A definition of risk management
Risk management is defined as the identification, assessment and economic control of those risks that endanger the assets and earning capacity of a business. A risk can be tolerated if: The likelihood of its occurrence is sufficiently remote and or the consequences are not severe. If what you are facing does not fall into this catergory, perhaps we need to talk.
Why Do Projects Fail?
A project fails when the plan is not met. Failure means that a project exceeds the timeline, overspends the budget, or underperforms expectations. We will outline two reasons why a plan is not met:
The plan was too optimistic. This arises when actions and costs are forced to meet predetermined targets. Underbidding, scale-to-fit, and political matters are also common causes.
External events have an impact on the plan: Scope creep, insufficient resources, unanticipated work, and extraordinary events are some examples.
To maximise the prospects of a successful outcome for your project, you should incorporate risk management.
Benefits of Project Risk Management
Project contingency can make or break a project. Having too much contingency is uncompetitive; having too little contingency increases the chance of failure. Risk assessment—or allowing for uncertainty within estimates—helps set contingency levels, with a preferred level of risk, and gives the confidence level of outcome targets.
The first step in our project risk management approach is to identify the risks that are present in your project.
Project Risk Management & Brexit advice
In a survey of the country’s insolvency and business restructuring professionals, the Institute of Chartered Accountants in England and Wales (ICAEW) predicted that (a) Brexit (b) a rise in interest rates and (c) Policy decisions by HMRC and banks are the three greatest challenges to businesses going forward.
The impact of Brexit was considered by far to be the biggest threat to business survival in the UK, with 73 per cent of insolvency professionals claiming this would be the main cause of business deaths.
The Bank of England raising interest rates was considered the biggest threat to businesses by 56 per cent of insolvency professionals, whereas 43 per cent believed the actions and attitudes of HMRC and the banks posed the biggest threat.
The findings come as the ICAEW has warned business owners to prepare for sharp rises in business costs in many sectors. More recently, COVID is having a similar impact on business continuity.
Brexit news. A case study
Management Consultants London (MCL) will work with you to identify and quantify the threats. We will compare your options and agree the right course of action for you. Once we have clarified issues of ownership and prioritised the risks we will assist you in implementing the plan, for as long as you need us.
Call us now on 0203 371 9616
Business management consultant