The first thing to understand in risk management is that it's an on-going activity. It's not about identifying risks upfront and then forging ahead regardless. It's too easy to forget the risks once the project is started, and fail to recognize and raise new risks when the project is underway.
The key steps to risk management are summarized below:
Risk Assessment
Risk Reduction / Minimization / Containment
Risk Monitoring
Risk Reporting
Risk Evaluation
A key part to project management is a common language. The diagram below shows the key steps of risk management in the overall context of analysis and control. As outlined in the introduction, there are two key outcomes for risk management, action and awareness. Through risk control, we manage action; through risk analysis, we manage awareness.
The diagram below shows the breakdown of risk management. On the left, we have risk analysis, which comprises reviewing risks, evaluating risks, and reducing risks. This is the...