Risk management is important to the success of the project because unexpected risks could arise anytime and it occurs because of lack of risk identification, assessment, and prioritization. Risks will affect a project's cost, schedule and quality of work. It all depends on how the risk is handled. Risk management helps project manager to be prepared in facing the risk in the planned and measured manner. Moreover, risk management is important to move uncertainty away from risk and toward opportunity. Listed below are top ten best practices in risk management.
The first step in managing risk is identifying risk. Risk identification can start by looking at the source of the problem or the problem itself. Using the problem's source analysis, a project manager can identify the source of the risk (external or internal) that impacts to the project. For example, the stakeholders and the employees of the project are the internal source of the risk while the external source of the risk that could impact to a project could be the weather. Furthermore, a project manager can also use problem analysis to identify the threats for a project.
In the assessment stage of risk management, risk could be assessed into different levels based on its potential impact and the possibility of its occurrence to the project. It is important for a project manager to decide which risk management plan that needs to be used for the success of the project (prioritize the risk). Moreover, risk assessment increases the chances of a project to be succeeded because it identifies the alternatives available in delivery and methods for the project.