How to Identify a Project Risk from a Project Issue ?

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project risk

How to Identify a Project Risk from a Project Issue ?

Project issues and project risks are being mistaken and used interchangeably by many people. They both use the terms to refer to a negative event that will hamper any plan and pull it down. It is important to address this concern right away.

project issue is something which is happening as compared to a project risk that will occur in the future. An issue can be regarded as something that is unpleasant but has a little effect on the schedule, the budget and the scope. But, a project risk is a drastic event that may result to big changes. The time and level of impact on project create the difference between the two elements.

Further, an issue normally occurs even in the middle of a project. It is present focused and still requires immediate action. Next, it is usually negative which can create conflicts in all aspects of the project. It should be documented in the project issue register for proper documentation. On the other hand, a project risk can be a threat caused by vulnerabilities and this can be prevented or avoided through a protective action. It is also focused on future. Unlike project issues, project risks are seen as future outcomes or repercussions. It can be either negative; when it causes more damages or; positive when it creates and opens door for new opportunities. Any project risk is documented in “risk register” to keep track of this event. Meanwhile, the response should be done on the “risk response planning”.


Project Risk and Project Issue:

In general, the project manager should identify all of the possible negative risks that may happen, and his response must be plans on how to identify the solutions to possibility minimize or reduce the outcomes. Project risks are the main causes of uncertainly in any organization. Increasing focus on the potential project risks helps the companies to formulate contingency plans. The skill in managing project risks can help companies to act more confidently on their future business decisions. Their knowledge about project risks that they are facing can give them many options or choices on how to deal with these.  It is also needed to add that project risks can come from external or internal sources: external risks are those that are cannot be directly controlled by the management. This includes, political issues, exchange rates or even interest rates etc. On the other hand, internal risks include non-compliance among several others.

The project manager is expected to give his full attention on resolving the project issues and project risks that will take place. Such occurrences are already expected but the thing is, their impact and magnitude are the ones not expected.  When it comes to issue management, the project manager should document the project issues and there should be someone to perform an issue analysis in able to identify the “work-around” to fix a certain project issue.

It is a must that these project issues are not repeated in the future. That is the main reason why these are being documented. This will serve as a reference to guide and give solutions to the future project issues.

Project issues may re-occur in any form, at any time thus, needed to be prepared for. If it occurs again in such events it will be treated as “project risks” because risks are always future focused. It will be documented in the “risk register” and when a sufficient project risk response plans are been identified to cover those possible future risks.

Risks and issue are very different from one another. Risks may occur on a project and make a negative impact to a project. It is possible to have a project risk that can have a possible impact on a certain project. Obviously, in identifying project risks before it become issues and having plans in place to address them is preferred of having an issue arise for which we’re not prepared or ready. In some cases, it is able to reduce the possibility of a project risk that can occur or a project risk that will be able to occur or even, completely avoid the project risk. Handling risks and issues differently will make the project management team to exercise problem solving skills to a higher level. It is one of the best practices that will help the project run smoothly and reinforce the manager to always to the right thing.

 

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