Why Project Risk Management?


Risk management is essential for a wide variety of development and production projects because certain information about key project cost, performance, and schedule (C,P,S) attributes are often unknown until late in the project. Potential risk issues that can be identified early in the project that will potentially impact the project later, are often termed "known unknowns" and can be alleviated with a good risk management process. For those problems that are beyond the vision of the project team(s), such as an unanticipated budget cut (often termed "unknown unknowns"), a good, properly implemented risk management process can help to rapidly quantify the problemís impact and develop sound plans for alleviating its affect.

Risk management is concerned with the outcome of future events, whose exact outcome is unknown, and with how to deal with these uncertainties (e.g., a range of possible outcomes). In general, outcomes are categorized as favorable or unfavorable, and risk management is the art and science of planning, assessing (identifying and analyzing), handling, and monitoring future events to ensure favorable outcomes. Thus, a good risk management process is proactive in nature, and is fundamentally different than crisis management (or problem solving), which is reactive. In addition, crisis management is a resource-intensive process that is normally constrained by a restricted set of available options. This is in part because the longer it takes for problems to surface within a project, the fewer options to resolve them typically exist. And the adverse C,P,S impacts associated with those options are likely to be substantially greater than if the issues had been identified much earlier in the project. (This is in part because C,P,S cannot be traded perfectly in the short-run.)

Risk management is an important skill that can be applied to a wide variety of projects. In an era of downsizing, consolidation, shrinking budgets, increasing technological sophistication, and shorter development times, risk management can provide valuable insights to help key project personnel plan for risks, alert them of potential risk issues, analyze these issues, and develop, implement, and monitor plans to address the issues long before the issues surface as problems and adversely affect project cost, performance, and schedule.


We will work with your personnel to effectively implement project risk management and related disciplines.


 
Back to top

Links to Project Risk Management Services

Home Page

How We Can Help

Overview of Services

Why Risk Management?

Why Do It Well?

Papers and Presentations

Some Client Profiles

Synopsis of Experience

Risk Management Training

About Dr. Edmund H. Conrow

Code of Ethics

Risk Management Links

Second Edition of Dr. Conrow's Risk Management Book with Reviews

Risk Management e-Interview by International Council on Systems Engineering

Links to Other Services

Additional Services

Synopsis of Additional Experience

Additional Papers and Presentations

 


This web site owned and operated by:

Dr. Edmund H. Conrow, CMC, CRM, PMP
P. O. Box 1125
Redondo Beach, CA 90278


info@risk-services.com
Tel: (310) 374-7975

 

Reproduction or any other use of this material is prohibited without written permission.

This material is Copyright © 2000-2014 by Edmund H. Conrow, All Rights Reserved