Learn more about the various types of project risks and how to mitigate them.
No matter how well-planned a project is, there are risks that could cause problems and derail it. These risks can also cause loss of time, money, or customers if they are not managed properly.
Companies today seek project managers who can manage risk. According to Capterra’s Emotional Intelligence at Work Survey, 52% believe managing risk is an integral part their job performance. It is also included in their annual review. (View the methodology of the survey here.)
You need to be a project manager who is responsible for delivering projects on schedule. It is important to understand the different types and how you can mitigate them. This blog will discuss seven common project risks and the proven ways to avoid them. Continue reading to find out more.
What is project risk?
Project risk can be defined as any event that could threaten a project’s success or outcome. It could be anything that causes your project to fail to meet its objectives. These include scheduling delays, budget overruns, and technical issues.
Project risks can have severe consequences–ranging from simple setbacks to complete project failure. If risks are not managed well, they can become roadblocks that halt project progress and cause delays.
1Scope creep
Scope creep is a risk that projects face the most. Scope creep is when project deliverables are modified after they have been defined. This can occur for a variety of reasons, including budget constraints or new requirements from stakeholders. Scope creep can lead to project delays and cost overruns.
How to reduce scope creep
2Communication issues
This is when communication between stakeholders and the project team breaks down. The project team might not be able to understand the needs of stakeholders or may not keep them up-to-date with the project’s progress. This can lead to miscommunications or misunderstandings that can increase the likelihood of project failure.
How to reduce communication risk
3Technology issues
These risks are created when technology isn’t working properly. It could be outdated software, incompatible hardware, system integration or compatibility problems. Technology risks can slow down or even stop a project from moving forward.
How to reduce technology risk
4Scheduling issues
Scheduling risks are when the project timeline is unrealistic or there are delays in project schedules. The project team might miscalculate the time needed to complete the project or other unforeseen circumstances, such as scope creep or technology issues, could cause delays.
How to reduce scheduling risk. Capeterra’s Shortlist contains the best task management software for project scheduling.
Overruns in the 5Budget
Budget overruns are another risk in project management. They occur when project expenses exceed the budget estimate. Budget overruns may be caused by many reasons. For example, the project team may underestimate the cost for materials or have to pay unexpected expenses during the project.
How to avoid budget overrunsCapterra’s Shortlist of best budgeting software will help you allocate, track, manage, and control your project budgets with no hassles.
6Market uncertainty
Market uncertainty refers to any market risk that is unprecedented and can occur during a project’s course. This occurs when economic or market conditions are uncertain and have an impact on the project.
