Project Risk Assessment (PRA)
Risk to a project is an uncertain effect which might hinder the smooth running of the entire system. It might cause a positive or negative impact either to the different objective which in turn might affect the whole project.
Significance of Project Risk Assessment study
Project risk assessment or simply risk management can be considered as a way of foreseeing the probable risk that might arise during the course of time. This prediction will also provide us a head start on how to tackle the same with the limited resources. This system helps to identify, analyse, respond and also helps to monitor project risk.
Project risk assessment is conducted at the early stages of the project. The study has a predefined process methodology, tools and techniques which will help to maximize the probability and results of positive events. Thus minimizing the probability and consequences of adverse events as indicated and appropriate within the context of risk to the overall project objectives of cost, time, scope and quality
The basic steps for the risk assessment study can be categorized as
- Identify the risk – At this phase the potential risk that the project might face are identified, described and recorded
- Analyse the risk – Here the likelihood and consequence of each risk is determined
- Evaluate the risk – At this phase the magnitude of each risk is to be evaluated and the decision that to which risk treatment is required are chosen.
- Treat the risk – In this step, the risk with highest rank is treated by setting out a plan which includes the mitigation strategies, preventive and contingency plans.
- Monitor the risk – This phase extends through the entire life cycle of the project keeping the risk monitored and reviewed.
The study will be conducted by a team of professionals following the above mentioned methodology.
Some of the risk types identified by the project risk assesment will be,
- Risks for design
- External Risks
- Environmental Risk
- Project Management Risk
- Engineering Service Risks
The actual risks to be identified will be project specific. Uncertainties are the reason for the possibility of risk. The probable sources of uncertainty, which might lead the project to a risk can be broadly pointed as,
- Poor estimates of time and cost
- Lack of a clear specification of project requirements
- Ambiguous guidelines about managerial processes
- Lack of knowledge of the number and types of factors influencing the project
- Lack of knowledge about the inter dependencies among activities in the project
- Unknown events within the project environment
- Variability in project design and logistics
- Project scope changes
- Varying direction of objectives and priorities.
A detailed project risk assessment study will help the project engineer to overcome these causes of risk which might arise during the project life cycle.
In short, the project risk assessment will help in minimizing, monitoring and controlling the probability consequences of unfortunate events by the identification, analysis, and prioritization of the risks through coordination and economic application of resources which in turn will maximize the success of a project.