RISK ASSESSMENT

Risk assessment is defined in this study as a technique that aims to identify andestimate risks to personnel and property impacted upon by
a project. Traditional risk assessment for construction has been synonymous with probabilistic analysis. Suchapproaches require events to
be mutually exclusive, exhaustive, and conditionallyindependent. However, construction involves many variables, and it is often difficult
todetermine causality, dependence and correlations. As a result, subjective analyticalmethods that rely on historical information and the
experiences of individuals andcompanies have been used to assess the impact of construction risk and uncertainty

Risk management is basically an approach in which we explore identify, analyze and

mitigate the risks that can affect our project. Risk management is an important part of
project management which if done efficiently leads to the success of your project. Risk
management is an action plan that consists of various steps which are done to ensure
the removal of risk. If you are dealing with uncontrollable risk then you may set such an
action plan that can minimize the effect of these risks as you cannot fully get rid of such
risks.
Risk management is done by risk managers who are well aware of all the risks
associated with any particular business or project and different ways to mitigate them. As
this is the age of multitasking so, various organizations also expect project managers to
be risk managers as well. In fact, large numbers of project management institutions are
offering risk management courses for the project managers. The courses not only help
you to know the types and nature of project risks but also various techniques used to
deal with these risks.
The risk mitigation technique to be used depends on nature of project risk faced by your
team so you must be very careful in developing an action plan for fighting against risks.
Risk management is an essence of project management. It increases the chances of
your success up to a great extent. Following are some of the benefits of developing and
implementing an efficient risk management plan while working on any project.

Helps you to avoid any big disaster

Enhances your revenues by saving your expenses

Provides you mental satisfaction

Ensures the successful completion of project

Gives you competitive edge over others

Increases the sense of responsibility and accountability

Helps you to explore new opportunities

If you have not yet introduced a risk management plan for your project then I suggest
you to do it as soon as possible as it do not take much time for risks to become
disasters.

The project risk management plan addresses the process behind risk management
and the risk assessment meeting allows the project team to identify, categorize,
prioritize, and mitigate or avoid these risks ahead of time. Risk assessment is a step
in a risk management procedure. Risk assessment is the determination of quantitative
or qualitative value of risk related to a concrete situation and a recognized threat.
Risk assessment involves measuring the probability that a risk will become a reality.
But in any project, risk assessment is not a project manager's sole responsibility. A
special meeting has to be conducted to bring in the ideas of the entire team or at a
minimum the following

Project Manager: acts as the chairperson and facilitates the risk assessment

meeting

Project Team: the project manager must assign members of the project team the

roles of recorder and timekeeper

Key Stakeholders: those identified that may bring value in the identification of

project risks and/or mitigation and avoidance strategies

Subject Matter Experts: those identified that may specialize in a certain project

activity but are not formally assigned to the project but may add value

Project Sponsor: may participate depending on the size and scope of the project

Common Phases of Risk Assessment

In many projects, risks are identified and analyzed in a random, brainstorming,
fashion. This is often fatal to the success of the project, as unexpected risks arise,
which have not been assessed or planned for and have to be dealt with on an
emergency basis, rather than be prepared for and defended against in a planned,
measured, manner. It is essential that potential risks are identified, categorized,
evaluated & documented. Rather than look at each risk independently and randomly,
it is much more effective to identify risks and then group them into categories, or, to
draw up a list of categories and then to identify potential risks within each category. In
general, the following are the usually followed phases in Risk Assessment.

Risk Identification
Before plunging into risk assessment, the project manager will have compiled a list of
risks from previous project experiences. These will be reviewed at the beginning of
the project as a way to identify some common risks. This will also give an insight to
the members to predict possible risks. While there are many methods for identifying
risks, the Crawford Slip method is very common and effective. Each risk identified and

discussed should be stated in a complete sentence which states the cause of the risk,
the risk, and the affect that the risk has on the project.

Categorize and Group Duplicates

Categorizing risks is a way to systematically identify the risks and provide a
foundation for awareness, understanding and action. Each project will have its own
structure and differences. Categorization makes it easy to identify duplicate risks and
acts as to trigger for determining additional risks. The most common, easy and the
most effective method for this is to post the sticky notes on a large board where the
manager has posted categories. The participants then put their risks on the board
beneath the appropriate category. As they identify duplicate risks they stick the
duplicates on top of the other. The project manager then discusses the risks identified
under each category with the participants. All the risks identified, categorized should
be documented for the approval of all stakeholders.

Qualify Risks (Assign Probability and Impact to Each Risk)

The key questions to assess any risk in projects are: What is the risk how will I
recognize it if it becomes a reality?
What is the probability of it happening high, medium or low?
How serious a threat does it pose to the project high, medium or low?
What are the signals or triggers that we should be looking out for? A risk assessed
as highly likely to happen and as having a high impact on the project will obviously
need closer attention than a risk that is low in terms of both probability and impact.

Determine Risk Response

For the risks which have been identified with a high risk score, the participants will
determine the triggers or causes and identify responses. Responses may include:
Adding the risk to the project plan and scheduling for it.
Adding funding to the project to mitigate any potential increase in costs,
Adding resources to the project to mitigate any potential shortage in assigned
resources; Developing a course of action for avoiding the risk.

Documentation of Risks
The Project Manager will enter all the risks, probability-impact scores, and responses
and maintain a document to explain all risks. The high scoring risks will be added to
the Project Management Plan. This document will also be included as an appendix to
the Project Management Plan. Additionally, the risks with a high score will be added
to the project schedule as a method to track the risk at the correct time. Although
these risks are added to the schedule, the schedule itself is not necessarily changed.

This step is to provide awareness and visibility to the participants of all high scoring
risks throughout the projects lifecycle.