Common Types of Project Management Risk 2022

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What is Project Risk?
What is Business Risk?
Most Common Project Risks
Other types of risk
Project Management Software
Step-by-Step Guide to Managing Risks
What is Project Risk?
Project risk refers to any unanticipated event that could — or might not — happen during a project. A risk isn’t always negative. It’s simply an event where the outcome might be uncertain. Project risks can have a positive or negative effect on the project’s goals.
What is Business Risk?
Business risks are any unpredicted factors that could affect an organization’s financial health. Cyberattacks and natural disasters are two examples of external business risks. Internal business risks are those that arise within the company. These include falling out of compliance or having too many debts or labor disputes.
Most Common Project Risks
Companies must be willing to take risks in order to succeed in today’s business environment. Some risks are more common than others in every project.
Cost Risk
Cost risk refers to an increase in project costs. It is the possibility that the project will end up costing more than the budget allocated. Cost risk is the most prevalent project risk. It can be caused by poor budget planning, inaccurate cost estimation, and scope creep. Clients who demand too much, even though they have limited resources, are at greater risk. Other project risks, such as schedule and performance risk, can be caused by cost risk.
Schedule Risk
Schedule risk is when activities take longer than expected. This is often due to poor planning. It is closely linked to cost risk because slippages in the schedule can increase costs and delay the project’s outcome. Delays can lead to missed deadlines and possibly loss of competitive advantage. Cost risk is caused by schedule risk. Longer projects are more expensive. It can also cause performance risk by causing delays in completing the mission.
Performance Risk
Performance risk is when a project fails to produce results that are consistent with the project’s specifications. This is a common risk that is difficult for one party to assign. The project team may deliver the project on time and within budget, but still not produce the expected results. Performance risk can result in cost risk and schedule risks if the performance of a team member or technology causes an increase in the cost and duration of the project. The company lost time and money on a project that didn’t deliver.
Also read: Project Risk Management: 10 Golden Rules Every Project Manager Must Follow
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Other types of risk
Governance Risk
Governance risk refers to the board and management’s performance in regard to ethics, community service, and company reputation. It is directly related the behavior of project sponsors and stakeholders. It is easier to manage this risk with proper stakeholder engagement.
Strategic Risk
Performance risks can also be classified as strategic risks. It is caused by mistakes in strategy, such choosing a technology that doesn’t work as expected. One example is choosing a project management system that doesn’t help the project team with their responsibilities, but instead takes up more of their time working on the software than the actual project.
Operational Risk
Operational risks include those from poor implementation, process problems, such as procurement, production, or distribution. Poor implementation can also cause operational risks.
Market Risk
Market risks include foreign exchange, commodity markets, competition, and intere.

Author: Victoria