Management of risk in projects
Contents |
Introduction and relevance
Humanity has always been seeking the unknown. By moving to foreign places, trying new methods and challenging the old ways, our race has accumulated knowledge for exponential improvement. But for all improvements, and all journeys into the unknown, there will be risks. Some risks will be hard to avoid, some will hardly affect the outcome, and some will have disastrous consequences. In projects, there will always be an unknown factor. It may vary from different projects, but there will always be risks hiding somewhere. While the risks themselves are unavoidable, much can be done to reduce both chance and impact. That is the art of risk management, which is vital for project management. In the worst case, failing to identify and treat risks will cause the project to fail. It is worth remembering that projects which aim to set new standards may have to accept critical risk. Columbus, the Wright brothers and the crew of the Apollo 11 all knew that their projects might cost them their lives. No matter how careful these expeditions were planned, the risk could never be eliminated. But by being aware of the risk, it allowed these pioneers to take preventive action, and reduce the chance of paying the ultimate price. Luckily, most projects do not have the lives of human beings at stake, but the life and outcome of the project is always at stake. That is why risk management is an essential part of project management.
This wiki article will further define risk and outline the benefits of handling the risks in a project. Furthermore, it will give tools to perform a risk analysis and manage the risk. [This section will contain short summary of article once it is completed]
Definition
Definition of the term risk, and a comparison of the related subject uncertainty. Defining and debating risk as Risk = probability * consquence
Benefits
The arguments for using risk management in projects
The risk analysis
Elaboration on how a risk analysis is performed, and how it can be used as a management tool for steering and controlling
Management of risk
How the project leader can handle the risks in the project in an optimal way, by using the risk analysis as a management tool
Limitations and critique of risk management
Drawbacks of giving risk management too much attention in project management
