How can I setup risk management in my company?

All projects are different, require their own approach and have unique areas requiring specific attention. The steps described here help you to setup project risk management in such a way that it best suits your project.

1 Consider project risk management.

The first question a project manager should ask is whether formal risk management is useful. The added value of risk management depends on two key project aspects:

Novelty: if a project is more novel, its risks are higher. Novelty can be connected to business functions like marketing, sales, distribution, product development, purchasing, and production or connected to subjects like technology used, customers, or rules and regulations.
Complexity: a complex project is riskier. Complexity is a function of the number of parts, their diversity and the needed coordination between them. Complexity may occur in different areas such as the project team , involved departments, suppliers and customers or project deliverables.

Preferably risk management would be introduced near the start of a project, when a lot is known, but not everything is carved in stone.

2 Make project choices

A project manager has to decide what project areas require most attention and what risk tolerance is acceptable. Examples are ranking the importance of project attributes like costs, completion time, quality and scope. Risks that have an expected value over a certain threshold may require special management attention.

3 Organize project risk management

The project team has to determine who will take care of the different elements of project risk management. Also they have to agree on the tools and risk metrics to be used.

How can I setup risk management in my company?

1 Consider project risk management.

2 Make project choices

3 Organize project risk management

other questions about project risk management