Measuring and quantifying risks are inherent to organizations. They basically fall under risk assessment, which is imperative for businesses that have complex structures and processes.
Risk quantification allows you to analyse the critical nature of risks and allot adequate resources to manage them. Risk management is deeply dependent on risk metrics. Risk management objectives, improvements in risk control, the success or failure of a risk measure can all be figured out through risk metrics.
Risk metric heat maps are created considering certain parameters, which are:
Which risk assessment approach do you choose?
Residual or net risk assessment and inherent or gross risk assessment are the two different risk assessment methods used. Either one or both may be used in an organization depending on how one perceives the business situation.
Net risk assessment is used to evaluate risks that persist even after controls and mitigating measures have been implemented. Gross risk assessment is used to assess risk levels before enforcing treatments and mitigating controls.
Risk assessment best practices suggest that both the approaches have to be combined to develop effective risk assessment programs.
Wondering where to start?
Assessments are performed differently in different organizations.
A few organizations take account of the processes at first, while others focus on strategic risks. The latter method when used as an initial risk driver, works effectively to align processes and operations in line with business objectives. This practice is preferable to tuning organizational strategies based on business functions, which is the model followed in process risk assessment.
So, what is the next step?
You might have a clear perspective of the risk management approaches and established the focal area in your enterprise. There are two components of risk assessment that need enough time and thinking to plan appropriately.
•The control measures carried out have to be monitored to identify defects and drawbacks. It is attained through reviewing and evaluating the effectiveness, design and performance of action plans executed in governance, compliance and risk management in your organizational system.
•Identify the individuals accountable for managing each risk. They are the owners of the risk controls as well.
Time to score…
Risk scoring has changed considerably since the early days. It used to be one-dimensional and risks were ranked depending on criticality.
With risk management evolving, we have learnt to analyse risks and risk controls based on their probability and impact.
There are different styles of scoring risks; an uncomplicated method is to score risks as low, moderate or extreme.
Treat risk events and risk controls individually
A risk event is the core focus of risk and control assessment.
Risk causes and consequences can vary in each situation, but risk events remain constant. Build controls to manage risk events instead of administering controls over altering factors.
Similarly, with risk controls, it is better to segregate each control technique and analyse the effects. Assessing an assemblage of controls working towards the same or different objective can be complex. Each control may function at different levels and for different risks. Looking at controls individually helps in generating clearer understanding about their effectiveness.
Ameera Tabassum is an ACCA Affiliate. She has diversified experience working as Business Process Consultant for an Audit solution company in the Uk. She has over 4 years of experience in ERM risk solutions and as a practicing manager of Business analysts successfully executing several projects in terms of Risk management strategies, ORM Software solutions and Governance risk compliance.
What do you do when you’re assigned a project that looks complicated?
How do you manage it?
The truth is that you don’t have to be a certified project manager before you can efficiently manage the 3 vital components of a project: team, time and tools.
There are so many online resources for project management. But what you need right now are concise action tips to get the job done. This post will inspire you correctly, and guide you when managing complicated projects.
You’ve to follow the 3-step approach when managing complicated project. And they are:
Understand the project scope
You can’t successfully manage a project you don’t fully understand. The core question to answer is: what are you trying to achieve at the end of the day? That’s the scope.
You might assume that you need state-of-the-art tools, people and time to effectively get results, but oftentimes, what you need the most is a ‘strategy.’ This is because the best project management software out and trained team will not suffice, if your strategy is weak.
If you take orders from someone, it’d be nice to clarify the scope of the project first, before moving forward. If you’re not sure of what must be done, ask questions.
Simplify the whole process
No matter how complicated the project might seem, you need to break it down.
Here’s a typical example: if you’re writer, you know that every post you write has a specific category it’d fit in. For instance, this post would likely be published in a category that’s relevant to project management tips.
When you simplify the whole process, you can easily assign a manager to each smaller unit, and get concrete feedback on the progress.
