Managing a Risk versus Managing an Issue: What’s the Difference?
By: Baglan Rhymes
Risk and issue are two critical concepts in Project Management that are sometimes used interchangeably even though they are distinct. They differ in definition and need different approaches from a project manager who aims to manage them effectively.
Risk vs. Issue: How do they differ?
A risk is a potential problem that may or may not arise during the project. Its potential impact is unpredictable, i.e., it may have a positive or negative effect on the project’s goals and objectives.
- Risks are identified throughout the lifecycle of the project. From project planning, execution, and monitoring to close out, project teams continuously monitor the new risk and take steps to mitigate them as a part of the risk assessment & risk management process.
- Identified risks are recorded in the risk register along with the probability, impact, timeframe & response strategy to mitigate the risk event.
- “Schedule risks”, “cost risks,” “resource risks”, “dependability risks”, “operational risks”, “security risks” and “stakeholder risks” are generally identified during the project planning and execution.
An issue, on the other hand, refers to the problems that have already cropped up and have begun to impact the progress or success of the project. Unlike risk, an issue is a particular event at hand during the project execution phase, and it needs to be resolved immediately to ensure the smooth sailing of the project.
- Issues are tracked in the issue register, which maintains the issue, its open date, owner, estimated closure date, criticality, impact, and intermediate updates as issues are resolved.
- Communication breakdowns, dependency issues, project budget overruns, and compliance issues are some of the common issues identified and resolved.
Risk Management vs. Issue Management:
Risks and issues do differ from each other, but they both are closely related in project portfolio management. Identifying and mitigating the risks during the strategic planning phase can prevent issues from happening altogether during the project execution. In a similar manner, resolving issues adequately eliminates future risks associated with the issue.
Risks and issues differ in terms of timeframe, probability of occurrence, and impact. So managing them effectively also need different approaches to ensure project success.
Risk Management vs. Issue Management Best Practices
Risk management is a comprehensive process of identifying and mitigating potential problems before they impact the project. Since risks are continuously monitored and identified throughout the project lifecycle, risk management processes are invoked throughout the project’s lifetime.
Project risk management today has become a standard process that is built into project management. It includes risk management planning, risk identification, analysis, response planning, and risk controlling on a specific project.
Risks are unpredictable and hence can have a positive or a negative impact on the project. So the modern risk management process aims to increase the likelihood & impact of positive events and decrease the probability & impact of adverse events. While the risks may crop up depending on the specific goals of the projects, they are a few best practices that run commonly across all types of projects:
- Have a definite risk management plan and start the risk management process as early as possible.
- Comprehensively quantify each risk with probability, impact & mitigation costs, and other metrics to enable swift & convenient prioritization.
- Enable enterprise-wide risk accountability to incorporate risk-based thinking and risk-aware culture in the organization.
- Conduct regular risk assessments to ensure an up-to-date risk profile; this enables business leaders to make quick data-driven decisions without delay.
- Enable swift communication between project managers, senior stakeholders, and project team members to ensure everyone is on the same page.
Issues are those obstacles that hinder the progress and success of the project. These obstacles can be technical or design issues, compliance, or even difference of opinion that may impede the project team from achieving its goals. The overall aim of issue management is to identify, document, and resolve issues as soon as possible.
- Incorporate the issue management plan into the overall project plan with centralized documentation dedicated to issue management.
- Issues must be prioritized and assigned to specific owners, along with due dates and next steps. Focus on issues that pose a greater threat to the project’s success.
- Ensure regular review of issues & issue log. A daily review for complex projects and a weekly review for more straightforward projects are recommended. Closed issues must be stored in the issue log to facilitate training lessons.
- Leverage project management tools to enable swift and open communication about the current issue status, responsibility, and outcomes.
Effective risk management & issue management processes follow these five steps to ensure project progress: identify, analyze, plan, monitor, respond, and close. Nevertheless, their approaches differ fundamentally.
Risk management is proactive, as it identifies, analyzes, responds to, and mitigates potential risks before they happen. Issue management is reactive because it identifies and resolves issues that have already happened. A project manager will need a combination of proactive planning and reactive problem-solving to mitigate risks and resolve issues effectively.
Leveraging Broadcom’s Clarity for Efficient and Effective Risk Management in Project Management
Clarity from Broadcom enables organizations to identify and manage potential risks during project execution with score and assessment capabilities. In order to prioritize and focus its risk management efforts, Clarity uses a risk scoring system to evaluate the likelihood and impact of risks.
With Clarity’s risk assessment process, project managers can identify and evaluate potential risks to ensure success. Risks are prioritized based on this information, and appropriate measures, such as mitigation strategies, are developed in response. In addition to providing real-time visibility into risk status, Clarity’s reporting and analytics capabilities allow project managers to track risk management progress.
Overall, Broadcom’s Clarity offers an integrated solution for proactively identifying and mitigating potential risks in project management.
Winmill PPM and Clarity
Winmill is a top-tier (Expert Advantage Plus) partner of Broadcom, the world’s premier PPM solution provider for Clarity and Rally. We have been providing PPM expertise to our clients since 2004.
Our expertise in project and portfolio management (PPM) spans from PLMC – Project Lifecycle Management Process, PMO readiness assessment to PMO Maturity.
We are the experts in Clarity implementation services, support, training, process consulting, agile coaching, digital transformation, and value stream management.
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