Risk refers to future conditions or circumstances that exist outside of the control of the project team that will have an adverse impact on the project if they occur. Whereas an issue is a current problem that must be dealt with, a risk is a potential future problem that has not yet occurred.
A reactive project manager addresses issues when they occur. A proactive project manager addresses potential problems before they occur. This is the art of risk management.
Not all issues can be seen ahead of time and some potential problem that seems unlikely to occur, may in fact occur. However, many problems can be seen ahead of time and they should be managed through a proactive risk management process.
Everything in life has some degree of risk. Walking across the street can be risky. Your projects have risks as well. The project manager should perform a risk assessment with the project team and the client to identify high, medium and low level risks. If you are lucky, you may find that you only have low risks. However, this assessment will alert the client and the project team to any medium and high-level risks that may cause future problems.
Identifying risks on your project is not necessarily bad, since risks are common to all projects. All projects have some degree of risk. Projects with a higher level of risk require more rigorous risk management and more management focus. Although not all risks can be eliminated entirely, most can be anticipated and managed ahead of time.
The purpose of risk management is to identify the risk events for a project and then establish a Risk Management Plan to manage the risk event and minimize harm to the project. In the TenStep process, the first time you perform a risk evaluation is in the 1.0 Define the Work step. Additional risk identification should occur throughout the project on a scheduled basis or at the completion of a major milestone.
Risk management is a service offered by Karvy Private Wealth to take a complete view of various risks facing the family and to actively provide for the same. The service is intended to identify, quantify and mitigate these risks.
Taking insurance cover is an important component of overall risk management. However, often families face the unidentified issue of insufficient cover, outdated calculations of cover requirement, leaving some risks uncovered (e.g. property). Hence we believe that having some insurance policies is not same as having done careful risk management.