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Identify the consequences of not managing a risk

Poor risk management has the ability to severely impact your business.

  • Risk Manager can be accessed by any interested stakeholder based on previously granted permissions;
  • These risks may be related to misuse of the product or errors within the product which affect the outcome through calculation or logic errors.

In this article we outline 7 of the most significant impacts of poor risk management and tell you what you can do about them. Poor User Adoption User adoption refers to the process of getting your team members to actually follow a process, use the tools you have mandated and stick to the methodology. The process is too bureaucratic to be efficient, so users shortcut the prescribed process and do their own thing, just to keep work moving along The process is not robust enough, so project managers have to implement their own workarounds to ensure adequate control is maintained in a changing environment The process is too complicated, so project teams streamline what is required and do what they think is best.

All of these scenarios lead to sub-optimal processes, lack of standardization across the business and more work for your teams.

The Risk of Not Having Risks

Any change to the way people work requires change management. Talk to the people involved about how they work.

Difference between risk and issue

Make sure the process reflects your organizational culture and is workable. Make sure your risk management efforts are the right size for your company. Late-running Projects Unforeseen risks can significantly slow down a project because it takes time to understand them, analyse them and prepare management plans to monitor, act on and track them. Delays can also happen when risk management activities take longer than you expected and they push out other activities on the project schedule.

Risk assessment - consider the consequences

Schedule risk workshops throughout the project to prompt the team to spend time reviewing and identifying new risks. Work with your project managers to ensure that they are scheduling enough time for risk management activities and including a buffer of time on highly risky projects, according to your methodology. Overspent Budgets Risk management costs money. However, the cost of dealing with a risk if it materializes and becomes a real issue for your business, is normally far, far more.

Calculate budgets include an element that relates directly to the perceived riskiness of the project. Cover any mitigation or management activities in this contingency fund, and then call off against it. This will help keep your project budget on track and not used for ad hoc spending on risk management activities.

Involve your clients in your risk management so that they know what professional steps you are taking to protect them and their investment.

7 Impacts of Poor Risk Management (And What You Can Do About Them)

Regularly report on risks and what you are doing to monitor and manage them. Your clients need to have confidence that you are effective at handling risk. This leads on from the point above: One bad review can have far-reaching implications for future work. Project Failure Ultimately, the worst case scenario for failing to adequately manage risk is that your project fails.

It never completes or never delivers anything of value.

What is a risk?

Incorporate risk management in your project controls so that you have early warning of when a risk could potentially cause a project to collapse. Implement robust escalation processes so that project teams know what to do when a serious risk is identified and who should be making the decisions about what to do next. It gives you an underlying support framework that heads off the impacts above, and provides a secure foundation for all of your project work.