Presentation on theme: "Identifying , Assessing and Managing Risk"— Presentation transcript:
1Identifying , Assessing and Managing Risk Session 4Identifying , Assessing and Managing Risk
2Agenda What is Risk ? Risk Identification Risk Assessment And EvaluationRisk Management and MitigationManaging risk though InsuranceOther Ways of Transferring RiskRisk Reporting and Documentation
3What is Risk?Risk is a threat or a probability that an action or event will adversely or beneficially effect an organisations ability to achieve its objectives.Some degree of risk is likely to yield a more desirable, and appropriate level of return for the resources committed (Chapman and Ward , 2003)The project Management Institute defines Risk as‘ An uncertain event or condition that occurs , has a positive or negative effect on a project outcome ‘Risk is seen viewed differently by individuals , some Confuse Risk with Uncertainty others with Threat.Risk Vs ThreatWhile Risk does not necessarily mean harm , Threat is more of an adverse effect.Risk versus Probability: While some definitions of risk focus only on the probability of an event occurring, more comprehensive definitions incorporate both the probability of the event occurring and the consequences of the event. Thus, the probability of a severe earthquake may be very small but the consequences are so catastrophic that it would be categorized as a high-risk event.Risk versus Threat: In some disciplines, a contrast is drawn between risk and a threat. A threat is a low probability event with very large negative consequences, where analysts may be unable to assess the probability. A risk, on the other hand, is defined to be a higher probability event, where there is enough information to make assessments of both the probability and the consequences.Note: Risk Vs UncertaintyRisk is a state of uncertainty where some of the possibilities involve a loss or other undesirable outcome while Uncertainty is the complete lack of certainty of what the outcome will be .
5Strategic risksStrategic Risks are those relating to projects concerning the strategic orientation of the organisations within its environment, and are concerned with the management of the long term direction of the organisation .Strategic Approach to Risk in Marketing shouldSpeed up the process of delivering of new marketing initiativesEnhance upside value of marketing projectsProvide a case for budget allocationImprove the process and output of planning at strategic , tactical and Operational level.Perspectives on RiskThis varies according to the organisational culture and the industries in which they operateThe process of identifying , assessing and managing risk works at many levels of the organisationStrategic risk is the current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes. This risk is a function of the compatibility of an organization’s strategic goals, the business strategies developed to achieve these goals, the resources deployed against these goals, and the quality of implementation. The resources needed to carry out business strategies are both tangible and intangible. They include communication channels, operating systems, delivery networks, and managerial capacities and capabilities. The organization’s internal characteristics must be evaluated against the impact of economic, technological, competitive, regulatory, and other environmental changes.Risks are a major influence on the success or failure of a project. They must be managed by applying a conscientious effort to their reduction or elimination. Not all risks need to be eliminated entirely; often it is sufficient to reduce the project's exposure to a level that is acceptable to the project. Risk management costs time and effort, but the rewards can be significant. Without risk management, the danger of failure is magnified.
6The Risk Management Process Risk Assessment includes:IdentificationAnalysisPrioritisationRisk Control includes:Response planningResolutionMonitoring and reporting
7Risk IdentificationThe risk management process begins by trying list all possible risks that could affect the project .Tools used in identifying risksRisk Breakdown structure – listing all areas of risk identifiable with regards to a particular projectBrainstorming - Typically the project manager pulls together , during the planning phase, a risk management team consisting of core team members and other relevant stakeholdersCause and effect Diagrams – The Ishikawa Fishbone analysis which looks at the range of risks and their potential impact on the project.The following diagram shows a RBS and A cause and effect diagramRisk Identification ascertains which risks have the potential of affecting the project and documenting the risks' characteristics. Risk Identification begins after the Risk Management Plan is constructed and continues iteratively throughout the project execution. The Risk Identification process naturally progresses into the Qualitative Risk Analysis or the Quantitative Risk Analysis Process. Sometimes it is wise to include the identification of a risk and its response in order for it to be included in Risk Response Planning.Techniques in Risk IdentificationBrainstorming - Brainstorm is employed as a general data-gathering and creativity technique which identifies risks, ideas, or solutions to issues. Brainstorming uses a group of team members or subject-matter experts spring boarding off each others' ideas, to generate new ideas.Delphi technique - The Delphi technique gains information from experts, anonymously, about the likelihood of future events (risks) occurring. The technique eliminates bias and prevents any one expert from having undue influence on the others.Interviewing - Interviewing in a face-to-face meeting comprised of project participants, stakeholders, subject-matter experts, and individuals who may have participated in similar, past projects is a technique for gaining first-hand information about and benefit of others' experience and knowledge.
