3 Common Project Risk and How to Manage Them

One of the first questions you should ask yourself while planning a project is, “What might possibly go wrong?”

Although it may appear negative, pragmatic project managers understand that this kind of thinking is preventative. Issues will surely arise, and you’ll need a project risk management strategy in place to know how to deal with them.

However, how do you go about addressing the unknown? It may appear to be a philosophical conundrum, but don’t worry—there are actions you can take to help. In this post, we’ll talk about ways for getting a sense of potential risks so you can identify and track them on your project.


What is Risk Management in Project Management?

Project risk management is the process of recognising, analysing, and responding to any risk that develops during the course of a project’s life cycle in order to keep the project on track and accomplish its objectives. 

Risk management should not be a reactive procedure; it should be part of the planning process to identify risks that may arise during the project and how to manage them if they do.

A risk is anything that has the potential to affect the timeline, performance, or budget of your project. Risks are possibilities, and if they become realities in the framework of project management, they are labelled as “problems” that must be addressed. The process of recognising, categorising, prioritising, and planning for risks before they become concerns is known as project risk management.

Risk management can refer to a variety of things depending on the project. Risk management solutions for large-scale projects may require considerable thorough planning for each risk to ensure mitigation strategies are in place if problems develop. However, for smaller projects, risk management could be as basic as a prioritised list of high, medium, and low priority risks. 


How to Identify Project Risks 

The following aspects of a project are frequently affected by risks:

  • Budget: Risk might change how much money you need to finish a project.

  • Schedule: schedules are subject to delays and unexpected adjustments.

  • Scope: Primary objectives can develop or transition away from a project’s original motives, resulting in scope creep.


There are mainly three types of risks a company should look for. 


  • External risk – An external risk is one that is beyond the project team’s control. For example, a hired vendor missing deadlines or severe weather.

  • Internal risk – Internal risk is a type of risk that a project team can manage. Project participants missing deadlines or estimating budgets incorrectly are two examples of this.

  • Positive risk (opportunity) – Risks do not have to be negative. An unexpected incident that can have a beneficial impact on your project is known as a positive risk. Positive risk can result in projects being completed sooner or cheaper than planned, or in exceeding initial targets. Positive risks might arise as a result of internal reasons, such as team members becoming more productive thanks to new technology or external factors, such as a policy change that benefits your project.


How to Manage Project Risks

To have a well functioning project risk management strategy you should be familiar with a standard risk management procedure as well as risk reduction measures. The risk management process will assist you in anticipating and planning for risks, while mitigation techniques will equip you with the tools to deal with them if they occur.

The risk management process, often known as the lifecycle, is a method of addressing risks that may arise during the course of a project. Though there are some minor differences, the risk management process, or lifecycle, generally follows the phases below. Both positive and negative risks can be assessed using this method.

  • Identify Risks: The first step in understanding potential risks is to understand what they are. Individual risks that may affect your project will be identified in this step by creating a list (or spreadsheet) of potential risks. Implementing a new technology programme for the project, having a poorly defined project aim or deliverable, and not having enough safeguards to protect the health and safety of project team members are all examples of common project hazards. Use your project management experience and look up similar previous projects to identify what obstacles you might face. You should also solicit ideas from stakeholders, team members, and subject matter experts; they may have knowledge of the industry that you haven’t considered.
  • Analyze Potential Risk Impact: During the risk analysis step, you will investigate the likelihood of each risk occurring as well as the potential impact each risk will have on your project. You can start by placing this list of risks into a risk register, which is a chart that lists each risk along with information such as priority and mitigation measures. You should keep track of both qualitative and quantitative data
  • Assign Priority to Risks: You’ll assign risk priority at this stage by calculating risk levels based on the probability and impact of each issue. This entails giving a high, medium, or low priority to each risk based on the criteria you’ve identified. By assessing your risks, your team will be able to understand where they should focus their efforts in order to reduce risk.
  • Mitigate Risks: Make a strategy to mitigate each risk. These plans should also be recorded in your risk register.
  • Monitor Risks: Set up a procedure to track each risk as your project progresses in the last step. This can be accomplished by assigning team members to monitor and minimise certain risks. This ensures that you always know where the dangers are and how likely they are to occur, so you’ll be prepared to deal with them if they do.



There are various components to risk management, including a systematic procedure for planning for risk and several ways for mitigating it.

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