Running simultaneous initiatives at an organization wide scale is always a challenge. Numerous stakeholders, different…
Risks are a given for any initiative or enterprise across industries. No wonder, PMI has dedicated a detailed process around risk management as part of their PMP certification.
Projects small or large all involve risks. Having the right understanding and strategy to handle risks is crucial to the project success and the enterprises’ too.
Risks can be of various types and probability and can be lurking across various corners of your project be it regulatory, natural, competition, change of business landscape, advent of disruptive technology. You name it.
Take the e.g. of Nokia and Research in Motion (RIM). Both were the super powers of the mobile phone industry. But the risk of not adopting to the new technology and user sentiment cost them their business and drove them almost to a point of no return.
To begin with, it has to be a mainstream activity and a must-have component of your projects. Right from the beginning!
It is a tough ask; no doubts about it. And neither is it everyone’s cup of tea.
Risk Management requires experience, thorough knowledge of your business, the projects you are dealing with and a lot of foresight.
But if done rightly, the rewards are significant. When the project stakeholders accord the due importance to risk management, they have increased their chances of success by 50%.
Having established the significance of identifying risks, let us take a look at some of the common risks in project management and strategies to mitigate them.
Budget and Cost Risks
Enterprises with an established PMO and that follow the project management practices thoroughly usually place a “contingency fund” into the project budget.
This is something that is controlled by the project sponsor and is typically between 5–20% of the total project budget.
A smart thing to do. But what warrants the need for the contingency funds? Risks!
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