A risk analysis will help you to manage the risks associated to various projects. It should address:
- What could possibly go wrong?
- What is the likelihood that a risk could occur?
- How will it affect the project (Direct or indirect impact)?
- What steps can be taken in order to avoid, mitigate, transfer or meet the risks?
Identifying risks
In any project, anything could go wrong at any given time Eg: the project manager could get ill at any critical time, the building could burn down etc. Therefore it is important to anticipate and focus on risks related to a particular project, not project management in general. These risks might be related to:
- Staff: What if you can’t hire staff soon enough? What if they don’t have the right skills? What if a key member of the team left?
- Organization: What if you can’t get a buy-in from your institution? What if they don’t deliver the support they promised? What if an institution withdrew from your project consortium? What if you can’t get take-up? Could there be cultural problems, e.g. working with vendors? – Funding approval?
- Technical: What if you can’t get equipment/technology soon enough? What if it costs more than you estimated? What if the methodology didn’t work?
- External suppliers: What if they don’t deliver on time? What if they went bust?
- Legal: What if you can’t get permission from content owners? What if legal agreements take longer than you think? What if there are legal problems with IPR or data protection?
- Political or Environmental – any impact on the project and results.
Analyzing risks
In the project plan template, there’s a table where you can analyze the risks:
- List the potential risks: Risk Registry
- nAssign a probability to each risk (1 is low, 5 is high): Develop a Matrix nAssess the severity of the risk that could be occurred (1 is low, 5 is high): Use colours
- Give each risk a score (probability times severity)
- For the highest scoring risks, plan how you will prevent them happening (or manage them if they occur): Secondary risk list
Preventing and Managing Risks
It’s probably obvious why a risk analysis is done at the beginning of a project instead of half-way through, it facilitates predicting the risks that might occur and prevent them in advance. For an example, if it’s essential that for suppliers to deliver on time, therefore make sure your project agreement has a statement on the same as to minimize its impact on the project penalty clauses for a late delivery.
If it would be devastating for a project partner to leave the consortium, think of ways to keep them on board, and make sure your consortium agreement has clauses for resolving disputes and spells out obligations if someone left. It is important to do a contingency planning for unforeseen expenses when preparing the budget, and to allocate a slack period in the project schedule in case of delays. It is essential to foresee and list down the secondary risks as well, while coping with the current risks involved in a project.
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