8 Key Benefits of Effective Project Risk Management

I have been fortunate enough to work on Tier 1 projects with top tier organizations for just over a decade. I have also been recently blessed with PMI-RMP certification & soon expecting a PG-APM certification as well. With this experience & academic background, I have managed to pen down few benefits of effective Project Risk Management.

Life is more Risks Management rather than exclusion of Risks - Walter Wriston

Let's start with some basics ...

Why Project Risk Management? - Project risk management helps in predicting and mitigating the risks which help in avoiding any kind of loss or conflict in the project.

But, what is key to understand is that the scope of risk management doesn’t end here. There are a lot more sweeping benefits that can change the complete outcome of a project.

Here are 8 key benefits which I have managed to pen down for you.

• Evaluating Problem Areas: - A detailed project risk management plan will give you a clear picture of your project and the potential problematic areas in it. That way, you will be able to direct your (& your Stakeholders) attention towards the weak links of the project, perform periodic status checks, peer reviews and audits to keep up the project performance.

• Fewer Surprises: - Who doesn't like surprises, correct? But in a Project, none of us would like a surprise!. So, risk management plans give you an early warning of potential risks or issues. This enables the team to gear up and take the necessary steps to mitigate problems before they escalate to severe issues and cause any irreversible harm.
• Better Decision Making: - With information on risks in advance, the upper management is able to make better and efficient decisions. They will be having real-time information on risk through a dashboard which will be continuously providing them with the latest data.
• Enhanced Communication: - Effective risk management enhances the flow of communication. With the risks detected beforehand, it opens up the discussion point between the team involved. All the teams to bring their minds together and to talk about the problem areas and handle the causes of it rather than blaming each other after the harm has been done.
• Accurate Budget Estimations: - With project risk management mapped into your schedule and cost planning, you will be able to predict the potential problems. This will help you in setting aside a buffer budget (also called as contingency) for each of the domain like cost, time, resource etc. resulting in less wastage and better quality. (One of the reasons by WBS is important).

• Elevated Project Success Rate: - With an effective risk management plan incorporated in your project management, it boosts up the mindset of the entire team as they know the risks are being actively managed and there is very less probability of failure.
• Focused Approach: - Knowing the fact that the risks are being actively tracked and managed, the teams can focus more on their assigned tasks. Not only this, risk management highlights the problem areas of a project so that the teams can swiftly deal with them ensuring the project success.
• Better Escalation Management: - A systematic risk management plan will give you a proper idea of when a risk needs to be escalated to the senior level for advice and action. This will help in alerting the right people at the right time to analyze and fix the risk.

Risk is like Fire. If controlled, it'll help you; if uncontrolled, it'll rise up & destroy you - Theodore Roosevelt

I hope this article would have helped you in bringing different perspective towards Risk Management.

Please feel free to write to me if I can help you with any Project Management topics. Am open to connect.

Note: - Please stay safe everyone & please follow the protocols. (Below instructions should help you).

Thank you.!