An Overview of Project vs. Risk Management
What is project management?
Project management can be defined as the process of coordinating efforts and resources to create a unique product/service. Projects are planned so as to achieve specific goals, and they often involve special teams working together on a temporary basis. Furthermore, projects may involve the allocation of additional resources to help the company meet its goals.
Because many projects involve workflows that are outside the scope of your daily operations, developing a plan for managing risk is critical. Every project will come with a unique set of risks that may prevent progress. Thinking and planning ahead will help you understand your risk environment better so you can respond appropriately when a threat occurs.
What is risk management?
Risk management is the process of identifying, analyzing, and responding to threats that may affect the success of your project. Because each project is carried out under a unique set of circumstances, risk management should be an essential component of project planning. Understanding your risk environment should be part of the larger planning process, and appropriate personnel should be assigned to perform these tasks. Furthermore, every stakeholder in the project has a role to play when it comes to risk management.
The definition of risk can be broad. It is generally any event that could derail the progress of your workflows, ranging from cyber-security threats to delayed timelines. Because of the expansive nature of risks, every project manager should take time to analyze their risk environment in detail.
A risk can be measured by multiplying the likelihood of an event by its impact. Using this approach allows you to categorize different levels of risk while paying attention to those that could cause the most damage. Other types of risk may be low impact or have a low likelihood of occurrence. In such cases, it makes sense to accept the risk and take no specific mitigative actions. As long as you can keep risks as potentialities that won't turn into realities, your project is likely to go smoothly and meet its goals.