Essay On Importance Of Risk Management

Importance of Risk Management
In this competitive world, companies have to deal with various types of risk all the time with there projects. Generally, it affects the budget and schedule of the project. So it is important to keep in mind the risk management strategies while creating an initial project plan.
Risk Management allows us to identify the problems which are unknown during the start of the project but may occurs later. Implementing an efficient risk management plan will ensure the better outcome of the project in terms of cost and time.
“Prevention is better than cure” preventing risk at the early stage is better than planning for it when it happens. There are several risk management tools such as Cause and Effect diagram, Fishbone

It is important to have the whole team involved and every team member should about the status of the project and identify there responsibility towards the project success.
Risk Management Strategies
There are few risk management strategies that can used to develop an effective risk management plan.
• Planning
The first and most crucial step is to create a solid plan. Plan should include the techniques, tools and data that are going to used in the project. The responsibilities of all the members should be distributed at this step. The utilization of resources and budgeting of the project should be done here. Management tools such as probability and Impact Matrix, FMEA are useful at this point.
• Risk Identification
Identification of the risk can simply be done by doing brainstorming with the team members. As Dr. McCarville said, there is no right or wrong answers. Every input is important and can really affect the process. Other beneficial tool is Fishbone Diagram.
• How to handle risk
After identifying the risk, next step is to decide how to handle those risk. There are four main strategies that can help to decide what to do with the