What is Risk Management and why it is important?

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What is Risk Management?

Risk management is nothing but it is a way of managing and handling the risks in the Project to avoid any failures. In other words. Risk management is an approach to ensure that the projects are delivered as per the plan to avoid the impact.

Project Level Risk Management process involves Risk identification, Planning, Monitoring, Review and control. Risk management will recommend the processes, tools and techniques to manage the project and handle the risks effectively.

What are the steps to be followed to manage the risks:

Risk Identification:

In this step the product owner, scrum master and the development team will identify the potential risks that will impact the project goal.

At the beginning of the project, risks for the project are identified in a broader perspective. Check list (if created) would be of help in the risk identification process

Project Risk Management Checklist (Sample above)

Risk Planning:

During the planning session, mitigation and contingency plans are put forward for the identified risks. Risk register is created at project level by the Scrum Master / Project Manager which is referenced by the team as required.

This is done at the beginning of the project only and Project Risk register is updated during the course of the project.

Risk Monitoring:

All the risks identified earlier are reviewed and monitored between the iterations of the project. Risk Register is updated for the risks which are closed and any new risks that are identified along the way of the project. More over this information is then used in the iteration level discussion

Risk Review:

This step will help to check the status of the risk regularly and take the correct actions accordingly. In fact a Risk Review process or a Risk Review meeting is a crucial part of any project.

Risk reviews facilitate better change management and continuous improvement. The process of controlling and monitoring risks includes the following tools and techniques: risk re-assessment, risk audits, technical performance measurement, reserve analysis, status meetings.

Risk Control:

Risk control uses findings from risk assessments that uncover potential risk factors in an organization’s operations and management practices. It is the set of methods by which firms evaluate potential losses and take action to reduce or eliminate such threats. It is a technique that utilises findings from risk assessments.


Agile methodology reduces risk in early phases of software development, we should also consider the idea that there is a demand to start thinking about making more room to risk management on a more formalized way.

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Written by 

E Sowmya is a Project Manager/Scrum Master (Agile) at Knoldus.Inc. She loves to learn new technologies and new frameworks in Agile.And she loves to travel and explore new places and loves dancing.