What is Project Risk Management?

One of the inevitable tasks project managers have, as part of any project, is risk management. Project risk management can be a hard thing to master, and the uncertainty while managing can be stressful. This article explains the impact of a risk management plan and how to manage future projects more successfully by detailing what you and your team need to keep in mind.

Definition of Project Risk 

According to PMI, project risk may be defined as the chance of certain occurrences adversely affecting project objectives, the degree of exposure to negative events, and their probable consequences.

As a result, the project risk is defined by three risk factors:

1. The risk event or identification (what could happen to harm the project)
2. The risk probability (how likely is the occurrence of the event)
3. The amount at stake ( what could potentially be lost).

Identifying, analysing, and responding to risk factors throughout the project process (and in the best interest of its objectives) is the essence of risk management.

A risk factor is a situation that may induce project risks. It increases the chances of something happening that will stand in the way of your project objectives. The impact of a risk factor should be calculated in the risk management plan. Each stage of a project life cycle can pose new risk factors for your project.

3 Common Types of Project Risks  

Each project has its own risks that depend on the project's curre...