9Other Identification Frameworks The 6 Ws Framework - Chapman and WardWho, What , Where , Why, Which way and When .Taking into account risks that exist and are controlled , risks in the external environment , and those that are uncontrollableEarnest and Young – strategic risk radarMainly focusing on the potential sources of risks for a larger business. However, relevant to project managementPESTLE frameworkExample - Legal– EU legislation , New Tax lawsTechnical – Redundant TechnologyThe risk identification process should not be limited just to the core team. Input from customers , sponsors , subcontractors, vendors and other stakeholders should be solicited . Relevant stakeholders can be interviewed or be included in the team. Risk profile is another useful tool , this lists down a set of questions that address traditional areas of uncertainty on a project . These questions have been developed from previous similar projects .The RBS (slide 8)and risk profiles are useful tools for making sure no stones are left unturned. At the same time ,when done well the number of risks identified can be overwhelming. Next aspect of the risk management framework is the Risk Assessment and evaluation .
10Risk EvaluationAnalyse risk for their impact, severity and the probability of the risk being experienced.Tools and frameworks priorities risk and to allocate resources appropriately to the mitigation of these risks .Risk Assessment MatrixAssigning the probability of risk being experienced and the severity of the impact .Risk QuantificationExpected valueSensitivity AnalysisMonte Carlo SimulationsFailure Mode Effect Criticality AnalysisPERTRisk Assessment matrix –Each risk is put in one of the nine boxes , best done as a team of individuals , as each perceives risk differently .
11Risk Assessment Matrix (COSO ERM Framework) – for assessmentSource:
12Risk QuantificationExpected Value – Allowing the calculation of the output of a project and mitigating this against the likelihood of occurrence. This gives an indication of return against the risks.Sensitivity Analysis - A technique used to determine how different values of a variable will impact a particular outcome under a given set of assumptions.Monte Carlo Simulations – this is a computer based sensitivity analysis tool, providing data in a range of variables with different values and distributions, for example costsFailure Mode and Effect AnalysisTakes into account all possible risks and also tries to outline their possible effects .Usually quantified ,often not prioritized.PERT(Project Evaluation and Review Technique)Project Evaluation and review techniques dealing mainly with fact that the estimated time on a project will vary.Expected ValueThis is a technique that helps us assess the output of a project and mitigating this against the risk or likelihood of occurrence.If the development of a new product line has a 66% chance of generating profit of 10 million . Then the expected value is ×$ 10,000,000 or $ 660,000.Expected value can be used to allocate resources to alternative projects taking into account the level of return and impact of risk in terms of the likelihood of successful delivery of the project.Sensitivity AnalysisThis analysis allows us to evaluate the impact of a range of risks and the financial impact of these risks , for example in the context of the cost of inputs into a project , which are likely to change over time . Over the last few years for example we have seen major changes in the price of energy inputs and raw material.An expected value of the main inputs into the project is calculated and a sensitivity analysis is applied for example at ±15% .Monte Carlo SimulationA computer generated model providing data on a range of variables with different values and distribution, for example costs timings , input costs and shows the impact on a range of outputs, for example financial outputs.Failure Mode and effect AnalysisThis is a useful approach as it takes into account all possible risks and also tries to outline their possible effects .This may be quantified although often no priority is given to risks. The failure , mode and effect analysis may be quantified.
