Risk A Potential Event That May
Risk: A potential event that may have a detrimental effect on time, cost, quality and deliverables.
Issue: This is an unpredicted event that requires a decision otherwise a negative effect on the project may result.
Risk management - general approach
Risk management is something that all projects need. The depth of planning may vary. It is not easy. What general approaches can you think about?
Typical areas where risk (see also 'The Complete Risk management package') will require assessment are:
Project based (resources, deliverables, outcomes, implementation, overall program)
Health and safety (see health and safety in project management)
Environmental effects
Property
Business / commercial / financial
Data
Security
Legal
Risk management is all about trying to address areas of uncertainty that may affect the project outcome. Uncertainty can express itself in varying ways e.g. range of costs, durations, differing pathways dependant on the outcome of certain assumptions and results.
In its simplest form, major risk areas are identified and consideration is given to minimising their impact. A risk may be low and acceptable, it may be high and require the preparation of contingency plans.
Typically, budgets may be inflated (say 10%) to take account of the perceived risk… but how do we know this is high enough?
Back up plans may take a long time (see 'The Complete Time management package') to prepare and may still be fallible. The project team and stakeholders may agree to alter the scope of the project or the specification of the product. All of this requires careful consideration by the project team, risk management outcomes (see also 'The Complete Risk management package') being documented and agreed by the stakeholders.
With more up front effort risk management can use a statistical approach to better evaluate the effect of a range of costs and durations for major activities leading to a superior assessment of the overall risk to the project
Issue: This is an unpredicted event that requires a decision otherwise a negative effect on the project may result.
Risk management - general approach
Risk management is something that all projects need. The depth of planning may vary. It is not easy. What general approaches can you think about?
Typical areas where risk (see also 'The Complete Risk management package') will require assessment are:
Project based (resources, deliverables, outcomes, implementation, overall program)
Health and safety (see health and safety in project management)
Environmental effects
Property
Business / commercial / financial
Data
Security
Legal
Risk management is all about trying to address areas of uncertainty that may affect the project outcome. Uncertainty can express itself in varying ways e.g. range of costs, durations, differing pathways dependant on the outcome of certain assumptions and results.
In its simplest form, major risk areas are identified and consideration is given to minimising their impact. A risk may be low and acceptable, it may be high and require the preparation of contingency plans.
Typically, budgets may be inflated (say 10%) to take account of the perceived risk… but how do we know this is high enough?
Back up plans may take a long time (see 'The Complete Time management package') to prepare and may still be fallible. The project team and stakeholders may agree to alter the scope of the project or the specification of the product. All of this requires careful consideration by the project team, risk management outcomes (see also 'The Complete Risk management package') being documented and agreed by the stakeholders.
With more up front effort risk management can use a statistical approach to better evaluate the effect of a range of costs and durations for major activities leading to a superior assessment of the overall risk to the project