Risk management is essential for every organization. It is crucial to analyze the possible risks before starting a new project. It is exciting too when an organization is rolling out a new information technology (IT) project. Between the planning, organizing and delegating duties to employees, it can be easy to forget about prioritizing risk management in a plan. However, it is essential to consider the risks associated with the hardware, software, cloud computing, data storage network upgrades that come with IT projects. So how can an organization efficiently prioritize risk during project management?

What is risk prioritizing?

Risk prioritization is the process of identifying, assessing and controlling the risks that associate with new IT projects. Every aspect and IT component of the project needs assessment to determine the risks and the best way to manage them. Failure to prioritize the risks in IT project management may prompt a company to do risk mitigation once the project is complete. Risk mitigation may be expensive for mandatory aspects of IT in the day to day activities. Carrying an assessment in advance gives an organization the upper hand of deciding the kind of risks to mitigate.

What is IT project management?

IT project is as a result of a need in a company that is essential in the growth and continuance of the company. IT project management involves identifying a goal, developing a plan, setting a budget, executing the program while carefully monitoring the progress of the plan. Project management ensures everything goes according to procedures and is within the budget. To successfully run an IT project, you need input from various experts and clear communication channels. It is steering the project in the right direction to meet organizational needs a complete the project on time.

Categories of IT risks

Risks are events whose outcome can either be positive or negative to business. Adverse risks can be catastrophic to any company which is why mitigation and avoidance are vital. There are three major types of threats in IT.

Risk of execution

The risk involves the necessary parties and resources that are essential to executing an IT project. The lack of resources or corporation from various parties can lead to poor execution of an IT project. Some parties include business associates, suppliers, employees, stakeholders, and the surrounding community. 

Risk of integration

The risk of integration happens when the IT project does not function well with the existing technology or isn't user-friendly. It would be a massive loss for a company to invest in a project that doesn't fit well with existing infrastructure or employee education. Some adverse impacts may arise like disruption of daily operation, the cost of integrating the IT, a dip in employee morale or replacing the whole tech.  

Risk of the unknown

New technology always has risks that will only appear during implementation. The chances aren't unknown per se. The extent of the negative impact of the risk is what remains unknown as well as the probability of happening.

The process of risk management

The risk management process involves identifying potential risks, assessing the impact, assessing the probability, creating an impact assessment plan and creating a suitable solution for dealing with the threat. The risk management process ensures that all risks have a procedure of neutralizing them. Risk prioritization treats each risk according to the negative impact it will have on the IT project. The following steps will assist you in identifying and dealing with potential threats.

1. Identifying potential risks

There are five types of potential threats.  The potential risks can come from technology, networks or even users. It is therefore essential to identify potential sources of uncertainties.

Cybersecurity risks

These can arise from the hackers and the users of the technology. Users can obtain confidential information for blackmail or their gains. A breach is cybersecurity can hurt the reputation of a company.

System architecture risks

Adding a new aspect of the IT infrastructure creates new avenues for potential exploitation. You have to thoroughly assess the threats that come with the changes in the IT landscape. The primary sources of system architecture risks are System interface, system input/output, encryption, quality assurance, vendor services, and security.

Performance risks

Several aspects affect performance like user response, employee training, performance history, and security controls. It is essential to integrate the new technology in a manner that improves the overall performance of the institution.

Control risks

These include IP address, malware, network security, and web security application among others. As an IT project manager, you have to review the risks that arise from unknown IT software and hardware. Control risks pose the threat of unauthorized access by hacker or users and prevention is the best approach. 

User risks

There are a lot of chances that arise from users who have malicious intentions. Conflicts between stakeholders, management, employees and vendors can contribute to user risks. The potential user risks include unauthorized access, low adoption rate, high costs of training and web security application.

2. Assessing the impact of risk

Each risk should have a rating on the potential adverse effects it can have on the company.

3. Evaluating the probability of risk

Rating the likelihood of a risk occurring will give you a clear picture of how to handle the threats.

4. Creating a risk impact assessment chart

A risk impact assessment chart combines the ratings of the impact, occurrence, and probability of risks. The rank on the table gives a transparent manner with how to handle different risks. You can accept the threat, mitigate, transfer or avoid the danger.

Risk prioritizing focuses on high impact risks with high probabilities and finds a way to neutralize them. Reducing or offsetting the impact of a chance for the benefit of a company is the cornerstone of risk management.

Author Bio

Ken Lynch is an enterprise software startup veteran, who has always been fascinated about what drives workers to work and how to make work more engaging. Ken founded Reciprocity to pursue just that. He has propelled Reciprocity's success with this mission-based goal of engaging employees with the governance, risk, and compliance goals of their company in order to create more socially minded corporate citizens. Ken earned his BS in Computer Science and Electrical Engineering from MIT.  Learn more at ReciprocityLabs.com.