Risk management is a business process for a business to manage uncertainty risk and reduce the possibility of a financial loss. Apply the risk management techniques help the project reduce risk and has a probability and a positive impact.
First, organizations must identify risks,getting information interviewing, learning from past project, investigating what happen on similar project in the past and evaluating cost and schedule. Known unknowns--know there's potential risks will damage the project and prepare for it. For example,overrun costs,not accurate analysis,unreliable team members,and inefficient manager. unknown unknowns--unexpected risks always happens. For instance, nature disaster. Second, analyze, record the result of the risks and deal with the high impact and high probability first. Third, develop best way to reduce risks. For instance, accepting, avoiding, monitor the risk, predict plans, transfer the risk which is to purchase insurance or use a contract for service,and work had to reduce the risk. Forth, set up contingency and reserve which is prepare additional contingency budget and is used only for overrun costs. Fifth, constant aware of the existing risk and check for new risks at regular basis, continuously eliminate risks before they become problems.
Risk management allows you to examine the risks that you or your organization face
and decide what actions to take in order to reduce the risks and prevent crisis.
The work breakdown structure is the tool for breaking down a project into small parts of tasks called work packages. This tool gives each part of project a different priority and matches its level of importance to its place for each project piece. WBS is the foundation of project planning. The purpose of WBS is the help the project more accurate,specific defined and organize the scope of the total project. Also, WBS helps to monitor,assign responsibilities,control budget,quality control,scheduling and resource allocate the project. So, the project team will have the clear idea of what has to be accomplished within each deliverable. It is very important to keep WBS as simple as possible.
