The business environment has become more unpredictable and profit margins have drastically come down. Organizations now need to manage their risks more effectively to sustain in this competitive environment. It will be helpful for them to take proactive steps to avoid problems. The author describes five steps of risk management process. They are risk identification, risk analysis, risk prioritization, risk planning and risk monitoring.

Project risk management is a process of identifying potential surprises up front and managing them throughout the project to diminish their likelihood or impact. We will not be able to avoid every potential pitfall that might threaten our project, and some are truly unknowable in advance. But with explicit attention to project risk, we can improve our odds considerably.

The key to managing risk is being proactive about it. many risks are half when known in advance, but often they are dismissed in the rush to get on with the "real" work of the project. Risk management is simply a matter of acting explicitly in advance to prevent a risk or diminish the risk's consequences. Being proactive is easier for some individuals and organizations than for others. The opposite of being proactive is the "fire-fighting" behavior that many managers enjoy and some organizations reward tacitly. If the organization embraces fire-fightingdealing with problems only when they become crisesproactive risk management will be more challenging to apply.

As business becomes more competitive, the pressure tends to drive us toward ignoring possible problems and thus toward more reactive behavior. However, many organizations today are recognizing the high cost of dealing with project problems that could have been anticipated, so project risk management has become a popular management topic.

Managing Risks prudently, project, management, problems, process, probabilities, potential, probability, training, analysis, component, competitive, organizations, planning, environment, qualitative, resources, business, Financial, identification, insurance, investment, managers, characteristics, portfolios, components