13Final Risk Analysis – for assessment The probability of the riskThe Impact of the RiskThe ability to detect this risk .It is the identification of the following 3 factors that help mangers take appropriate action .A - can be measured using a Logarithmic scaleB –Can be assigned a scoreC - Can be assigned a scoreRiskPIDRisk Probability NumberPower Fails3108240Projection fails5120Loss of key speaker
14Scenario Planning Define the scenario Determines the risks and opportunities to the projectInvolves experts from a range or related areas in departments within the organisation.Define the scenarioIdentify the risks relating to that scenarioCreate a plan to identify early warning indicators and identify management responsesCommunicate this plan to all parties involved in resolving the scenarioReview regularlyWhen establishing a strategic direction and a set of priorities that will guide decision-makers, few techniques are as powerful as scenario planning. Scenarios are perspectives on potential events and their consequences, providing a context in which managers can make decisions. By contemplating a range of possible futures, decisions are better informed, and a strategy based on this deeper insight is more likely to succeed.Scenarios help managers tackle risk, uncertainty and complexity, enabling better strategy development. Scenario planning enables organizations to rehearse the future, to walk the battlefield before battle commences so that they are better prepared.Scenario thinking has been used by the military for centuries and by organizations such as Royal Dutch/Shell since the 1960s. According to Kees van der Heijden, Professor of Strategy at Strathclyde Graduate School of Business:"Scenario planning is neither an episodic activity nor a new technique: it is a way of thinking that works best when it permeates the entire organization, affecting decisions at all levels. However, unlike most popular management initiatives, it does not require major investment in resources or restructuring, simply a commitment for people to take time away from their routine activities to come together to reflect and learn."Scenarios may not predict the future but they do illuminate the causes of change – which helps managers to take greater control when market conditions shift. An organization’s future success will depend much on how managers react to what they do not know. As Mark Twain put it: "The important thing is not how much we don’t know, as how wrong we are in what we think we do know."
15Assumption AnalysisDesigned to ensure that the risks are inherent in making assumptions around the project plans.List the assumptions that have been made and built into the project planning process.For each of these assumptions risks should be identified on the basis of potential mistakes or incorrect application of assumption.The team should assess the assumptions for validity and if it is believed that the assumption is not valid , it should be reassessed.Should be an on going throughout the project planning process.
16Risk MitigationRisk mitigation refers to systematically reducing the risk or the likelihood of occurrenceThere are basically two strategies for mitigating riskTo educe the likelihood of that event will occur and orto reduce the impact that the adverse event would have on the projectStrategies includeTrainingEmployment strategiesLeadership and risk cultureBackup of security of dataExcellence management reporting systemsExternal inspectional and consultancyFinancial auditing ad fraud preventionReducing risk is usually the first alternative considered in risk management
17Risk Management Avoid the risk Overspecify Risk management covers a broader scope , of identification, assessment, and prioritization of risks followed by coordinated and application of resources to mitigate, monitor, and control the probability and impact of these risks.Risk management strategies.Avoid the risk OverspecifyTest Pilot and Trail Cancel the projectRisk Mitigation Build in fail safe systemsAccept the risk Share the RiskReducing risk is usually the first alternative considered in risk management . There are basically two strategies for mitigating risk . Reduce the likelihood of that event will occur and or to reduce the impact that the adverse event would have on the project . Most risk teams focus on reducing the likelihood of risk event since. If successful, this may eliminate the need to consider the potentially costly second strategy .
18Risk ReviewImmediate Reactions , success and failure should be quickly assessed and analyzedImmediate action to counter negative outcomesLong term review and evaluationSystems and strategy review and evaluationIt enables us toAccess personal or team performancePrevent future risks being experiencedIdentify training needs to help avoid future risksTo identify issues with processes and systemsRisk review can be done byMembers of the project teamBy staff independent of the project .By external audit teams .Risk aware companies might choose to work towards BS this is a key standard for risk management and gives a clear view on how to develop and sustain effective risk management.BS is key standard for risk management. It gives an understanding on how to develop , implement and maintain effective risk management within your business.Using BS31100 effectively can help increase a company’s effectiveness.
19Contingency Planning – for assessment Should risks occur, then such a contingency management plan will be implemented.IdentifyingAlternate actions relating to key risk events occurring.Resource allocation to implement remedial activity.An alternate project timeline.Business continuity management and contingency planning are of course essential and unavoidable tasks. However, the creation of a sound continuity and contingency plan is a complex undertaking, involving a number of stages and discrete activities. For example, initially it is necessary to understand the underlying risks and the potential impacts of disaster. These are the building blocks upon which a sensible business continuity plan or disaster recovery plan should be built. Then the plan itself must be created. Which of course is far from trivial. Then there are the maintenance and testing phases, to ensure that the plan remains current. Even having arranged all these matters there is an audit to consider - and of course, there is the not so small matter of ISO17799!The following is a rough outline of how to formulate an effective contingency plan.Develop the contingency planning policy statement. A formal department or agency policy provides the authority and guidance necessary to develop an effective contingency plan.2. Conduct the business impact analysis (BIA). The BIA helps to identify and prioritize critical IT systems and components.3. Identify preventive controls. Measures taken to reduce the effects of system disruptions can increase system availability and reduce contingency life cycle costs.4. Develop recovery strategies. Thorough recovery strategies ensure that the system may be recovered quickly and effectively following a disruption.5. Develop an IT contingency plan. The contingency plan should contain detailed guidance and procedures for restoring a damaged system.
