Project Management Software and Risk Management

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Including the risk management process into your projects with project management software can be as easy as adding one additional column.

There are many knowledge areas in the discipline of project management. Knowledge areas include Project Scope Management, Project Cost Management, Project Communications Management, Project Quality Management and the list goes on. One of the knowledge areas is Project Risk Management. While it is difficult to say which knowledge areas are more important than others it is fair to state that Project Risk Management is vital and applicable to projects of any size in virtually all industries.

The Capabilities of Project Management Software

Project management software has many capabilities, these include helping Project Managers identify, qualify, quantify, monitor and control risks. The application can be leveraged to manage project or program risks in ways that are entirely consistent with the associated practice standard. Fortunately the software has been developed in ways that allow this functionality to occur seamlessly.

We can take each step of the Risk Management process to see how the software facilitates the management of risks in programs and projects. The first step in the process is identification. There are a few ways this can take place: Add a risk column in the schedule, check off any activity in doubt and when the team reviews it ask them to provide input (validate or invalidate the risk) in the comment field, the content of this column can by hyperlinked to a spreadsheet that has more detail, a document with potential risks can be circulated to the team for comments using the software and in these same ways team members or team leads can add risk items or flag risk issues to scheduled activities.

Managing Risk with Project Management Software

The qualification of risks can be simplified to a simple Very Low, Low, Medium and High scale. Risks qualified as Very Low need not move on the next steps. Team members from the different functional groups can qualify identified risks within the comments field of the schedule, the spreadsheet hyperlinked to the risk column in the schedule or the risk document within the application.

The next step in the risk management process, after identification and qualification is quantification. Quantification of a risk takes many forms. Quantification may be one, more or a combination of the following. Types of impact include the risks financial impact, schedule impact or resource impact. There are distinct methods to calculate each type or combination of impacts. Using one or more of these methods the calculated quantified impact or impacts can be documented in the software.

The monitoring and control steps refer to the project manager’s obligation to continually oversee the status of the risk and to observe how the strategy to manage the risk is working during the control step. Monitoring and control, the final two steps in the risk management process can be easily done through the project management software.