Project Risk Management Techniques

         According to the definition stated in Project Management Body of Knowledge (PMBOK), risk refers to a situation that is uncertain about occurrence but affects a project if it occurs. It can be simply explained that risk is a concern of a project manager or a project team. When that concern occurs, there should be a risk plan to alleviate it. If it is a serious concern with great effects and is high possible to occur, risk plans will be increased. On the other hand, if it is a minor concern, a risk plan may not be necessary depending on how much it is. Projects normally encounter risks because project management refers to managing huge amount of people with varied perspectives, thoughts and expectations. In addition, there are others limitations for project management that limit project activities such as time limitation, budget and resources. It can be said that, a project and risk come closely together. As a result, a project manager must understand risk management because not a project will ever be run as planned. And if that can happen, a project manager’s responsibility is only to map out a project since a project can operate itself as planned without any risk factors that may cause failure.

            Project risks are changed according to project and organization contexts. Risk factors of construction projects are different from those of engineering projects or IT projects. Examples of risks often found in projects are that; scope of a project is unclear; a project team has insufficient knowledge and skills to run a project; a project is delayed due to insufficient resources and; a project delivery does not meet the standards. Whether project risk management is effective or not depends on skills and experience of a project manager and a project team as well as support of director and organization. Guidelines for project risk management can be summarized as follows.

1. Proactively Manage.

It refers to managing a project proactively by assessing situations which tend to be risks and possibly cause problems in the future and carrying out Preventive Action before risks or problems will happen. If preventive action cannot be carried out, there should be risk plans and a team should be well-prepared for possible risks. Root causes must be solved instead of end results. Repeated problems must be decreased.

2. Focus on Stakeholder Expectation

Expectation of all project stakeholders must be taken into account and be initially managed to build up project cooperation. Sometimes, problems found in a project occur from a project manager since he or she does not understand or does not respond to expectations of stakeholders. As a result, a project does not have any supports which lead to several problems.

3. Motivate Project Team

 project team often lack cooperation and focus and does not look at an overall of a project. These may cause problems to them or they may be defeated by problems. Creating motivation is an activity that reduces project risks and increases opportunities of success. Simple motivation methods include building the same objectives, communicating effectively, providing tools and skills necessary for a project team, creating friendly environment and encouraging happiness at a work place.A project team is an essential part of project management. An unmotivated

4. Put the right man in the right job   

Recruiting staff to work for a project and assigning appropriate tasks reduce risks caused by inappropriate staff that may directly affect quality of work and delay of work. Recruiting staff with appropriate competency and motivation to suit each task should be considered as important factors. Abilities and motivation of staff can drive a project to success even they are encountering problems or limitations.

5. Well Plan & Managing Change

Well-prepared plan and good project management help a project manager to manage a project under uncertain situations as well as changing situations effectively. A project manager and a project team should not heavily rely on skills on solving unexpected problems. It is practical to solve unexpected problems but excessive unexpected problem solving reflects poor skills in planning. A well-planned project will encounter a few unexpected problems and be ready for any changes at any time. This is due to the fact that there are effective risk plans for those changes.

6. Close up with resource and decision maker

project manager must be able to access those people and build up good relationships. In addition, a project manager must share the same objectives and raise confidence and reliability among those people to gain great cooperation and supports for a project. Having good relationship with a decision maker and a resource owner essential for a project is a crucial factor which gains supports for a project. A decision maker or a resource owner may refer to an organization director, a functional manager or a vendor or anyone who has essential resources for a project. A

7. Sensor and alert to risk event

a risk level of project goes over the limitation. This can be supportive data for a project manager when making decision to escalate risk plans to respond to risks currently occurring. Apart from following the 6 guidelines mentioned above, a project manager should provide a risk alert system to alert a team when any risks tend to occur. A popular method is using Key Risk Indicators (KRI). That is, there should be regular close-investigation. KRI is a tool that alerts a team when

            All 7 guidelines above will help a project to have good potential and enable risk management to be dealt effectively. Additionally, it increases opportunities of project success, demonstrates professionalism of a project manager and generates confidence of project stakeholders. Experience and abilities of a project manager directly affect risks occurring in a project.


                                                   Paiboon Punyayuttakan (PMP)