Project Risk Management: Definition, Steps and Template

One of the inevitable tasks project managers have, as part of any project, is risk management. While managing risks can sometimes feel complex, developing a structured approach can make it more manageable. In this article, we’ll explore the impact of a risk management plan and provide key insights to help you and your team manage future projects more successfully. If you are looking to strengthen your skills in risk management, enrolling in project management courses will equip you with practical strategies for identifying, assessing, and mitigating risks.

Definition of Project Risk

According to PMI, project risk may be defined as the chance of certain occurrences adversely affecting project objectives, the degree of exposure to negative events, and their probable consequences.

As a result, the project risk is defined by three risk factors:

1. The risk event or identification (what can possibly happen to harm the project)
2. The risk probability (how likely is the occurrence of the event)
3. The amount at stake ( what could potentially be lost).

Identifying, analysing, and responding to risk factors throughout the whole project process (and in the best interest of its objectives) is defined as risk management.

A risk factor is a situation that may induce project risks. It increases the chances of something happening that will stand in the way of your project objectives. The impact of a risk factor should be calculated for in the risk management plan. Each stage of a project life cycle can pose new risk factors for your project.

3 Common Types of Project Risks  

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