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.

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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