Risk Management in Project Management | Hubworks
It is easy to miss seeing the similarities between enterprise risk management and project management. Sure, you might already know that product management centers on the creation of something new, while enterprise risk management focuses on the termination of an existing threat. However, did you know that both can generate robust and efficient outcomes using timely processes?
What Is Project Management?
Project management involves mixing different activities so that you can deliver a project from the idea phase into the final development stage. Some of these activities include information distribution, timetable formulation, project initiation, change plus adjustment surveillance, and data collection during the windup of the project.
Needed Project Manager Skills
It is no debate that a project manager must have a mastery of the profession to achieve the set targets. Some of the skills you ought to have as a project manager are structural discernment of risk and threat mitigation. Possessing strong organizational skills will also come in handy in this line of work if you seek to implement the strategies expertly.
When Is a Project Team Necessary?
Need for a project team depends on the size of the project. For smaller projects, a single project manager can manage several obligations. On the other hand, larger projects need more attention to detail and achievement of several tasks.
With larger projects, the project manager must make sure that every deadline and goal comes to pass so that there can be ongoing progress and stability. For this reason, it is impossible to assume that one person may manage to juggle all these activities at once; this can often be where conflict resolution skills become invaluable. Thus, the project manager may need a team to work on specific areas. The team is responsible for the insignificant aspects of the project, meaning they analyze and report progress to the project manager for reviewing.
What Does Risk Mitigation Entail?
Successful risk mitigation requires the project manager to investigate the risk by determining, prioritizing, and tracking, evaluating potential impact, and materializing a program.
The Role of Project Managers in Risk Identification
Risk assessment is the assessment of negative and positive project risk. Positive risks hint at opportunities while negative ones point to probable negative outcomes. Achieving positive risks relies on the effectiveness of the project team’s plans.
For instance, to have the project completed before the scheduled time, the organization may have to incur some extra costs. But if the company doesn’t have the sales and marketing adjusted to this new timeline or production fails to meet increased demand, the opportunity causes financial loss and reputation risk.
Alternatively, if the project experiences too many glitches, project development may see a delay that will push activities behind schedule. If the sales and marketing miss to start their plans at this point, it will mean that customers will not get the product.
How to Create an Appropriate Risk Response
As a project manager, you can counter risk through avoidance, mitigation, acceptance, and transference. Avoidance involves terminating the occurrence of an event. It is a strategy that most, if not all project managers find hard to use. The reason is that you can’t dodge risks. As a result, most project managers end up transferring the risk.
Insurance policies are a great example of ways people transfer risks. People buy insurance policies to shift the cost of an occurred accident. In other situations, project managers acknowledge the need to accept the risk.
Risk acceptance requires you to recognize the risk while also performing a cost-benefit analysis. When the chances of an event happening are less compared to proceeds generated by the project, then it is worth accepting the risk. For instance, if there is a high market demand, the project manager may opt to push deadlines forward and accept the risks of missing to meet them.
Lastly, risk mitigation has the project manager evaluating the risk’s possibility while determining strategies that could reduce the potential outcome. In the context of a tight deadline, project managers can opt to postpone the marketing deployment strategy as a means of managing the risk.
How a Project’s Lifecycle Translates to Compliance
Agile development is a significant aspect of a project’s lifecycle. Simply put, agile involves transacting in a series of principles and values within project evolvement. Its twelve core concepts include-
1. Communication across shareholders
2. Customer satisfaction
3. Providing continuous enhancements
4. Gauging progress
5. Promoting sustainable development
6. Maximizing efficiency
7. Providing employees with a favorable working environment
8. Changing requirements
9. Constantly reflecting on efficiency
10. Dispatching information across stakeholders
11. Creating necessary architectures
12. Steadily delivering working software
These are the twelve core requirements required during software development. Goals set will only come to pass when you have appropriate tools in place. When you view compliance as a project, you will need to devote yourself to similar agile processes, which involves incorporating specified tools.
The process of agile development integrates the risk management operation by regularly evaluating the project’s metrics. Doing this ensures that the production targets and the risk mitigation strategies coordinate. Just as in the same way compliance necessitates that risk mitigation strategies provide firms with preservation from negative risks. Considering compliance to be similar to the project simplifies ways to streamline the process.
Automation and Making Compliance Agile
When companies compare compliance with a software product project, they get ways to integrate agile strategies and to intensify their compliance standpoint. As a vendor, you cannot miss having compliance. Now that vendors can supplement their customer’s risk profile they ought to present continuous monitoring so that they can build the customer’s trust. It is simple to meet the SOC 2 and 3 requirements. Through automation, you will help your company to receive worthy audit results.
It is also important to keep watch for the information security space. Now, information security has seen an increasing number of hackers who persist to exploit gaps. You can make sure that your company regularly reviews risks to determine their competitive advantage. Automation will give instant insights regarding the compliance risk landscape.
A fantastic way to support the compliance project is by providing communicating tools and motivating shareholders. Keep in mind that just as the project manager shares project’s metrics across departments is the same way a compliance manager will have to communicate to the relevant parties. Automation gives employees role-based authority within the organization. It simplifies the breakdown of information allowing for easier communication, thus leading to efficient compliance management.
The compliance managers rely on audits and self-assessment as a way of reflecting upon the effectiveness of their controls. Automation enables compliance managers to get insights that help them compare the controls across various frameworks, regulations, and standards to verify if the compliance decisions leave the company at risk or not.
Just as project managers have a variety of tools to support agile development, compliance managers should also get to do the same. Often compliance managers must rely on worksheets and shared drives to meet their duties. If the organization wants compliance managers to deliver and manage their roles efficiently, they need to provide them with tools.
Written by Ken Lynch
Ken Lynch is an enterprise software startup veteran, who has always been fascinated about what drives workers to work and how to make work more engaging. Ken founded Reciprocity to pursue just that. He has propelled Reciprocity's success with this mission-based goal of engaging employees with the governance, risk, and compliance goals of their company in order to create more socially minded corporate citizens. Ken earned his BS in Computer Science and Electrical Engineering from MIT. Learn more at ReciprocityLabs.com.