Also read Why You Should Manage Project Risks | Risk Analysis | Risk Assessment | Challenges in Risk Evaluation and Risk Response.
It is a systematic process:
Risk management is the systematic approach of using practices, procedures and policies of identifying, analysing, tracking, controlling, delegating and communicating risks.
It is an Art as well as Science:
Risk Management is a science as well as art. The science part involves identification, evaluation and prioritization of risks along with planned, organized effort to reduce, track and control the probability and impact of undesirable occurrence. The art part involves correct evaluation, prioritization and response planning. It is deliberate to mix science and art of risk management. The judgment of assessing & building risk response plan in its subjective part is an art but the systematic & repeated risk tackling approach with set of guidelines can evolve as a science. Like project planning, risk management evolves continuously.
At a higher level, risk management involves
Establish the Context: The important element in risk analysis (and of course risk management) is establishing a context. It involves, knowing what are organization’s objective, project’s objective, stakeholder’s expectations, etc. It also involves, understanding what differ from organization to organization, from one project to another, the eco-system and so on. Risk analysis is best done as a group activity with subject matter expert's advice.
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Also read Why You Should Manage Project Risks | Risk Analysis | Risk Assessment | Challenges in Risk Evaluation and Risk Response.
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