Understanding risk management

One of the key aspects of project management is the identification, assessment, and development of plans to respond to any uncertain event or condition that, if it occurs, has a positive or a negative effect on the project objective. These events may impact the time, cost, scope, or quality of the project deliverables. Any uncertain event that can cause a negative impact is called a risk, while an event that impacts a project in a positive manner is an opportunity.

During the program planning phase, the risks and opportunities impacting various tasks in the project plan are identified, assessed for costs and schedule impact and identification, assessment, and development of response plans. During the execution phase, the risk management process consists of monitoring and control of program risks and opportunities. It includes identifying, analyzing, and planning for newly arising risks and the tracking, reanalyzing, and mitigating of already identified risks. In addition, the execution of risk responses is also reviewed to evaluate their effectiveness during risk monitoring and control.

As a program manager, during the execution phase of the risk management process, you can add new WBS elements in the program WBS to mitigate risks. These mitigation WBS elements can be estimated and approved. You can identify new risks and opportunities specifically for the program. If a risk or an opportunity (event) arises, you can incorporate its cost and schedule impact in the program schedule. You can then send the updated program WBS to the external schedule to update the network diagram and generate the updated schedule. All these activities can be performed without affecting the in-work tasks.