Risk management is all project management

(Verzuh Eric)

In any project or organisation, risk management is an essential activity. Risk is defined as outcome uncertainty by M o R (Management of Risk, the OGC risk management methodology). A risk manager is concerned with the control of risks (uncertain problems and incidents) that will impact the goods or services that an company sets out to provide if they arise.

The M o R structure highlights three essential steps to successful risk management that can be incorporated within the context of an organisation or project:

Identify •

Risk recognition is the first phase in risk management. This involves defining and explaining any risk that could affect the achievement of goals, to ensure that all relevant individuals involved in the organisation or project operation have a shared understanding of these risks.

Risk identification strategies can vary according to the organisation's size and structure, the essence of the task or project and the risk management team's expertise. For instance, risk management within a small software company, depending on the experience of the developers involved, can include brain-storming and addressing possible risks to the project. On the other hand, a large government body might draw on the experience of experts in risk management who have dealt with risks across a range of similar organisations. Project managers responsible for the risks of a technical activity can call on experts to highlight the risks involved.

• Evaluation

For successful risk management, evaluation is critical. The risk manager may fatally underestimate the potential impact of a specific risk without critical consideration of the risks described in phase one, or (also fatally) try to combat each and every risk, without realising how likely it is that a risk would occur.

In risk analysis, the two variables that must be considered are:

O chance O chance

Potential effect o

The organisational background of the risks must also be understood to individuals responsible for risk management. For instance, Risk A may have a greater impact on Output 1 than Risk B has on Output 2. If, however, Output 2 is more important to the overall goals than Output 1, then Risk B can be considered more important than Risk A.

Ranking risks according to immediacy, effect and organisational context makes it possible for the risk manager to prioritise and prepare how to monitor individual risks.

Regulation of •

The risk manager must determine the acceptable risk response and appoint a risk owner who ensures that the risk response is conducted, tracked and managed by Science Papers.

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