Risk management in project portfolios
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This article is an overview and summary of relevant body of knowledge concerning risk management in project portfolios. Project portfolio management (PPM) is the set of managerial activities that are required to manage a collection of projects and programs needed to achieve stratetic business objectives.<ref name="PPM"> Blichfeldt & Eskerod, 2008; Project Management Institute, 2008b </ref> | This article is an overview and summary of relevant body of knowledge concerning risk management in project portfolios. Project portfolio management (PPM) is the set of managerial activities that are required to manage a collection of projects and programs needed to achieve stratetic business objectives.<ref name="PPM"> Blichfeldt & Eskerod, 2008; Project Management Institute, 2008b </ref> | ||
| − | It has been widely accepted that [[Risk Management]] is an important part of [[Project Management]]. Project risk management enables an organisation to limit the negative impact of uncertain events and/or to reduce the probability of these negative events materialising, while simultaneously aiming to capture opportunities <ref name=”Petit12”>Petit. ”Project portfolios in dynamic environments: Organizing for uncertainty.” International Journal of Project Management, 539-553 (2012)</ref>. However, project risk management is only effective to a limited | + | It has been widely accepted that [[Risk Management]] is an important part of [[Project Management]]. Project risk management enables an organisation to limit the negative impact of uncertain events and/or to reduce the probability of these negative events materialising, while simultaneously aiming to capture opportunities <ref name=”Petit12”>Petit. ”Project portfolios in dynamic environments: Organizing for uncertainty.” International Journal of Project Management, 539-553 (2012)</ref>. However, project risk management is only effective to a limited extent because it lacks a portfolio wide view. <ref name="Contingency">Teller, Kock & Gemünden. "Risk Management in Project Portfolios Is More Than Managing Project Risks: A Contingency Perspective on Risk Management". Project Management Journal, 67-80 (2014)</ref> |
The information available regarding risk management at portfolio level is fairly scarce. Methods like [http://en.wikipedia.org/wiki/Monte_Carlo_methodhttp://en.wikipedia.org/wiki/Monte_Carlo_method Monte Carlo Simulations] can be used to create efficient frontier charts in order to best as possible choose risk/return balance within the portfolio. These numerical methods are however often associated only with risk (known unkowns) and not uncertanties (unknown unknowns). </br> | The information available regarding risk management at portfolio level is fairly scarce. Methods like [http://en.wikipedia.org/wiki/Monte_Carlo_methodhttp://en.wikipedia.org/wiki/Monte_Carlo_method Monte Carlo Simulations] can be used to create efficient frontier charts in order to best as possible choose risk/return balance within the portfolio. These numerical methods are however often associated only with risk (known unkowns) and not uncertanties (unknown unknowns). </br> | ||
Revision as of 15:21, 23 November 2014
This article is an overview and summary of relevant body of knowledge concerning risk management in project portfolios. Project portfolio management (PPM) is the set of managerial activities that are required to manage a collection of projects and programs needed to achieve stratetic business objectives.[1] It has been widely accepted that Risk Management is an important part of Project Management. Project risk management enables an organisation to limit the negative impact of uncertain events and/or to reduce the probability of these negative events materialising, while simultaneously aiming to capture opportunities [2]. However, project risk management is only effective to a limited extent because it lacks a portfolio wide view. [3] The information available regarding risk management at portfolio level is fairly scarce. Methods like Monte Carlo Simulations can be used to create efficient frontier charts in order to best as possible choose risk/return balance within the portfolio. These numerical methods are however often associated only with risk (known unkowns) and not uncertanties (unknown unknowns). </br>
Risk Integration at Portfolio Level
In order to
History
- ↑ Blichfeldt & Eskerod, 2008; Project Management Institute, 2008b
- ↑ Petit. ”Project portfolios in dynamic environments: Organizing for uncertainty.” International Journal of Project Management, 539-553 (2012)
- ↑ Teller, Kock & Gemünden. "Risk Management in Project Portfolios Is More Than Managing Project Risks: A Contingency Perspective on Risk Management". Project Management Journal, 67-80 (2014)
