Hi Paul,
Can I please have some feedback on the following question?
Many thanks again for your help.
List and describe five benefits to an organisation of adopting a formal risk management process.
1. Probability of risks occurring can be reduced
2. To ensure contingencies are in place
3. Consistency throughout the organisation
4. To ensure roles and responsibilities for handling risks are clear
5. So the sponsoring organisation enter each project with clear perspective of risks
1. Probability of risks occurring can be reduced.
By adopting a formal risk management process, risks will be identified at the beginning of the project rather than waiting for them to happen and then having to deal with them when they are already issues. Part of a formal risk management process involves assessing the probability of a risk against their potential impact using a probability impact grid. Once the risk has been assessed a response can be planned in which what can be done to reduce the probability of the risk occurring can be explored. Without a formal risk management process such mitigation will not have been explored leaving the project more susceptible to failure.
2. To ensure contingencies are in place.
In addition to mitigation actions being taken, contingencies will be put in place which will document how to deal with risk if it still occurs. By having contingency pans in place the organisation will be better equipped and ready to deal with issues should they arise. For example, a contingency budget could be set aside which would be disbursed by the sponsor if necessary, this again gives the project a better chance go success in cases of risks materialising.
3. If an organisation adopts a formal risk management process it means there will be consistency throughout the organisation. This means that every project will know the process that needs to be followed and less resource will need to be used preparing the risk management plan. Templates from the process can be used by each project – for example a template risk log or probability impact grid, meaning there is a consistent approach throughout the organisation and best practice will always be followed.
4. To ensure roles and responsibilities for handling risks are clear
In adopting a formal risk management process – everyone involved will be aware of each other’s roles/ responsibilities when it comes to managing risks. Part of a risk management process will be a risk log which will include assignment of an owner to each risk – this is the person who is perceive to be best placed to manage the risk. With this documented there is no uncertainty over who is responsible for what.
5. A formal risk management process ensures that the sponsoring organisation can enter into each project with a clear perspective of the risks involved. This means they can be safe in the knowledge that all avenues have been covered and due process has been followed. They can then make decisions with regards to the project will all the information they need, and what potentially could go wrong. If/ when issues arise they should not be a shock to the organisation as they would have been formally captured in the risk management process and the organisation will be well equipped to handle them.
This is a very good answer to this question. Plenty of detail that demonstrates a good knowledge of the questions. Well Done.