Risk Mitigation in Project Management

You’re probably aware that whenever you start a new project, there are always challenges and risks associated with its processes. However, if you choose the right strategies, you can mitigate these risks and prepare yourself for any of the consequences.  

Risk mitigation is a strategy used to prepare and prevent the effects of threats to your projects. Your team might implement mitigation strategies to identify and monitor risks while using actions to deal with risks and the effects of those risks on a project.  

There’s never really been a perfect solution for anything, yet if you put enough energy into your strategy to prevent risk and negative outcomes you can typically see positive results. Incorporating a risk-based approach is an intelligent way to navigate your projects.  

Risk-based decisions in your firm are designed to consider the consequences of inaction or what would happen as the result of a particular action. However, only when your risk management program is formalized correctly can you prepare for anything that is to come.  

In this blog, we will explore some of the most common risk mitigation strategies and how they might be used in your firm. 

Risk Monitoring 

Using project management software, such as BQE CORE, can help you monitor your projects for risks and consequences in many effortless ways, including watching for and identifying changes that can affect the impact of risk. This can be done through production teams doing a standard project review plan.  

The following shows ways you can monitor and evaluate risk and consequences that impact a project:  

• Monitoring cost: Your team can implement center control methods that find issues with your project’s budget. An example would be in the early decision-making process or finding issues in the original funding for the project. Taking a deeper look this early on can give insight into how funds are delegated, prevent going over budget, and help you act right away to reduce spending or get rid of a resource that is too costly.  

• Monitoring schedule: You also want to consider time management strategies to control any risk that arises with project scheduling. An effective way to do this is by diversifying tasks and the time it takes to complete them through the project team. These methods can include time tracking- specifically seeing how long it takes your team to complete each task and then assigning specific tasks according to the time involved with each task.  

• Monitoring performance: Here you want to apply risk control strategies such as managing and directing your team’s daily tasks, controlling the quality of new products, and looking into control issues affecting your project’s overall performance. 

Risk Avoidance 

Another risk strategy to look at is the avoidance strategy. This strategy shows the accepted and assumed risks along with consequences of your project. It also presents opportunities for avoiding these risks. The best way to go about this is to plan for risk and then know the steps to avoid it. For instance, you’ll want to implement product testing when using a new product to avoid the risk of the new product failing. 

Here is how you can use the risk avoidance strategy: 

Avoiding risk to performance: Risks to performance can include insufficient resources or inadequate design. Mitigation of performance risks can allow your team to discover how to avoid these risk situations that cause issues to the project’s performance- such as testing more durable product materials to avoid product failure.  

Avoiding risk to schedule: Here you want to identify issues that could affect the timeline of your project. If you’re overly optimistic about the timeline of a project, you could affect important deadlines and due dates. An avoidance strategy helps by allowing the team to plan ways ahead of time to avoid schedule conflicts by creating a managed schedule that shows time allowances for planning, design, testing, and making changes. This ensures you know all of the time needed and don’t get delayed and miss important due dates.  

Avoiding risk to cost: A good example of a strategy for risk to cost is getting your team to outline all anticipated costs as well as costs that could come up. This helps prevent going over budget.  

Risk Acceptance 

While risk acceptance doesn’t reduce any effects, it is still an important strategy. This is necessary when other risk management options outweigh the cost of the risk itself. If you don’t want to spend a lot of money avoiding risks that will probably not occur, you could use the risk acceptance strategy.  

A risk acceptance strategy looks like the following: 

Accepting risks to cost: Your team might identify and accept the risks to the project budget and in return make plans to lower the risk of going over budget, making sure that all team members are aware of this risk and its consequences.  

Accepting risks to schedule: Here you accept risks that can impact scheduling, such as making sure to keep the project on track to meet your deadlines.  

Accepting risks to performance: These risks can involve team productivity or product performance. You want to identify these risks and accept them as part of your project planning, so everyone is aware of the potential risks.  

Risk Transfer 

For the risk transfer strategy, you transfer the strain of risks and consequences to a third party. However, you want to make sure this is acceptable to the other party.  

Examples of risk transfer include: 

Risk transfer for performance: If you're working with a new product that appears defective due to issues from an outside vendor, you can either choose to assume the consequence and work with resolution strategies or you can transfer this risk and its consequences to the outside vendor and require them to cover the costs.  

Risk transfer for scheduling: If your project is taking longer to complete, you can shift the issue of being behind to the team members that handle time management instead of to the whole firm. That way the design team can continue to focus on the rest of the tasks.  

Risk transfer for cost: For issues in budgeting, you can transfer this risk over to accounting. If a project goes over budget, the consequences can be transferred over to the accounting team responsible for tracking the budget while the production team continues to focus on their work. The accounting team is then responsible for fixing the cost issues. To prevent going over budget and always ensure you’re tracking your financing in real time, use project management software that includes accounting features.  

Risk Mitigation in Project Management by BQE CORE 

It’s important to have a risk mitigation plan ready. A risk mitigation plan helps you uncover what is happening throughout your firm and can give you an exact picture of where your strengths and weakness lie. That way you can see where something isn’t working as it should be and before it becomes a bigger problem you can improve it.  

BQE CORE is firm management software designed by the A/E industry for professional services industries. Our software includes project management, accounting, time and expense tracking, HR, and billing features all on one customizable dashboard. This means you can have a real-time view into your projects and easily manage risk and consequences before they happen.  

Schedule a free demo today to see how BQE CORE can help your firm create a risk mitigation plan and keep your projects running on track.