Prioritizing and Analysis
3. Have criteria for prioritizing risk
In addition to risk reporting and timely communication, you also need a framework for prioritizing risk. Not all threats will have the same impact on your project. For example, some are low impact risks that may derail your goals but can be reasonably managed. Others are high degree, high impact risks that could potentially affect entire outcomes. By having a plan for prioritizing risk, you can allocate resources accordingly to ensure that your project isn't affected. There are many frameworks you can use to prioritize risks.
Start by asking yourself whether the risk could impact your company, its customers, or other stakeholders. You can also determine the level of importance your project has to overall company goals. Will the risk impact multiple stakeholders and cause significant setbacks? In the IT space, you can also categorize risks into specific groups that make prioritization easier. For example, launching a new software may necessitate risk categorization into the following groups: control, functionality, system architecture, and performance risks. These groupings streamline the process and enable you to follow a more thorough path when identifying and prioritizing risks.
4. Analyze your risk environment
Any experienced project manager will tell you that simply identifying and categorizing risks isn't enough to ensure the success of your project. You'll need to go a bit deeper by analyzing each risk and determining its potential effects on current or future workflows. Risk analysis is a multidimensional process that involves many different stakeholders. It involves determining the likelihood of occurrence, impact, and mitigation steps that may be necessary. During the risk analysis process, make sure you consider the following elements:
- Risk probability
- Risk impact
- Risk categorization
- Risk location (which parts of the project is the threat likely to affect?)