Don’t embark on a project that scares you, because whether you believe it or not, the outcome will not be pleasant. Time and efforts will be wasted if you don’t simplify.
According to Jean-Lin, Unilever Australian Chairman, “you’ve to make your business tasks simpler, because that’s the quickest way to eliminate unnecessary work, make people more effective and lift your company’s business performance.”
Track your team’s progress
Do you track what your team is doing? Remember that by simplifying the whole process, you were able to assign managers to each unit. Now, it’s time to monitor their progress.
When you receive feedback, don’t treat it lightly because an issue that’s neglected could mar your progress.
Communicate efficiently and develop a two-way communication culture – when you send a question or an issue to be discussed, the project managers must respond as soon as possible. Every response counts. Always remember that.
Over to you
There you’ve it. If you use your time and resources well, coupled with well-trained team, you’ll be able to manage complications in any project, and save a lot of time, too.
However, becoming successful in project management may not happen overnight – you have to be consistent and never forget that effective communication with your team is the key to winning.
About – Michael Chibuzor is a certified small business consultant. Since 2012, he has trained 1000+ start-up entrepreneurs on how to use CRM business solutions to communicate with customers, and increase sales. To learn more, visit http://queryletters.com
It’s the end of the year, and the focus for your team might be more on the holidays than on completing your project work. In fact, project deceleration – where progress on the project work slows down – can happen at any time, not just year end. Here’s what to do if you think it’s happening on your project.
1. Notice it is happening
The first thing to do is to notice that your project actually has a problem. You should be tracking project progress regularly and if you do that you’ll be able to see that work isn’t getting completed by your scheduled completion dates.
You could use more complicated methods to identify deceleration but gut feel works too: when you’ve missed several delivery dates and you’re noticing a slippage across all tasks (not just one that has turned out to be more complicated than expected) then your rate of work is decelerating.
2. Identify the cause
Now you know you have a problem it’s time to think about why this might be happening. There could be any number of reasons but some common ones are:
- Project is lacking executive attention
- Project team have higher priority work to do on other initiatives
- No push from project sponsor or project manager to keep work ticking over
- Lip service being paid to how important this work is. Read more »
1. Set a baseline
You can baseline requirements, costs and pretty much anything else on a project but it is most common to think of scheduling when you think about baselines. Baselines help you see what you thought you would do and allow you to compare that to what you actually did.
2. Managed risk
Risk management is a core project management process and if you managed risk successfully this year you should have hit fewer problems and those you did encounter would have been smaller.
3. Logged decisions
Savvy project managers record decisions taken, not just in meeting minutes but also on a separate log. It’s a great quick reference guide when you want to remember why you took a certain path.
4. Held team meetings
Team meetings can be informal or formal, face-to-face or virtual. The most important thing is that you had some!
Project managers need to be able to manage dependencies because otherwise project delivery is at risk. If you don’t know what items your project relies on from other projects or teams, you can’t plan and manage that work. It falls outside of your project, but not your sphere of influence and it’s important to control dependencies as far as you are able.
Of course, some dependencies also fall within your own project: these are the ones that other project managers are relying on. While your project might be able to succeed regardless of the situation with these tasks, the business as a whole requires you to work with other projects and take a holistic view of how all projects fit together.
The first step in being able to manage something is being able to identify it. A workshop is a good idea: invite other project managers from your programme or department and work together to see how your projects interact. Your programme manager, if you have one, will be in a perfect position to facilitate this discussion. However, many project divisions don’t have programmes structured like that, or you may believe that your project has dependencies on or with a project that falls outside of the programme. So ask around widely and involve the necessary parties.
You can discuss dependencies within your project at a scheduled team meeting. Get your team together and talk about how their tasks relate to one another. People should be clear about what role they have in ensuring tasks are delivered on time, especially when other people are waiting on them to complete their work. Read more »