Project team members at various levels identify and handle risks in different flavours. However, this will be ineffective without a structured risk management framework, as this leads to:
- Incomplete impact evaluation, leading to the loss of:
- Knowledge of the overall impact on the project objectives, like scope, time, cost, and quality
- Identification of secondary or new risks arising from the already identified risks
- Lack of transparency and a communication gap within and outside the team
Thus, it is very important for any project organization to set up an effective risk management framework. Instituting such a practice as a project team culture ensures:
- Conscious and focused risk identification and management
- Project progress as desired, with the least amount of deviations or surprise, and in line with project and organizational objectives
- Early and effective communication of project issues to organization and project stakeholders
- An effective team building tool, as team buy-in and acceptance is assured
Exhibit 1 shows that risk management is an iterative process and each facet of risk management should be planned and followed during each phase of the project.
*From www.pmi.org
