With your risks identified, prioritized and monitored, it is now time to develop strategies for managing the risks. The first type of strategy is “Risk Mitigation”. These are actions you can take before a risk occurs that can reduce the exposure to the risk. You should “brainstorm” these strategies with the members of the project team you identified in the Risk Management section of your “Project Management Plan” (refer to prior posts on this topic).
There are four mitigation strategies you can employ:
- Risk avoidance – this is the most expensive of the risk options. You can spend money or resources to eliminate the risk. An example would be if you have a lesser skilled resource assigned to a task, which raises a risks of on-time completion and/or deliverable quality, you can spend more money for a resource skilled enough to eliminate those risks.
- Risk limitation – this is the most common strategy. You take some action to reduce the probability and/or impact of the risk. One example would be if you are concerned about server downtime or performance during peak loads, you can implement redundancy and load-balancing to mitigate this risk.
- Risk transference – involves handing off the risk to another (willing) party. Examples are buying insurance, or outsourcing services.
- Risk acceptance – if the cost of mitigating the risk outweigh the cost of the risk itself, you may choose to just accept the risk with no mitigation actions. This strategy is typically employed for risks with low probability and/or low impact.
Documenting your mitigation strategies puts you in control of the project. You can manage your risks or they will surely manage you.