The successful development of a project largely depends on Risk analysis which helps to adopt a systematic approach in managing risks and uncertainty associated to the project. If you know the problem chances are that you’ll make sure to avoid it: this is why performing a Risk analysis is so crucial. Every project contains a certain level or magnitude of risks, therefore it is vital to keep all project stakeholders well informed about them and about what will be done in order to mitigate these risks at an acceptable level. The risk is the measure of the probability of an event and the costs associated with not achieving an expected purpose.
There is a failure of a project with any combination of the three following ways: performance, costs and schedule.
- The product or service does not meet expected performance levels
- The current costs are higher than those budgeted
- The delivery or timing is too late Risk analysis is part of a larger methodology which is the risk management that has an inclusive process of dealing with risks.
The risk management plan is a smart way to guide the risk management process and to document its results.
The followings are the steps of a risk management process:
- IDENTIFY: identify risks before they become a problem
- ANALYSE: transform risk data into decision making information
- PLAN: translate risk information into action
- TRACK: monitor risk indicators during the life cycle of a project
- CONTROL: adjust deviations from what was planned
- MITIGATE: reduce the impact of any unforseen event
- COMMUNICATE: the key factor for a successful risk management program.
Never stop providing visibility and feedback data internal and external to project activities.