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What does risk management include?
In companies, risk management deals with all activities concerning risks, including new opportunities in an enhanced comprehension of the notion.
Risk management - what does it involve?
Therefore, when planning a project you should ask yourself the following questions:
- What can go wrong in my project?
- Where do I need to be particularly careful? Where are the dangers and what kind of dangers are watching me?
- Are there any experiences or problems that already occurred?
After an intensively collecting all possible risks, it is necessary to rate them by the following factors:
- Probability of occurrence
- Impact on costs caused by the risk
You can see all risks structered in risk matrix.
In risk management, all risks are added, rated and sorted accordingly in a coordinate system (see matrix) probability and impact.
The further to the right and up the risk is sorted in the matrix, the higher is the impact and undesired probability. To keep the risks in a project as low as possible, it is necessary to develop a strategy with respective measures to keep the impact (and thus possible costs) as low as possible. The subject of risk management therefore includes far more than just identifying risks in project planning, but also their probability of occurrence and the impact on costs. In addition, you can subsume the strategy to be derived and implementation under risk management.
Risk management explained in five easy steps:
- Creation of a risk matrix (Administration)
- Identifying risks
- Rating according to probability of occurrence and impact on costs (and time)
- Develop strategy and measures
- Communicate the risk situation in the project to all involved persons
Usually these steps can be done manually using a spreadsheet. Sophisticated project management software already includes substantial risk management in the standard functional range.
Advantages of the risk and opportunities management with KLUSA
Entering and rating of risks
- Entering standard project risks or technical risks according to the FMEA method
- Entering the probability of occurrence and impact
- Assigning the risks to work packages and milestones
- Continuous change of risk rating and status as well as other attributes
- Regular recording of risks in project reports
Enhancement by changes and defects
- Considering and introducing an additional risk management
- Understanding of changes (e.g. as a preliminary stage to a change request that requires approval) and defects (as occurred risks)
- Classification of venture types
- Additional approval status for all types of ventures possible
Technical risks according to the FMEA method
- Enhancing technical risks according to the FMEA method (failure mode and effects analysis) to include the attributes severity, probability of occurrence and detection
- Integration of these attributes on a company-specific scale as well as calculation of the risk priority number (essential criterion for the rating according to the FMEA methodology)
- Standardized parameters for the description of the risk
Risk evaluation with a risk matrix
- The matrix shows the degree of probability that the risk/venture will occur in relation to the impact of the risk/venture on the respective project
- Graphical presentation of the risks/ventures in various charts and dashboards
- Comprehensive overview for the project manager and the management
Risks in multi-project management
- Overview of all risks/ventures that are managed and reported in the context of all projects of the organization
- Cross-project sorting and filtering of risks/ventures according to priority indicators or other attributes
- Quick, simple, but comprehensive overview of the measures to minimize and prevent risks/ventures