All projects involve risk—the zero risk project is not worth pursuing. This is not purely intuitive but also a recognition that acceptance of some risk is likely to
yield a more desirable and appropriate level of benefit in return for the resources committed to the venture. Risk involves both threat and opportunity. Organizations that better understand the nature of the risks and can manage them more effectively cannot only avoid unforeseen disasters but can work with tighter margins and less contingency, freeing resources for other endeavours, and seizing opportunities for advantageous investment that might otherwise be rejected as ‘too risky’. Risk is present in every aspect of our lives; thus risk management is universal but in most circumstances an unstructured activity, based on common sense, relevant knowledge, experience and instinct. Project management has evolved over recent years into a fully-fledged professional discipline characterized by a formalized body of knowledge and the definition of systematic processes for the execution of a project. Yet project risk management has, until recently, generally been considered as an ‘add-on’ instead of being integral to the effective practice of project management.
This book provides a framework for integrating risk management into the
management of projects. It explains how to do this through the definition of
generic risk management processes and shows how these processes can be
mapped onto the stages of the project life cycle. As the disciplines of formal
project management are being applied ever more widely (e.g., to the management
of change within organizations) so the generic project risk management
processes set out here will readily find use in diverse areas of application.
The main emphasis is on processes rather than analytical techniques, which are already well documented. The danger in formalized processes is that they can become orthodox, bureaucratic, burdened with procedures, so that the practitioner loses sight of the real aims. This book provides the reader with a fundamental understanding of project risk management processes but avoids being overprescriptive in the description of the execution of these processes. Instead, there is positive encouragement to use these generic processes as a starting point for elaboration and adaptation to suit the circumstances of a particular application, to innovate and experiment, to simplify and streamline the practical implementation of the generic processes to achieve cost-effective and efficient risk management.
Contents:
Part I Setting the scene
1 Uncertainty, risk, and their management 3
2 The project life cycle
3 Motives for formal risk management processes
4 An overview of generic risk management processes
Part II Elaborating the generic process framework
5 Define the project
6 Focus the process
7 Identify the issues
8 Structure the issues
9 Clarify ownership
10 Estimate variability
11 Evaluate overall implications
12 Harness the plans
13 Manage implementation
Part III Closing the loop
14 Risk management initiated at different stages in the project life cycle
15 Effective and efficient risk management
16 Ownership issues: a contractor perspective
17 Organizing for risk management
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