Project Risk Management Strategy – Defining Threats and Taking Opportunities

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Project Risk Management Strategy Definition

In the literature on risk management project management, the term “project risk management strategy” is used to describe the scope and direction of actions for project practitioners to embrace the likelihood of both positive and negative consequences through configuration and implementation of risk management resources within a challenging project environment in order to meet the project goals and fulfill stakeholder expectations. A project risk management strategy combines tools and methods for identifying, analyzing and mitigating negative consequences for the project (threats) while using positive consequences (opportunities) to improve the project.

Following the given project risk management definition, in any project there are both threats and opportunities. A project risk manager is a person how should take care of mitigating the likelihood and impact threats and taking opportunities. That person needs to understand the project risk management definition to design a high-level plan for how project risks and opportunities will be managed during the course of the project. Such a plan will be the foundation for immediately initiating the project risk management process and utilizing risk management resources throughout the life of the project.

A project risk management strategy template is about the following:

• Developing the risk and opportunity management plan
• Taking steps to identify project risks and reduce the probability of their occurrence
• Communicating with project staff and contractors to collecting and analyze project risk management information
• Using project risk management software to process that information, create a risk register and share the project risk management database
• Generating and presenting project risk reports on review meetings
• Measuring the outcome of project risk management activities and recording lessons learned.

Two Components of Project Risk Management Strategy

Multiple project risk management articles published on the Web describe a risk strategy as a combination of activities for managing opportunities and threats. In this connection, a strategy for managing project risks can be considered a structured plan that consists of two components such as Risk Opportunities Management and Risk Threats Management. Let’s review each of the risk strategy components, as follows below:

• Project opportunities management. If referring to previous project risk management strategy definitions, an opportunity is a positive outcome that may bring additional value to a project by allowing achieving improvement. Project opportunities management is a set of techniques and tools to help a project risk manager to identify and understand possible improvements to the project objectives.

Often managing project opportunities refers to stepping through a 4-stage process (Identify, Analyze, Plan and Manage). The process is carried out following an opportunity management plan. Such a plan involves project risk manager in implementing formal and informal project risk management techniques (brainstorming, questionnaires, experience, and project history) to identify opportunities and create an opportunities list that is prioritized and scheduled. Once an opportunity is identified, it should be necessarily added to the risk register because any opportunity may cause additional threat.

• Project threats management. Actually this component of a strategy for project risk management refers to actions for indentifying, analyzing and mitigating negative consequences that are risks. Project threats management involves utilization of project risk management resources to describe risks, analyze their attributes, evaluate the probability of occurrence, and add identified risks to the risk register.

Like with managing opportunities, managing threats refers to a 4-stage process (Identify, Analyze, Plan and Manage). A project risk manager is responsible for organizing a team which will follow a risk treatment plan and report back on current progress of project risk management strategy.