If you have gone through my previous post of Risk then this post will help you to identify and make a prevention plan. Also, I will try to cover thoughts coming to your mind while reading the post. But I would suggest to go back and read “What is Risk?” post if you have landed on this page directly.
What is Risk Management?
Risk Management is an important part of every project. Every project has to face many risks during the development and because of that business has to suffer.Risk Management is the process of identifying, assessing and prioritizing the risks. Following could be the reason of risks
- Financial Market Clashes
- Natural Disaster
- Legal Issues
- Intentional Damages.
In Risk Prioritization process risks with the biggest loss and high chance of occurrence are taken care first, and risks with lower loss and lower chances of occurrence are handled in last. Risk Management contains the Mitigation planning and Contingency Planning. So their study is also important.
What is Risk Mitigation Plan?
While dealing with this topic, you must understand the aim of this subject is to bring the risk exposer within the permissible limit. Risk Exposer I mean to say that the probability of occurrence and its impact on the project. So I would suggest, calculate the probability of occurrence and its impact on the Project in an early stage of development so that you can draw a proper mitigation plan. Mitigation strategic plan must contain the advance action or proactive action against the risk.
What is Contingency Plan?
Contingency Plan is the process of identifying the risk responses using contingent response strategy. Identified contingency responses will be executed only when some risk are expected to occur. There should be some defined limit of warnings on which the contingency responses will trigger. It is not like that for every warning you start executing the contingency responses.
An example of Risk, Mitigation, and Contingency.
Risk: You are visiting marriage ceremony of your best friend. While travelling, your car may face some technical problem due to which it will not move ahead.
Mitigation: To avoid risk, what you can do? You can ask someone to follow you so that if the risk occurs you can take a lift in another car.
Contingency: Think of you left for the ceremony by considering some buffer time, In this case even your car is in trouble still you can rich the ceremony place by local transport. As you already have some extra buffer with you.