The importance of understanding risks and opportunities in project management
Risks and opportunities are present in all projects. Risks are classified as negative effects and opportunities are seen as positive. Risks should be identified at the earliest possible stage of a project. A risk plan and risk matrix are important inputs for a project management plan. The risk matrix assesses the probability and impact of project risks and can provide the project manager with an accurate overview of what risks carry the greatest effects on the project. By understanding these risks, the project manager can then select strategies and implement response plans to address them. Similarly, opportunities can be identified at the planning stage of a project and should be used in areas like finance and time to help achieve a more positive outcome from the project objectives.
Project risk events consist of three factors:
– The nature of the project risk event
– The likelihood or probability of its occurrence
– The amount at stake
The ranking of risks is a valuable tool used in Project Risk Management. It is a step in the qualitative risk analysis process and is done by ranking the various project risks according to their likelihood and severity. Once the impact of the risk and the probability of occurrence are determined, the risk matrix can be used to determine the overall severity.
The accurate ranking of risks allows the project manager to decide which risks are most likely to affect the project and by how much. This will help the project manager to develop contingency plans to deal with the most significant risks.
At ORS, we recognise the importance of understanding the potential risks and opportunities which present themselves during the project lifecycle. Our competitive advantage is the ability to offer clients a comprehensive multi-disciplinary service within one organisation. Our ability to take a project management led approach to identifying risks and opportunities at the earliest possible stage allows us to deliver the client’s objectives and requirements more efficiently.
The ORS Project Management Team uses risk analysis tools to support the interests of the key groups in all projects. We consider the objectives of the project, and layout a project plan which will align the stakeholders accordingly while delivering a successful project for our client.
If you have a project that requires a professional team to manage from inception to handover, please call ORS to discuss your needs.