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Risk analysis as a key point of effective implementation of program assumptions and activities is carried out at every level, including project level of the project.
It allows us not only to be prepared for various circumstances, but also to verify whether the applicant is aware of the risks that may occur during the implementation of the project and whether he is properly prepared for it. Hence, diligent analysis will not only improve the project implementation, but may also have a positive impact on whether this project can be implemented under the EEA Grants 2014-2021.
On the other hand, in the extreme case of not achieving at least one of the assumed results, the situation in which all the possibilities from properly prepared risk analysis are exhausted will be considered differently to that where the given risk was not included in the project implementation or the planned response is not appropriate.
At the beginning, let’s explain what risk and assumption are.
Risk is an event or circumstance that may have a negative effect on achieving the expected results. Assumption is a prerequisite for the success of the project. An assumption is a positive way of describing risk, and risk is a negative way of describing an assumption. As an example, let's consider one of the risks associated with the pedagogical training project.
Risk = Educators may not be interested in participating in training.
Assumption = Educators will be interested in participating in training.
Assumptions and risk may be internal or external factors. Internal factors are things that we have under control. External factors are those beyond our control.
It is not without reason that the sections on objectives and indicators as well as project activities in the application form were before risk management. Knowing the purpose of the project, its impact/outcomes and outputs, it is much easier to carry out risk analysis: such project activities should be undertaken that are supposed to enable the production of a specific product which, according to the assumptions, should lead to the achievement of the intended results, exerting a specific impact on the target group which, according to the assumptions, will contribute to the achievement of the project goal. Referring to the above definition of risk, it is enough to define the assumptions at each level and then assign the risk to them.
After defining the risks, the probability of their occurrence should be determined according to the scale:
1 - very unlikely; 2 - unlikely; 3 - likely; 4 - almost certain.
We ignore extreme values, i.e. impossible and certain situations. Next, we consider the potential consequences for the project:
1 - minimal; 2 - moderate; 3 - serious; 4 - very serious.
If the analyzed case has no impact on the project, it should not be included in the risk analysis. On the other hand, if the potential impact is devastating, then if the probability is greater than "very unlikely," you should decide whether to redesign the project or give it up.
The final stage of the risk analysis being developed is to present the planned countermeasures, including the description of the planned response to the occurrence of adverse events. These measures should be selected in proportion to the probability and impact, but also be economically effective; relatively easy to apply and enabling the achievement of designed assumptions, and if this is not possible, minimizing negative effects.
Many risks may arise from the analysis of the organization and the needs/impact of its stakeholders.
For projects related to mobility, typical risks will be e.g. withdrawal of the participant - for any reason, exchange rate differences, errors in reports submitted to the Operator, double financing of the same activity.
For institutional cooperation projects, we may face similar risks, and in addition take into account the situation in which the results of intellectual work will not be satisfactory, but also changes in the law that may affect them. In addition, in some cases, the risk may stand for rapid socio-economic changes that will affect the timeliness of project assumptions.
Risk analysis is a process because potential risks may change at different stages of the project. However, it is important to do it for the first time before starting the activities. The most typical case is when 1 participant cannot take part in the mobility, as the beneficiary finds out, e.g. 3 days before departure. If no one is in his place, the assumed indicators will not be achieved. So shortly before his departure, you may not be able to take action. However, if you are aware of such risk at the planning stage, you can prepare for it: create a reserve list of participants and prepare them to implement mobility, book flights/ make a hotel reservation with the possibility of changing data and/or free cancellation. When creating a reserve list and carrying out all other activities related to responding to possible risks however, one should remember to maintain high quality of project activities.
To sum up, it is worth spending enough time to develop a risk analysis - being prepared for various events in the vast majority of cases will allow the efficient implementation of the project as intended regardless of the circumstances.