20Root cause identification - Root cause identification is a technique for identifying essential causes of risk. Using data from an actual risk event, the technique enables you to find out what happened and how it happened, and understand why it happened, so that you can devise responses to prevent recurrences.Strengths, weaknesses, opportunities, and threats (SWOT) analysis - A SWOT analysis examines the project from the perspective of each project's strengths, weaknesses, opportunities, and threats to increase the breadth of the risks considered by risk management.(One common mistake that is made early in the risk identification process is to focus on objectives and not on the events that could produce consequences.For example team members may identify failing to meet schedule as a major risk while what they need to focus on are the events that could cause this to happen)
21IntroductionRisk is and inevitable part of life. To remove risk form our life and to live life fully is impossible.For most of us , the assessment and management of risk occurs almost subconsciously and draws on our experience and the application of common sense.This section of the syllabus recognises the contemporary and practical alignment of risk management in an applied organisational context and the associated interfaces with fundamental marketing management.It is necessary to explore , appreciate and understand that operating within organisational and environmental dynamics, risks exists.methods of protecting our organisations and ourselves by mitigating risk via insurance / finance and transfer. Which is s core business within an organisation itself will also be discussed.
22Learning Outcomes4.1 Critically evaluate the importance of developing an understanding of risk assessments in organisations in order to protect long term stability of a range of marketing projects.4.2 Critically evaluate the differences between the following types of organizational risk.4.3 Analyse and assess the potential sources of risk, of both internal and external origins, directly related to a specific case and consider the impact of these risks on the organization.4.4 Design a risk management programme appropriate to measuring the impact of risk in the context of marketing projects4.5 Undertake risk assessments on marketing projects and assess the impact of short/long-term tactical changes to the marketing plan4.6 Critically evaluate the different approaches organizations can take to mitigate risk in order to reduce its potential to harm the organisation or its reputation:
23Agenda What is Risk ? Risk Identification Risk Assessment And EvaluationRisk Management and MitigationManaging risk though InsuranceOther Ways of Transferring RiskRisk Reporting and Documentation
24Managing Risk Through Insurance This in other words is a transfer of risks to another party. This transfer does not change risk .Passing risk to another party almost always results in paying a premium for this exemptionIn most cases this is impractical with regards to most marketing projects as defining the project risks to( a third party) insurance company who might not grasp the details is difficult and usually expensiveThere are four main types of InsuranceInsurance relating to legal obligationsInsurance against loss or damageInsurance relating to personal performanceInsurance against financial lossInsurance is an agreement where, for a stipulated payment called the premium, one party (the insurer) agrees to pay to the other a defined amount (the claim payment or benefit) upon the occurrence of a specific risk. This defined claim payment amount can be a fixed amount or can reimburse all or a part of the loss that occurred. The insurer considers the losses expected for the insurance pool and the potential for variation in order to charge premiums that, in total, will be sufficient to cover all of the projected claim payments for the insurance pool.The transfer or spread of risk is something that is very much in the news. The use of insurance transfer and control and impact of risk, however , has been around for a long time .In many cases insurance could be a legal obligation these relate to law and regulations as well as to conditions that are laid down in commercial contracts. It may be that a company that is employing a sales promotion agency will want to build in insurance. Against over emption ,for example.Other liability insurance may cover failure to meet expected professional standards, resulting in negative claims. Environmental damage and loss relating to property, compensation for bodily harm due to accidents and professional liabilities.All parties involved in the project should be adequately covered for any liability. Insurance that is required by legislation includes those relating to health and safety at work.With much of this , professional advice should be sought from the internal legal counsel or external lawyers and insurance advisors.Professional bodies may also be able to offer advice and access to preferential rates .
