Risk and Opportunities Management

In project management, uncertainty is a common parameter, given that projects are unpredictable and only an estimate of a future situation. In order to prevent uncertainties, project risks are identified, managed and addressed throughout the project life cycle. Risk management is a central concept and plays an important role in maintaining projects stability and success throughout the project. Risk management identifies potential obstacles that may arise and hinder the project team from achieving expected goals. Identifying risks is a repeatable process since new risks become known and others become unknown. Noteworthy risks are not only downsides, referred to as threats, but also upsides, referred to as opportunities. Opportunities may arise as a result of unexpected turns and have a positive impact on the project. Risk management is highly relevant and therefore present in all projects. By using qualitative and quantitative risk management approaches, uncertainties are identified, assessed and mitigated in a structured way that helps projects stay on track. This article focuses on Rumsfeld’s unknown unknowns, the failure mode effect analysis (FMEA) and the risk management process, including the probability impact matrix. The FMEA considers three parameters: likelihood, severity and hideability and is an approach applied to establish the ranking of risks. The risk management process consists of seven process steps: communication and consultation, establishing the context, risk identification, risk analysis, risk evaluation, risk treatment and monitoring and review. This process aims to ensure that risk is managed effectively, efficiently and coherently across an organization (ref.). At last, this article will outline and discuss the different approaches’ limitations and advantages in a project management aspect.