Describe what needs to be done to manage risk on a project. When should this be done? How can a risk assessment matrix help in this process?

Describe what needs to be done to manage risk on a project. When should this be done? How can a risk assessment matrix help in this process?

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July 2, 2021
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Describe what needs to be done to manage risk on a project. When should this be done? How can a risk assessment matrix help in this process?

Answer and ExplanationSolution by a verified expert

Explanation
A risk can be managed by carefully identifying, assessing, monitoring, and responding to the risk. An individual can follow these steps in the given sequence to ensure that the risk is sighted at the right time and is taken care of with minimum damage.

The steps involved in risk management are:

Risk Identification: It involves the recognition of the presence of a risk. If one fails to see that there is a risk present, the process of risk management cannot move further.
Risk Assessment: It involves a detail analysis of the risk including when, why, and how it originated. It helps the team to understand the cause of the risk so that it can be minimized.
Risk Monitoring: It refers to the continuous observation of the risk and the changes that take place along with the steps taken by the organization to mitigate the risk.
Responding to Risk: It means that the team must also look out for risks that are not present right now, but may arise in the future and respond to them accordingly.

The best time to address a risk is by starting the risk management at the very beginning of the project. It makes the team prepared for such a risk and this proactive behavior can help find and manage the risk efficiently. Risk management or addressing risks should have a proactive approach as it increases the chances of decreasing the effects of the risks involved.

A risk assessment matrix is like a table for evaluation of potential risks. The table lists out the possible risks that can occur, their potential impact, probability of occurrence, trigger points for action, person responsible for taking actions, and the response plan to be initiated. It helps the project management team to assess and understand the risk better.

Sample Response
Risk management can be done to reduce or manage risk by following these steps:

Risk identification, which refers to spotting of risk.
Risk assessment, which refers to a detail analysis of risk.
Risk monitoring, which refers to constant observation of risk.
Responding to risks that could emerge in an upcoming project.
Risk management leads to minimization and reduction of probability of occurrence and impact of adverse events on the outcomes of the projects.

The process of risk management should ideally start during the planning phase of the project and continue throughout the project.

A tool for assessment of such risks is a risk assessment matrix. It is also known as a risk register. The matrix gives an overview of factors, such as the impact of the risk, the likelihood of occurrence of the risk, and more, which helps to manage risk better.

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