Project Risk Management

Topics: Project management, Risk management, Management Pages: 6 (1794 words) Published: February 24, 2012
Project Final

1. Why should all projects include risk in their project planning? What are some of the drawbacks if risks are not considered? Technology projects worldwide are costing companies billions of dollars more than they budgeted for, and almost half don’t live up to the clients’ expectations (Kendrick, 2009). Newspapers and business trumpet few project successes, but a massive number of failures. As projects grow larger and more complex with every passing year, their outcome, both successes and failures, become fodder for the media and the competition. Unfortunately, project failures tend to predominate as they not only make sensational stories, but also are far more common. The mismanagement of projects to develop the geographic information systems that companies use to run their businesses has been going on for years and the situation has not improved. “The management of projects is still treated in a very amateurish way,” said Nigel Kelly, a partner in KPMG’s IT practices (Roberts, 2011). Wold & Shriver (1997), state some of the drawbacks if risks are not considered could be, but not limited to the following: * Schedules based on product need instead of required engineering effort * Size estimates typically low, resulting in schedule estimates that are too short * Requirements change not managed

* Lack of motivating work environment
* Poor management project prioritization
* Lack of experience in leading software intensive projects by management, leading to incomplete teams * Lack of dedication to software quality (misguided focus on schedule; quality focus on testing, not early defect removal) * Lack of disciplined work environment

* Conflict within the stakeholder community
* Lack of discipline on the development team
* Maintaining control of changing requirements over long time periods * Improperly assuming software schedule must match hardware schedule * Application complexity
* Development environment changes from historical baseline * Other activities (e.g., process improvement program)
* Development process not capable
* Underachievement
References
Kendrick, T. (2009). Identifying and Managing Project Risk (2nd. ed.). New York: American Management Association. Roberts, T. (2011, Jun 08). Project Management Guide. USA.
Wold, G. H., & Shriver, R. F. (1997). Risk Analysis Techniques. Disaster Recovery Journal .

2. What does project risk management mean in the context of project management? Describe project risk management as a component of the project management process. Risk management focuses on potential failures in a project. Project management is focused on success of the opportunities. "If the project manager is busy "managing" the risks, there is little time to manage opportunities ignoring half the "management in the presence of uncertainty" equation" (Alleman, 2005). Risk management is a continuing process of proactively identifying risks with the hopes that you avoid failures. By actively monitoring potential risks, we can avoid failures in a project. It fits into project management and its nine knowledge areas. Risk Management and Project Management are compliments to each other. "Both disciplines make important contributions to successful business outcomes" (Gack, 2006). “You can't Project Management without having Risk Management. In two of the groups of knowledge areas, project risk management is included” (Kendrick, 2009). This is the Planning Processes and Controlling Processes. When should Risk Management be performed? Risk Management should be performed before, during and while the "work is being done" (Mulcahy, 2004). While every attempt should be made to identify the risks during the planning stages, "one missed risk, can lead to many missed risks" (Mulcahy, 2004). When this occurs, there is typically a problem with either the risk management plan and/or the implementation of the plan....

References: Mulcahy, Rita, Projects@Work (August 26, 2004), Risk Management, Tricks of the Trade® for Project Managers is a publication of RMC Publications, Inc... [Electronic Version] Retrieved on May 22, 2006 from http://www.projectsatwork.com/article.cfm?ID=219659
Gack, Gary A., is a managing partner in Six Sigma Advantage in based in Narragansett, Rhode Island (USA), 2006, " Six Sigma and the Project Management Body of Knowledge", [Electronic Version] Retrieved on May 22, 2006 from http://software.isixsigma.com/library/content/c040721b.asp
Kendrick, Tom, 2009, "Identifying and Managing Project Risk", New York, New York.
Alleman, Glen B. (September 22, 2005), "Risk/Opportunity" [Electronic Version] Retrieved on May 22, 2006 from http://www.projectsatwork.com/content/articles/227118.cfm
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