Tuesday, December 6, 2011

Risk Categories

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What do you mean by risk categories? Risk categories are a group of potential causes of risk in a project.

And what is the use of categorizing risks? Risk categories generally provide a structure to systematically identify risks in a consistent manner. It helps the project manager and project team and contributes to the effectiveness and quality of the “Identify Risks” process. It provides a logical way to organize the project risks to better manage them and to determine the root causes of risk. Categorizing the risks also would be much beneficial while planning response actions for the identified risks.

Risks can be categorized in various ways like External, Internal, Technical or Project Management related risks. Risks can also be categorized based on the origin of the risk like Schedule Risk, Cost Risk, Quality Risk, Scope Risk or Resource Risk.

Depending on the project and the organization, the risk categories can be as simple as a list of categories or it might be structured into a detailed Risk Breakdown Structure (RBS) .

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