Risk: The PMBOK® Guide describes risk as, An uncertain event or condition, that if it occurs, has a positive or negative effect on a project's objective. The key element of this definition is that the effect of the uncertainty, if it occurs, may be positive or negative on the objectives of the planned endeavour. Many things are uncertain; risks are by definition only those uncertainties that will impact the project should they occur.
Issue: A point or matter that is in question or in dispute, or a point or matter that is not settled or under discussion or over which there are opposing views or disagreements. (PMI, 2004)
Categories
- Financial: These directly impact the project’s budget and can include unexpected costs, budget overruns, or changes in funding. For example, a sudden increase in material costs could significantly affect a construction project’s financial health.
- Schedule: Delays and timeline issues fall under this category. These risks can stem from resource shortages, dependencies on external factors, or underestimated task durations. A software development project, for instance, might face schedule risks due to unexpected technical challenges or integration issues.
- Technical: These involve risks and issues related to the technology or technical aspects of the project. In IT projects, technical risks might include compatibility issues, software bugs, or hardware failures.
- Operational: These are associated with the day-to-day operations of the project. They can include issues with processes, systems, or people. For example, in a manufacturing project, operational risks might involve equipment breakdowns or supply chain disruptions.
- External: Factors outside the project’s control fall into this category. These can include regulatory changes, market fluctuations, or natural disasters. A global pandemic, for instance, would be considered an external risk affecting projects across various industries.
Project Risk Management: Strategies, Tools, and Best Practices - SixSigma.us
How to Categorize Risks and Issues in Project Management