25Insurances covering Project Personnel Latent defect risk InsuranceThis insurance will cover damage relating to problems in design or materialsAccident and Sickness InsuranceThis will cover sickness or injury relating to key staffKey Person InsuranceThis covers loss relating to illness , injury or death of names personnel.Pecuniary InsuranceThis covers financial loss relating to a variety of causes, for example , late completion of projects . Export credit insurance is an example of this
26Export Credit Insurance Buyer Credit facilityUnder a buyer credit facility , a bank makes a loan to an overseas borrower in order to finance the purchase of goods or services form an exporter carrying on business in United KingdomSupplier Credit Financing Facility(SCF Facility)Where a buyer requires credit terms of at least two years for an export contract, an SCF facility allows the exported to pass the payment risk to its bank in respect of the credit PortionLines of CreditAn ECGD- supported line of credit can provide UK exporters of capital goods with a quick way of access finance made available by a UK bank to an overseas borrowerProject Financing FacilityWhere a UK exporter is involved in a minor/major project overseas, ECGD may give its support to project financing arrangements under which the banks providing finance rely primarily upon the revenues of the project for repayment.Why you need export credit insurance Cash-in-advance and letters of credit are no longer always competitive terms in the international marketplace. Facing limited access to capital in their own countries, foreign companies are seeking more than ever before to buy on credit terms. You need to extend competitive open-account terms to grow your international business, but what happens if you don’t get paid? Your foreign customers could go out of business or file bankruptcy, face currency devaluations or foreign exchange problems, run short on cash, take you for a ride, or fail to pay you for any number of other reasons. You can protect your foreign receivables against non-payment risks with an export credit insurance policy. What export credit risks are covered? Export credit insurance protects your foreign receivables against virtually all commercial and political risks that could result in non-payment of your export invoices. Commercial risks include bankruptcy, receivership, and other kinds of insolvencies, as well as protracted defaults caused by cash flow problems, balance sheet issues, bad faith, market demand, currency fluctuations, natural disasters, or general economic conditions in your customer's country or abroad. Political risks include currency inconvertibility, foreign exchange controls, transfer risks, war, strikes, riots, revolution, confiscation, expropriation, nationalization, embargoes, trade sanctions, and changes in import or export regulations. How much does export credit insurance cost? Premium rates for export credit insurance are based on the terms you extend, the spread of your buyer and country risks, and your previous exporting experience. The cost of foreign receivables insurance is low, typically a fraction of one percent based on sales volume, in most cases much less than the fees charged for letters of credit. Whether or not you pass this incremental expense to your overseas customers, the price of export credit insurance coverage is insignificant compared to the additional business you can obtain by extending competitive international credit terms.
27Insurance Facilities For Exporters Export Insurance Policy (EXIP)The Export Insurance Policy protects an exporter against not receiving Payments to which it is contractually entitled under a capital goods contractBond Insurance policy (BIP)A bond risk policy provides protection in the event of a bond being called unfairly and for calls made as a result of specified political events , and is provided in respect of an export contract where a buyer credit facility , SCF Facility or an EXIP is being provided for the contract.Overseas Investment InsuranceInvestment Insurance provides cover in respect of political risks (including expropriation and restrictions on remittance) in respect of certain investments made in developing countries.Its also worthy to note that there are some risks that cannot be insured. The possible reasons would be as follows.Those where the chances of the risk occurring are too high .Where there is no possibility of spreading the cost of insurance across organisations insuring similar risks .Where there is no actuarial data form past events to quantify the risk.Where there is the potential of gain from the insurance .
28Agenda What is Risk ? Risk Identification Risk Assessment And EvaluationRisk Management and MitigationManaging risk though InsuranceOther Ways of Transferring RiskRisk Reporting and Documentation
29Agenda What is Risk ? Risk Identification Risk Assessment And EvaluationRisk Management and MitigationManaging risk though InsuranceOther Ways of Transferring RiskRisk Reporting and Documentation
30Agenda What is Risk ? Risk Identification Risk Assessment and EvaluationRisk Management and MitigationManaging risk though InsuranceOther Ways of Transferring RiskRisk Reporting and Documentation
31Agenda What is Risk ? Risk Identification Risk Assessment and EvaluationRisk Management and MitigationManaging risk though InsuranceOther Ways of Transferring RiskRisk Reporting and Documentation
32Agenda What is Risk ? Risk Identification Risk Assessment And EvaluationRisk Management and MitigationManaging risk though InsuranceOther Ways of Transferring RiskRisk Reporting and Documentation
33Identifying Risk‘….all projects involve risk- the zero risk project is not worth pursuing’’ – Chapman and Ward (2003) “ anything that can go wrong with a project” – Lewis (2007) The risk – reward ratio Risks vs Threats
34Event Tree AnalysisA diagrammatic representation of the range of outputs that occur in response to any event.With the increase in the number of outputs the diagram grows to look like a Branch of a tree.It is possible to enhance this process through a variety of additional activities . For example , we can add probabilities impact assessment score and values to outcomes to create a graphical representation of the projects and related picture of the risks and opportunities.Source:
35Risk Management strategies Avoiding the riskRisk avoidance is changing the project to eliminate the risk or condition . Although it is impossible to eliminate all risk events , some specify risks may be avoided before you launch the project .Cancel the projectThis is an option with fewer rewards, and is not possible at all times.Fail-safe SystemBuilding fail safe systems so that identified risks cannot occur at all .OverspecifyOver specifying at key stages in a project can help avoid risk being experienced.
