The process of risk management is all about identifying the risk, analyzing the consequences and impact of the risk, and making plans to mitigate the risks. It further involves implementing the plans and then tracking the risk management progress.
Ideally, risk management must begin immediately a risk is recognized. This best practice must not just be limited to the beginning, it must also continue all through the life cycle of the project. Risk management is very effective when it is completely integrated into the engineering and process of the program. This is a best practice that ensures dependency and serves as a driving force for effective risk management.
A common mistake most managers make is that they think identifying and tracking issues and then managing the root cause (risk) is a best practice. This kind of practice masks the actual risks that exist and will only help managers in tracking the risk without mitigating it. Therefore, it is important for managers to make sure that they not only identify the risks but also mitigate it. Their approach must change.
Therefore, a risk must not be confused for an issue. When a root cause or risk has been established, the consequence or issue must have already resulted. This means the issue must be handled. Moreover, if the consequences have not yet been established, it does not mean that the risk does not exist. Identifying the risk before issues result is a crucial best practice. This is the recommended approach all managers must take to ensure best practices.
The ideal example is the Commercial-Off-The-Shelf (COTS) process of making decisions. There are some key questions that must be kept in mind when making decisions.
These questions and others like it help project managers in identifying the main cause (risk) and the possible outcomes (issues). If the decision to acquire the COTS is taken, and later in the life cycle of the project the source discontinues the supply of critical components for a while, emerging issues can be managed immediately.
If a project falls behind schedule due to discontinued resources, this is not a risk; it is an issue at hand. Resolving it is an essential best practice to ensure risk management. Often, suppliers fail in meeting demands with supplies. This may require stocking of the materials to prevent off the market scenarios and delays in the progress of the project. This is also a best practice that can be implemented in most small businesses.
Therefore, comparing risk versus issue management is a vain attempt. They are both an essential and unavoidable component of project management. However, the best practice mandatory for proper management is to identify and mitigate the risk before issues arise.