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Most business owners are intimately familiar with the concept of risk management. If you’ve ever formulated a business plan, you must consider the potential risks involved with launching an enterprise so that you can prepare, plan a response and convince lenders and investors to get your venture off the ground or help you to grow and expand.

Identifying project risks is a similar undertaking, but once you have done so, your job is not complete. You must next figure out how to analyze risk in project management so that you can neutralize known roadblocks or at least determine acceptable risk levels moving forward. In other words, you have to find proactive ways to move past risks in order to achieve goals.

This can be done through various types of risk analysis methods and with the use of appropriate tools. For those interested in how to analyze risk in project management, here are the main steps.

Understand Risk Management

The most basic steps in any risk management scenario include identifying project risks, assessing the risks, developing responses and creating a backup plan. However, this is easier said than done. For starters, how do you identify risks? We have written about it here before but its best to go through the important points again.

– Identifying Risks

Some amount of common sense is involved and your business experience will help you, as past risk factors can resurface in new projects. What about risks you haven’t encountered before? Here, a diverse team can help, bringing their wealth of individual experience to bear and if you’re collaborating with clients, vendors or other outsiders, their experience can also prove invaluable. You should also go over the project plan with a fine-tooth comb and evaluate any instance in which you suspect something could go wrong. Open discourse and open minds are essential during this phase.

– Analyzing Risks

Next you must assess risks and this may require different types of risk analysis methods. For example, modern methodologies focus on both negative and positive outcomes associated with risks. Risks are often defined as unknowns, but unknown events can be opportunities for improvement if you approach them correctly. Analysis can help you to reach such conclusions and separate known, negative risks from potentially positive unknowns.

– Nullifying Risks

Problem-solving is the next course of action, and if you have done a good job identifying and analyzing risks, this is where you can begin to mitigate them before they even occur. The process begins with prioritizing risks and then assigning ownership to appropriate team members to incentivize proper risk management throughout the project. From there you can work as a team to prepare proportional responses should risks become realities and, if you’re diligent, this should include both a plan A and a plan B. Hopefully, risk factors will never arise, but if and when they do, you’ll be prepared to face them head-on without losing momentum.

Utilize Appropriate Tools

Remember that you don’t have to go it alone. The right project management tools, like Clarizen’s cloud-based solutions, can help you to manage every part of your project, including the risk analysis portion. The ability to communicate, share resources and track progress can make all processes more efficient and effective, including the process of identifying, assessing and addressing risk factors.