Common Types of Project Management Risk

Anyone who believes there is a project that is risk-free should stop believing in optimism and instead drink some realism. Both project management and life are full of risks. Baz Luhrmann said, “The real problems in your life are likely to be things that never crossed you worried mindThe kind that blindsides your at 4 p.m. on a Tuesday idle Tuesday. Unexpected events can come up at any time, no matter how carefully you plan. You can’t build a fence high enough to keep them out, but you can learn to be prepared to face them every time. Recognizing the risks involved in project management is the first step to understanding how to manage them. It won’t take a lot of books on the topic or years of experience to make it work. You have to start somewhere. You might just find some wisdom. Project management: Risk categories
These categories are complex, but we will try to summarize them for you. One of the possible ways to classify risks is the PESTLE categorization:Political
Economic
Social
Technological
Legal
Environmental
Project managers may use a common set of risks to assess a project’s potential risk. We’ll be presenting three groups of risks that complement one another. Performance, scope, quality or technological risks
Performance risk is when a product, service or program may not deliver the value it needs. A company might invest time, money, and effort in a project that doesn’t deliver the results it intended. Some internal projects can even lead to the loss of KPIs. It’s easier to understand what should and shouldn’t be included in team activities when a project scope has been defined. Quality risk can be a combination of many factors. Technology problems can have a negative impact on performance and affect the project’s schedule and costs. Too many activities outside of the scope could also compromise the schedule and quality of a project. Schedule risk
It’s the risk that you won’t meet deadlines, just like the name suggests. Deadlines can be crucial and it is not possible to break them. Let’s take, for example, organizing a solar eclipse-watching party. If you extend the deadline, there won’t be a solar eclipse to view. Sometimes, being late can mean losing a lot, which leads us to the next type of risk: cost risk
Every day brings new and unexpected costs. What is cost risk in project management, you ask? The budget is usually an essential element of any deal between agencies and clients. The time estimate is another important element. Although it is nearly impossible to give an exact estimate, one can get better with experience and time. Cost and schedule risks are tightly controlled. Costs can rise dramatically if extra effort is made to meet deadlines or if deadlines are extended. If funds are scarce, quality could be at risk. Cheat Sheet for Business Profitability
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