Risk mitigation is defined as the action taken to transfer, reduce, or eliminate risks in a project. This is done by reducing the scope, budget, or quality without having any substantial impact on the objectives of the project. This is done to reduce the impact of any uncertainty on a project caused by circumstances that have not been foreseen during its planning. A risk mitigation strategy is a plan which takes the overall view to mitigate the risks and safeguard investment activities. The plan will detail the specific risks that will have to be dealt with and the action that has to be taken to carry out this risk mitigation strategy. The members of the project team have then a very clear idea of the action that is expected from them while the management has the knowledge of the steps being taken on their behalf to reduce the risk on the project.
The simplest way of applying these risk management actions is to include this in the list of activities on the project which are in addition to the original list of activities. This can be introduced into any project management software that is being used and may include specific flash points that will indicate that action has to be taken to reduce risks. So when the risk becomes apparent the action is automatically triggered and the persons who have been earlier identified have to take the necessary actions allotted to them.
The plan for risk mitigation must include definite actions that are required to be taken and the persons responsible for such actions. The outcome of these actions has to be well documented for future reference. Risks can be identified for each part of a package and can include cost, material, and human resources allocations. These risks are triggered by relating these allocations to the progress on the project and causing warning signs to be displayed when the relation between them crosses certain thresholds physically or financially. The plan has to include strategies to be followed whenever such signs are noticed and must include complete documentation of the events leading up to the risk and the action being taken to mitigate it.
If there are certain conditions that have led to the presence of the risk, examine the possibility of removing the conditions that have led to the risk and even the possibility of removing that particular task from the project itself.
Accept the risk and acknowledge its existence, and keep it on constant watch, so that any emergency actions can be immediately taken if the risk shows no signs of getting under control.
If the risk is already well established, see if the effects of the risk can be minimized so that it lessens the impact on the overall project plans.
Examine the possibility of transferring the risk to another part of the project or find out if there are other individuals who can handle the situation better.
Risk mitigation strategies have to be part of the overall plan of a project and must be in the knowledge of all the persons associated with the project. This also sets certain standards which are well known to everyone involved as the minimum acceptable, and which in itself will serve as parameters which will reduce the risks.
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