Risk mitigation is the act of decreasing the riskiness of a project. Read what this writer has to say about what type of risks are involved in a project and how a project manager can mitigate these risks.
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What's the Risk?
Risk Mitigation, within the context of a project, can be defined as a measure or set of measures taken by a project manager to reduce or eliminate the risks associated with a project. Risks can be of various types such as technical risks, monetary risks and scheduling-based risks. The project manager takes complete authority of reducing the probability of occurrence of risks while executing a project.
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Mitigating Technical Risks
When delegating tasks to individuals, the technical competency of those individuals might be overlooked. If so, it increases the chances of the project being delayed and not meeting the deadline. Such delays can be avoided by increasing the communication frequency between the team members and monitoring their work.
Another alternative is to divide a complex task between team members and then delegate each part to a single individual. By reducing a complex technical task into smaller simple tasks, the execution time may increase but the chances of missing the deadline for task completion can be managed as the risk involved in the task is being diversified by the project manager among multiple individuals.
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Mitigating Monetary Risks
Cost-based risk factors are difficult to estimate. The experienced manager developes an intuition about decisions so that those that will increase the costs of deploying a task can be avoided. A safer bet used by project managers is the use of sophisticated cost estimation techniques. Some of the techniques such as Critical Path Method (CPM)/Program Evaluation and Review Technique (PERT) are used to oversee deployment of a task or a set of tasks and in analyzing the risks involved. Advanced techniques such as Expected Monetary Value (EMV) provide an insight on financial gain or loss if an event does or does not occur.
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Mitigating Scheduling Risks
Executing the right task at the right time helps to lower the risk of not meeting the project due date. Tasks can be assigned to individuals in two ways. The first one is to calculate the estimated processing time of each of the tasks and executing the tasks based on the Shortest Processing Time (SPT). The second one is to define due dates for each of the tasks and process them based on the Earliest Due Date (EDD). A project manager is the best judge here as to which method he would like to use in scheduling the tasks and delegating them to the individuals associated with the execution of the project. An advanced method of decreasing the risks while scheduling work-based tasks is by using the Monte Carlo Simulation method.
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A project manager can mitigate risks by classifying them based on the priority or level of the threat to the project’s success. Once classified as high, medium, or low, the concerned project manager will be able to devote time based on the classification and eliminate the risks in a sequential or in a random manner.