Integration of risk management
| Integration of risk management |
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Integration of risk management is the process of identifying, assessing, and addressing project risks throughout the life cycle of the project. This process involves continual monitoring, analysis, and response planning to ensure that potential risks are avoided, mitigated, or managed effectively. The goal of integrating risk management is to ensure that the project is completed on time and within budget, while adhering to quality standards. In order to achieve this, it is important to identify, assess, and address any potential risks, as well as to proactively respond to any unexpected events.
Best practices of integration of risk management
- Develop a Risk Management Plan: A risk management plan is a structured approach to managing project risks, which outlines the processes, procedures, and techniques to be used to manage risks. This document should include a comprehensive list of potential risks, as well as strategies to address them.
- Identify and Assess Risks: The first step in the risk management process is to identify and assess any potential risks. This involves gathering all related information, analyzing and evaluating the likelihood of a risk occurring, and determining the potential consequences of the risk.
- Develop a Response Plan: After identifying and assessing the risks, a response plan should be developed to address the risks. This plan should include strategies to prevent or mitigate the risks, as well as plans to respond if the risk does occur.
- Monitor and Re-Assess Risks: It is important to continually monitor and re-assess risks throughout the life cycle of the project. This helps to identify any new risks that may arise, as well as any changes to existing risks.
- Communicate and Report: Effective communication is key to successful risk management. All stakeholders should be kept informed of any changes to the risk management plan, and any new risks identified. Regular reports should also be provided to track risk management progress.
When to use integration of risk management
Integration of risk management should be used whenever there is an identified risk that could potentially impact the successful completion of a project. This includes the identification of potential risks before the project begins, as well as ongoing analysis and response planning throughout the life cycle of the project. Specific applications include:
- Identifying potential risks to the project, such as technical, cost, schedule, and resource risks.
- Assessing the likelihood and potential impact of each risk.
- Developing strategies to mitigate each risk, such as using additional resources, adjusting the project timeline, or changing the scope of the project.
- Establishing a monitoring system to track and evaluate the progress of the project and identify any potential risks.
- Developing contingency plans to address any unexpected events.
- Establishing communication systems to ensure that stakeholders are kept informed of any changes or risks.
Advantages of integration of risk management
Integration of risk management offers many advantages for a successful project deployment. These advantages include:
- Improved identification and assessment of risks – Integration of risk management enables project teams to identify and assess potential risks more accurately and efficiently. This allows the team to plan for potential risks before they occur, reducing the impact of unexpected events.
- Improved response planning – By assessing and addressing potential risks, project teams can develop more comprehensive response plans to minimize the impact of any unexpected events. These plans also allow teams to quickly respond to any issues that may arise during the project lifecycle.
- Increased accountability – With an integrated risk management process, project teams are held accountable for any mistakes or omissions that may occur during the project. This encourages teams to be proactive in addressing risks, which reduces the likelihood of project failure.
- Improved communication – By establishing risk management processes, project teams can ensure that all stakeholders are informed of any risks, changes, or issues that may arise during the project lifecycle. This improves communication and collaboration between teams, resulting in better project outcomes.
Suggested literature
- Bassler, D., Oehmen, J., Seering, W., & Bendaya, M. (2011). A comparison of the integration of risk management principles in product development approaches. In DS 68-3: Proceedings of the 18th International Conference on Engineering Design (ICED 11), Impacting Society through Engineering Design, Vol. 3: Design Organisation and Management, Lyngby/Copenhagen, Denmark, 15.-19.08. 2011 (pp. 306-316).
