Overview of Risk Management and Mitigation Strategies

Modified: 17th Dec 2021
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Risk management is known as the process where you identify, examine and arrange any risks identified with the approach of reducing or omitting any impact risks could have on the project. After the fulfillment of this stage, the project manager should have intricate documentation about the more effective and satisfactory methods to manage every risk that was considered critical or important, also risk action plans will need to be developed to implement those responses into action (Cooper, Grey, Raymond, & Walker, 2005).

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Considering a mitigation plan, it attempts to minimize the chance of a risk occurring or decrease the impact of the risk in the event it occurs. Understanding a contingency plan, this would explain the proper steps to take after the particular risk happens, to reduce the impact. The contingency plan should be considered as the last resort. In this report, I will expound on the comprehensive detailed mitigation strategy to mitigate the unique project risk, the comprehensive contingency plan(s), that details every step I plan to implement in the event the unique project risk occurs, the comprehensive contingency plan(s) for each of the two identified enterprise risk that outlines every step to implement if the unique project happens and causes the enterprise risk should happen.

The mitigation plan that would set out for the project would be to configure a method to reduce the requirements ranked as catastrophic, the hardware requirements rank, and the training plan ranks. To reduce the risk of the hardware requirements, the plan could be to not try to meet the requirements which procedures the risk. Essentially, you can depict this as a risk avoidance measure. When dismissing the risk altogether, you ultimately lessen the probability of zero.

After the completion of this process, the project manager should have detailed documentation about the more effective and suitable ways to manage every risk that was considered critical or important, also Risk action plans will need to be developed to implement those responses into action (Cooper, Grey, Raymond, & Walker, 2005).

Risk Treatment Strategies

Risk action plans are established and executed to manage any risk identified, but those plans will defer as they need to address the project type and the type of risk. The different strategies to manage risk can be summarized in the following categories:

Risk prevention is focused on eliminating the possibility of the risk to occur. Risk avoidance is similar to risk prevention; the difference is the adoption of a different strategy for risk prevention, could involve a high cost but also a higher possibility of success. Some strategies for this category are operations review, alternative approach, process changes, and preventive maintenance.

Risk Mitigation is developed to minimize the impact of a risk in case it gets to happen. Usually, the main focus is to address high and medium level risks, the project manager could also include some low-level risk with a lower priority. Some strategies for this category are contingency plan, quality of work, audits and disaster recovery.

Risk Sharing involves sharing the cost of a possible risk during a project with another organization. If the risk becomes a reality, some of the impact is taken by each organization. Insurance is a common practice of risk-sharing where the insured party has a credit that could be covered by the insurer in case of the occurrence of the risk.

Risk Retention becomes an option when the risk must be managed by the organization, this is an expensive option that some organizations such as government agencies that face hard competition from the private sector in their environment. For any organization, high risk is part of their business operation, but also the rewards that come along with it, this type of organizations must have the proper experts to manage this type of risk.

Risk Response

The methods to establish and develop a proper risk response are similar to the ones used during the risk identification process. Analyzing the project, experience with similar previous projects, and recommendations from consultants based on previous projects. A list was developed during those sessions with a brief description of each response, process to be used to minimize or prevent the impact of the risk and when it will be implemented. All suggestions should be considered initially, but the group should focus on the ones considered as more effective risk resolutions (Cooper, Grey, Raymond, & Walker, 2005).

Risk: IT Staff exhaustion during a project

Method: Risk avoidance will be implemented through the use of operations review, considering the impact on the project if this risk becomes a reality can have a greater impact on other activities or tasks during the project. Implementing operations reviews will provide the levels of quality of work expected on project tasks and daily responsibilities of the IT staff involved in the project as well any possible complaints from personnel or colleagues that could be interpreted as signs of stress and exhaustion.

Response: Implement the work schedule of 4 days for a two (2) weeks and re-evaluate the performance and quality of work for each member of IT staff besides personal feedback from each member of IT staff before and after the change in schedule.

Risk: Historical Data conversion rate of 95% not meet.

Method: Risk avoidance will be implemented utilizing the improved designs and systems engineered. To understand how the impact of data rework after each test run, we need to ensure the process of data conversion is done automatically as part of the activities before and after each, the testing sessions and user acceptance tests include the conversion of historical data. Any errors detected will be reported as well as any data that could be removed from the conversion process.

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Response: Comparison of transaction using historical data with information entered manually and examine reports with both sets of data to find any variances. Implement additional logic on conversion programs and validate cross-reference tables. Continue testing and correcting issues found until the goal of 95% is reached. Contact application experts and consultants that could have other options of validating data conversion results faster to avoid any schedule delay and additional cost after each fail test.

Risk Action Plan

Risk Action Plans are implemented to address identified risks and will become part of project plans, and managed by the project manager as any other activity and process in the project (Cooper, Grey, Raymond, & Walker, 2005). Risk action plans should provide an objective, responsibilities, controlling resources, schedule or milestone to implement the action plan, impact on the project schedule, progress or status monitoring and reporting, and assistance needed for problem resolution.

Practical examples of Risk management: The contingency plan was initiated to lessen the impact of a risk if becomes reality.

Practical examples would be: The risk of a trucking company increase the cost of a critical route may be lessened with a contingency plan that uses railroad transport to deliver the equipment needed for a project.

Risk mitigation is designed to minimize the impact of a risk in case it becomes a reality. A practical example could be: If there is a possibility of a late delivery of vital materials, to combat this to a minimal effect, the order could be placed a few days or so in advance to ensure on-time delivery.

Conclusion

The risk management process regarding a project or an initiative on any organization should start from an accurate and effective risk identification. Essentially, by not performing this process effectively you will be allocating resources and effort to incorrect risks. It is very important for any organization to develop and implement a risk management plan and continuously evaluate and test this plan. Risk management planning will provide the categories and strategies needed to evade or lessen any risks identified in this process.

Reference

Cooper, D., Grey, S., Raymond, G., & Walker, P. (2005). Project Risk Management Guidelines: Managing Risk in Large Projects and Complex Procurements. Chichester, England: John Wiley & Sons Ltd.

 

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