measures should be taken to minimize the risk and convert into fruitful ideas into task in which the organization would be benefitted. Contingency plans should be ready which turns quick plans into action. Recording should be done so that if risk arises then effective responses may have been implemented.
The project managers should learn from the history of the projects that have not been successful. This has provided valuable inputs for making the future projects a successful. The examples of the projects are given below:
The completion of the Panama Canal involved conducting of proper planning. The canal was successful as the project leaders faced risk head on and completed the project after considering all risk. It is important that all project managers should perform the work faster and efficiently to complete the projects.
In 2012, the bank has decided to increase the monthly charge of the customer. In that case the bank has faced greater opposition. The BOA thought that they could handle the problem but they did not expect the imagination. The bank did not expect that the announcement to reduce the charges would not be accepted by the people. The assessment of the risk went wrong but the bank recovered from the risk with the help of proper of risk management.
Risk management plans should always develop from small issues or problem that may develop into problems. There are many types of risk management plans that comes into action by calculating the probability of the events, how that may be impactful, risk related with certain ventures and dealing process of the problem associated with the risk (Sadgrove 2016). As plans always helps to deal with the adverse situations when they arise. As in the project immaterial of the size carries lots of risk related to finance legal, physical or can non-financial. Thus having an effective risk management is the foremost to success to any project so there are few steps that should be followed in order to construct the project management strategy.
The Practices must be done in order to control emergency and successfully executed risk management system. Many programshave been allotted in order to identify the risk early.
It is important to gain the trust of stakeholders that will clearly acts as base in risk reduction or acceptance reference on getting mission capabilities to the user. Many government manager have program management office that defines risk management process, tools or articles (World Health Organization 2017). These things are been used as starting tools for a specific approaches and plans for the individual programs or approaches. Some people becomes very knowledgeable about every risk that may be appear during the project including technical, operational, mitigations etc. communication of risk information helps to illuminate risk that may have impact across the organization which amplifies the benefits of mitigation that were shares among staff (When et al. 2015).
Conclusion:
In order to conclude the entire discussion in brief it can be declared that risk analysis is a proven way of identifying and assessing factors that could negatively affects the success of a project or business. It always helps us to examine the probable risk that an organization might face and helps to choose whether to move with the decision or not. Risk analysis can also identify threats in various possible ways and estimates the like covering of those threats being understood. As values of the risk have been worked out so there possible ways are also found out to reduce the risk factors. This may include choosing to avoid the risk, sharing it, or accepting it while reducing its impacts. It is essential for the organization when working with the risk analysis they should be aware of all possible impacts which should be revealed while working on the project. This includes being mindful of the costs, ethics and people safety. As risk, management is a fluid process as here risk are always changing from high to low along with different aspects of the project. As today, if some risk is high as by probability on impacts, tomorrow it might change. While some risks completely drops off when risk management comes into action. As risk changes old risk may disappear and new risk may appear. Investigation is an important process in risk management, as it needs to be checked regularly and repeatedly. Inexperience project manager cannot be tolerated to handle large project. Completion of the risk valuation early on and in the project’s execution happens continuously during the projects lifecycle. Risk assessment allows to deals with the uncertain project events in a proactive manner. This in turn allows delivering the project on time, on budget and with quality results.
Reference:
Bromiley, P., McShane, M., Nair, A. and Rustambekov, E., 2015. Enterprise risk management: Review, critique, and research directions. Long range planning, 48(4), pp.265-276.
Glendon, A.I., Clarke, S. and McKenna, E., 2016. Human safety and risk management. Crc Press.
Hopkin, P., 2017. Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers.
Howes, M., Tangney, P., Reis, K., Grant-Smith, D., Heazle, M., Bosomworth, K. and Burton, P., 2015. Towards networked governance: improving interagency communication and collaboration for disaster risk management and climate change adaptation in Australia. Journal of Environmental Planning and Management, 58(5), pp.757-776.
Koks, E.E., Jongman, B., Husby, T.G. and Botzen, W.J., 2015. Combining hazard, exposure and social vulnerability to provide lessons for flood risk management. environmental science & policy, 47, pp.42-52.
Lam, J., 2014. Enterprise risk management: from incentives to controls. John Wiley & Sons.
Lorber, D., 2014. Importance of cardiovascular disease risk management in patients with type 2 diabetes mellitus. Diabetes, metabolic syndrome and obesity: targets and therapy, 7, p.169.
Matyas, D. and Pelling, M., 2015. Positioning resilience for 2015: the role of resistance, incremental adjustment and transformation in disaster risk management policy. Disasters, 39(s1).
McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts, techniques and tools. Princeton university press.
Penning-Rowsell, E., Priest, S., Parker, D., Morris, J., Tunstall, S., Viavattene, C., Chatterton, J. and Owen, D., 2014. Flood and coastal erosion risk management: a manual for economic appraisal. Routledge.
Pritchard, C.L. and PMP, P.R., 2014. Risk management: concepts and guidance. CRC Press.
Reboredo, J.C., 2013. Is gold a safe haven or a hedge for the US dollar? Implications for risk management. Journal of Banking & Finance, 37(8), pp.2665-2676.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Wehn, U., Rusca, M., Evers, J. and Lanfranchi, V., 2015. Participation in flood risk management and the potential of citizen observatories: A governance analysis. Environmental Science & Policy, 48, pp.225-236.
World Health Organization, 2017. Critically important antimicrobials for human medicine: ranking of antimicrobial agents for risk management of antimicrobial resistance due to non-human use. World Health Organization.
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