36Risk Management strategies Test Pilot and ResearchThe role of testing and piloting in marketing projects involves testing in direct marketing by small scale sampling. Using computer stimulated test marketing of new products launches is now used prior to the actual launch of products .Accepting the riskThe obvious option of putting up with and identified riskLimit the risk over timelimiting the downside of risks after the completion of each stage and to cancel the project should the assessment of the impact of risks outweigh the advantages from the completion of the task .Sharing the risk.
37Other Ways Of Transferring Risk These are often called Derivatives.Most companies try to minimise their downside impact through a variety of control mechanisms .Depending on the sophistication and the size of the business, others will try to maximise the upside benefits .The core problem when deciding upon a hedging policy is to strike a balance between uncertainty and the risk of opportunity loss .Example :Companies utilizing commodities from international markets are great risk when the prices of international markets for these commodities fluctuate.
38Risk Reporting The benefits of Risk Documentation Inform different levels with different objectivesAllows risk manager to answer key questionsProvide a complete picture of entire organization’s portfoliofor senior managementValuable means for communication between remote parties to a projectFamiliarisation –A record of Decision – Explains why a particular decision was taken .A knowledge Base – The knowledge gained form one project can help the efficient implementation of another.A framework for further analysis – Helps organisations understand better the information requirements for project management.There’s no doubt that risk reporting is key to helping risk management add value to organisations. Stuart Fagg reports on how some companies are using it to their advantage It’s a question every amateur philosopher has pondered: “If a tree falls in the forest and no one is there to hear it, does it make a sound?” Similarly, risk professionals may well have found themselves asking: “If a risk is managed and no one is told, is it actually being managed?” Of all the major developments in risk management in the past few years – enterprise risk management (ERM), the use of technology and the emergence of the chief risk officer to name a few – there is one element that brings it all together, and in many cases, stands between success and failure: risk reporting. Perhaps the most key application for risk reporting, in terms of risk professionals, is demonstrating the value that risk management can bring to an organisation and ensuring that those at the top understand and value risk. And with senior executives and boards increasingly looking to realise return on investment in risk, risk reporting is becoming increasingly important. However, the key, as with many activities in risk management, is to tailor risk reporting frameworks to the individual organisation. With many organisations looking to maintain a central risk executive – the chief risk officer – while empowering business units to manage their own risk, adapting risk reporting approaches can be difficult, particularly in organisations with diverse and complex operations.
39Risk Monitoring There are a range of tools to monitor risks Risk log – maintained by the project team , new risks are loged as the project runs.FRC’s risk monitoring Guidelines include, the following .Are there ongoing processes embedded within the company , addressed by senior management?Do these processes monitor the company ‘s ability to revaluate risks, adjust controls effectively, according to changes?Are there affective follow-up mechanisms to ensure that appropriate change or action is occurs in response to changes?Is there ongoing communication to the board on the effectiveness of the risk monitoring process.Are there specific arrangements for management monitoring and reporting to the board on risk and control matters of particular importance ?Risk monitoring and control continues on through a project until the project is completeRisk monitoring and control is the process of identifying and analyzing new risk, keeping track of these new risks and forming contingency plans incase they arise.Risk monitoring and control is important to a project because it helps ensure that the project stays on track.The key to Risk Monitoring and Control is communication among the team members, identifying potential risks bringing them to the project team, analyzing the risks, and planning for them as they arise.