It implies control of possible future events and is proactive rather than reactive. There are four elements of risk management. 1. Risk Assessment . The first step in risk management is to identify and assess all potential risk areas. A risk area is any part of a project where there is an uncertainty regarding future events that could have a detrimental effect on meeting the program goal.
Risk assessment continues throughout the life cycle of a program.
As the program progresses, previous uncertainties will become known and new uncertainties will arise. Risk Analysis . Once risks are identified, each risk should be characterized as to the likelihood of its occurrence and the severity of potential consequences. The watch list may identify early warning signs that a problem is going to arise. Risk Treatment .