Schools Training

Best Practices in Process Risk Management

5 NOV 2014
Career Path : Administration

Risk management

Companies are focused on efficiency in the wake of the recession. An online MBA in project management is a solid investment for anyone wanting to break into the business world. A successful project manager must have a strong understanding of risk and the risk management process. The risk management process begins by identifying potential risks associated with the project, and culminates in a master document called a Risk Register. During the initial evaluation process, triggers for each risk are identified and contingency plans and risk controls are developed. The results are consolidated on the Risk Register.

If the process stops after the initial evaluation, the Risk Register is soon forgotten. As a result, risk controls and contingency plans may not be implemented when needed. Without effective risk management the project is more likely to fail, costing the company valuable resources. Employers require project managers who know how to utilize risk management tools throughout the project and maintain relevant response strategies.

Assign Responsibility to Team Members
Project managers should assign each identified risk to a team member. The team member is then responsible for monitoring potential triggers to their assigned risk during the course of the project, and for responding appropriately. For example, a team member could be in charge of ensuring the company secures enough materials for the project. If one of the company’s suppliers falls short, the team member in charge of that risk can quickly implement the agreed-upon contingency plan. This strategy streamlines the team’s response to unscheduled changes during project completion. 

Maintain a Master List
Instead of developing a risk matrix from scratch for each individual project, the project manager should maintain a master list of common risks, triggers, controls and contingencies. Using the master list, the project manager and his or her team can develop a risk matrix for each new project much faster.

How to Keep the Risk Register Relevant
In order to maintain its relevance, project managers must ensure that the Risk Register is easy to read and often reviewed. The register should be updated to reflect any risks that have increased or decreased in value. New risks should be added and risks that are no longer relevant should be closed. The Risk Register is a living document that must be updated regularly to be useful to team members and the project manager. This ensures the risk register is not forgotten and fosters a risk conscious culture within the company.

Conclusion
In order to survive in a highly competitive economy, companies must effectively anticipate and control project risks. The high demand for project managers has resulted in more online universities offering MBA degrees. The risk management process is complex. Project managers must respond nimbly to changes in risks before, during and after the project’s completion. A quality education is the first step to becoming a successful project manager who can effectively manage risk.