Why is risk overlooked in project management

Besides being the main point of contact, they are the glue that holds all information together and dispense it to the right people. In the case of a website project, distinct phases require different expertise and personnel, but the project manager is present at every step to communicate to the rest of the team. A digital goal or technical requirement may be mentioned at a kick-off meeting and the project manager will flag it and ensure the tech team is made aware. Without a proactive project manager, important communications can easily be overlooked, but first-rate PMs prevent any issues from falling through the cracks.

Targets can be missed, key milestones may be sidestepped, and launch dates could be delayed. Without someone keeping a strong hold on budget, investment in the project can spiral unnecessarily.

And most importantly, strategic goals can be forfeited. Fearing such risks can naturally make a client wary to relinquish control of the process, but for a project to run smoothly, trust between a project manager and client is essential. Confidence must be built early on, and clients should feel they can comfortably pass the baton to a project manager whose process alleviates their concern and diminishes risks. The tasks involved in risk analysis require a formidable force of a qualified project manager and skilled technical staff to handle the risks within the capacity of their specific expertise.

The technological aspect of running a project is a complex deliverable because there is a high turnover of new and advanced technologies.

The tech aspect of a project poses a critical threat to data security, organization services, compliance and information security. Risks associated with technology are more challenging because implementing new IT programs often requires fresh personnel training and software acquisition. There are also other technological-related risks like service outages that might lead to delays and project failure. Effective and timely communication is a significant work ethic that you must strictly observe when you are in charge of a project.

Setting up meetings with stakeholders, such as project donors, helps you track any changes, reassign tasks and foster a cohesive team environment. With all the communication channels and gadgets at our disposal, sometimes team members neglect the critical components of effective communication, leading to loss of data or misinformation and eventual project disruption. Uncontrolled and unauthorized change to the initial intended project scope may lead to the extra cost of additional features, products or functions.

Almost all projects face this risk, and sometimes it poses an irreversible challenge because some of the added functions are significant to the project and desirable to the project's success. A shortage or mismanagement of project funds resulting from an inflated budget or other constraints is a threat to the project's completion. When the project cost is higher than the budgeted funds, the risk might shift to other operations and workforce segments.

The reduction of the funds may also contribute to an occurrence of a scope risk. A project may stall or terminate if there is a poor implementation of critical operations and core processes such as production or procurement. The risks could result in a direct or indirect loss owing to inadequacy or failed qualitative, quantitative or strategies.

Depending on the project type, operational risks are:. Health and safety is a type of risk that can compromise a company's compliance rules. An organization should have its health and safety standards monitored and evaluated regularly to identify potential risks that can lead the company to losses or fines. The risk can also lead to staff or customers' health complications where a company's reputation might be at stake. The management is responsible for establishing continuous health and safety risk monitoring in the company premises and its products or services.

Leveraging on internal staff is a potentially high-project risk because sometimes the project activities are staggered in different waves at various locations, requiring in-house personnel attendance.

The overlap of the waves becomes a potential distress source. Staff incompetence in various project divisions is another risk that may contribute to the additional cost of personnel retraining or transfers.

When a project is unlikely to achieve the results as intended, there is a perceived performance risk. The risk has an inherent impact on the overall performance of the business. Such a problem may lead to the additional need for financing, a likely penalty for nonperformance and it may also leverage the competitors' performance.

When a project fails to meet the stated results, market risk is likely to occur. Competitors might take the advantage to cripple the business and eliminate it from the market. Another market risk could occur in commodity and foreign market treads, which might not favor the project's initial estimates.

Liquidity, credit and fluctuation of interest rates also pose as a potential market distracter to the project's product sales. A likely adverse event beyond the control of the project management is a potential risk. Such risks manifest in various types and forms, including terrorism, storms, floods, vandalism, earthquakes and civil unrest. A project may stall or discontinue when such events occur. Risk management is a framework that allows you to identify risks, evaluate which ones are a priority, and plan a way to mitigate those them.

Trying to sell executives on risk management is like taking the role of an insurance salesperson, dwelling on the negative potentialities that might not even happen. But even organizations that have a process for managing risk unnecessarily expose themselves to certain kinds of risks.