Understanding Risk Management
In the area of project management, there are many levels in which a project manager or project group need to go through while working on a project for an employer or outside company. One of these levels is called risk management. One of the basic concepts of risk management involves understanding that there may be events or circumstances that may disrupt or even halt a project in its tracks while the group is working on it or when the project is finished.
It is the job of the project manager and that of the group to discover what the risks could be for a project; this means knowing that risks can occur and then figuring out a plan in which to prevent or address the risks that could happen. Conducting an operation risk assessment is a part of this risk management.
Explaining and Conducting an Operation Risk Assessment
What is an operation risk assessment? An operation risk assessment, also known as an operational risk, is simply a tool or process in which to identify risks and benefits and then determine the best course of action in any given situation. As with risk management, conducting an operational risk assessment should be done at all levels of the planning process of a project, not when circumstances or events arise. This is the very purpose of risk management – to identify and prevent problems from occurring.
There are six steps to conducting an operation risk assessment – identify, assess, analyze, make decisions, implement, and review. Each of these is explained below.
- Identify – this simply means to identify the potential risks that could or will occur.
- Assess – this is to assess the risks, by using risk quantification.
- Analyze – discover ways in which to prevent or reduce the risk.
- Make Decisions – after analyzing ways to prevent or reduce the risk, make the decision to choose which way is best.
- Implement – after making a decision, the project manager or group then decide how they will go about implementing the solution to the risk.
- Review – this is where constant review must happen, in order to ensure that the chosen solution is working and will continue to do so.
All of the above steps are important to the operation and should not be skipped or taken out of order. As part of risk management, it is important that all steps and procedures are followed; this is to make sure that as the project is underway, it will have a smooth outcome once it is finished. This process continues and starts again when new risks are identified; it does not stop once one issue has been found or resolved.
It is important that the project manager or group identify any new risks that may present itself and then go back over the assessment once more. This should be a continuous process until the project has completely finished.
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