Risk Management Principles – Things You Should Know About It

Risk management is one of the most important aspects of project management since it is what allows minimizing the impact of threats and taking advantage of the opportunities that arise, thus increasing the chances of success.

This makes it easy to deliver the project on time, on budget, and with the quality demanded. It also facilitates the management of the work team, since the team members do not enter the mode of "put out fires" and avoid making decisions on the fly.

Risk management principles:

This principle is essential for the success of risk management of a project and tax management is also important in the project since without it, the full benefits of this approach cannot be reaped.

This means that it is useless to identify and record the risks if there is no formal follow-up of these and of the actions during the execution of the project. Although it seems obvious, it is something that happens in some companies, which end up identifying the risks only to be able to say that they follow a certain methodology or standard.

To facilitate the management of risk properly and integrate it into other project processes, there are different tools. Let us understand why the management of risk and tax is essential in a project.

Reduce errors and avoid rework during execution:

The identification of risk requires an open mind that can focus on future scenarios that may occur, applying the different techniques explained in many articles you can find on the internet. But since the business owners are busy handling the business operations you can hire professionals who are experts in risk and tax management. And once a risk has been identified, it must be documented by registering it in the risk register which will allow its monitoring.

Risk management principles – Understand risks:

Although this should be part of the risk identification process, many times it is not, and we are left only to identify the risk without really understanding its origin and consequences.

Understanding the origin of risk will allow us, on the one hand, to better define preventive actions, and perhaps, to be able to detect it in an earlier phase, saving costs and rework. For example, if we know that a certain critical component may fail due to an error in the material, it may be more efficient to test the material with a specimen before manufacturing it than to test the already manufactured component before its installation.

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Risk Management Principles – Assign Responsibilities:

Different individuals participate in risk management, each one with their role and responsibilities ( do you want to know these roles and responsibilities? ), additionally, the specific actions that are defined must be executed by a member of the team. All this requires a clear assignment of tasks and responsibilities, in such a way that both the individual and the organization know what each one does.