Common Project Risks and How to Resolve Them
Project risk management involves monitoring project performance from the start until project
goals are achieved to mitigate business loss or failure. Causes of risk vary throughout the project
lifecycle depending on project duration, complexity, or type (Muriana & Vizzini, 2017). The
primary goal of risk analysis is to determine potential risks and assess the potential consequences
at the planning stage.
The common risks I have encountered while at my current workplace included technology,
communication, health and safety, and operational and cost risks. The technology required to run
various projects represents a complex deliverable because it keeps changing and sometimes
could break down. The breakdown of computer systems or application software such as
enterprise resource planning (ERP), could derail project completion or increase costs. Many
times we have experienced system downtime leading to delays in operations. At the same time,
technology presents a significant threat to data security, information privacy, and compliance
(RiskX: Risk Management for Projects, 2017). Cyberattacks or system hacking can result in
extensive company losses through accounts embezzlement, lost reputation, or blackmail.
Technological risks can be resolved by troubleshooting or installing new IT hardware or
software. Consequently, it will need commencing the tendering process to procure the required
technology and personnel training to enhance effectiveness in system use.
Regardless of the project at hand, timely and effective communication is an essential work ethic
that must be strictly observed at all times. Setting prompt discussions with all project
stakeholders, including management, sponsors, and team members, helps track project progress,
monitor changes, reassignment of project tasks, and ensure team cohesion. As a result, a
communication breakdown creates confusion and delays project completion. For example,
failure to communicate promptly with management can result in delays in funding approval.
When participating in team projects, it is essential to outline engagement rules, including
outlining communication media and frequency. Scheduling weekly or monthly physical or
remote meetings with all stakeholders while maintaining open telephone, email, or WhatsApp
groups can minimize communication risks.
The health and safety of team members and other stakeholders are integral for successful project
completion. The workplace is typically characterized by occupational health hazards such as
carelessly exposed electric cables, rough surfaces, and defective equipment and furniture, which
could cause accidents resulting in physical, emotional, or mental harm and sometimes death of
team members. Health and safety risks can cause workers and customers to experience health
complications putting the company's reputation at risk. According to Muriana & Vizzini (2017),
every organization must ensure workplace safety and health measures are monitored and
assessed regularly to establish any potential risk that can result in court fines or medical expenses
due to non-compliance. The management must maintain continuous safety and health monitoring
of company premises, products, and services.
Mismanagement of project tasks and resources could increase project operational and cost risks.
Shortage of project funds is a common risk and the main reason why organizations cannot
undertake every profitable project proposed. Besides, inflation of project costs can also result in
resource wastage, while financial constraints can threaten project completion. As QualityGurus
(2013) notes, where the project costs increase beyond the budgeted amount, it risks consuming
funds allocated for other company operations. Alternatively, it might require suspending
expenses for the coming accounting period. This happened last year when funding of a staff
training program was postponed due to a lack of adequate funds. On the other hand, operational
risks refer to project threats associated with the performance of various project tasks. A project
could stall or get terminated due to poor implementation of core processes and essential
operations such as procurement or production. Such risks may result in direct or indirect business
losses caused by inadequate quantitative and qualitative processes. Operation risk can also take
the form of system/IT risks, direct process or human errors, indirect human and process errors, or
low financial capacity.
References
Muriana, C., & Vizzini, G. (2017). Project risk management: A deterministic quantitative
technique for assessment and mitigation. International Journal of Project Management, 35(3),
320-340.
QualityGurus. (2013, May 31). Introduction to risk management [Video].
YouTube. https://www.youtube.com/watch?v=Cp_XEhexcDw&feature=emb_logo
RiskX: Risk Management for Projects. (2017, August 24). RiskX: The risk management
process [Video]. YouTube. https://www.youtube.com/watch?v=bj0-
CoNgMoA&feature=emb_logo
