Risk Management
Risk Management is an integral part of the project governance that focuses on identifying, analyzing, and addressing the uncertainties that could affect the project’s objectives. It provides a structured approach to dealing with risks by adopting practices like risk identification, qualitative and quantitative risk analysis, risk response planning, and risk monitoring & control. Effective risk management can significantly increase the likelihood of project success by providing better control over project scope, schedule, budget, and performance.
Guide: Risk Management in Project Governance
Why is Risk Management Important:
Risk management is crucial because it helps to identify, assess, and manage potential risks that could impact project goals. A thorough risk analysis can help identify these risks ahead of time, allowing for planning and mitigation strategies.
What is Risk Management:
Risk Management is the identification, evaluation, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities.
How it Works:
Risk Management involves a series of steps which start from identifying potential risks, analyzing the impact and likelihood of the risks occurring, determining responses, and then monitoring and reviewing the risks. Each step in the process assists in the management of risks.
Exam Tips: Answering Questions on Risk Management:
1. Understand the principles of risk management: It's crucial to know the fundamental principles of risk management. These principles form the basis for answering exam questions.
2. Know the risk management process: You need to understand the process, its stages and the reason for each stage. This will guide you when answering scenario-based questions.
3. Use proper terminology: Examiners always look out for the use of proper risk management terms, thus using them appropriately can earn you marks.
4. Practice risk management questions: The more you practice, the more you understand how to apply risk management principles to different situations.
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