Risk management is one of the most critical functions that every PM and every business leader must focus on. This article will focus on some common mistakes to avoid when managing project/organizational risks.
We’ve already looked at the opportunities agile methods offer for proactive risk management and examined the benefits of engaging the whole team in risk management through collaborative games. As our agile risk management series continues, we walk through those games and explains how to engage a team in the first three of the six risk management steps.
Risk management is a challenge for construction professionals due to the shortage of qualified manpower, limited resourceful contracting agencies (technical and commercial), and the scarcity of resources. This article aims to explain risk management principles, the implementation of a risk management plan, and strategies to overcome threats and turn around the perception of risks from negative to positive opportunities.
This webinar continues a series by Dr. Vijay Kanabar, PMP, for beginning practitioners who seek to learn more about the PMBOK® Guide Knowledge Areas. We’ll cover project risk management and review the five elements of the project risk management plan
Oftentimes, project managers are talking about risks and it seems that no one is listening. Learn to use the risk management process to affect the project in a positive way using these four guidelines.
Program management is a relatively young discipline within the project management profession. That means there are fewer tools and techniques to address the challenges of program risk. At the same time, the larger responsibilities of program managers mean greater disruption from risk events. Consider the following findings about the state of program management…
Just what we all need: more BS in our work lives. Basically Semantics, that is! Program Management and Project Management, Quality Assurance and Quality Control…it’s all enough to make your head spin. Here’s a crash course to help you stay atop the definition debate.
Project managers can facilitate benefits realization and–more strategically–the project management function. That encompasses the three Ps of project management, which can play the crucial but often missing organizational role that will embed benefits realization in strategy execution and–by extension–program and project delivery.
Organizational risk management requires alignment across all levels of execution, including project, programs, portfolios and the PMO. This includes consistent reporting and approval processes as well as a culture that facilitates communication among team members, senior executives and stakeholders.
Through your own intuition and “sixth sense,” you are managing risks in a project without even knowing it. Learn how intuition replaces risk management rigor in resource-constrained environments.
Risk management allows a company to strike a balance where growth and related risks are in line with the strategy and objectives of the company. In order for these processes to function efficiently and effectively, there must be enterprise-wide commitment and involvement in day-to-day risk management activities. Properly implemented, risk management can immediately add value to your company.
This article explores the highlights and interactions of risk management over the other areas of project management in a comprehensible manner and projects it over common “real” project situations.
Risk management is often discussed, but it is amazing how few project managers truly embrace the process. This article presents an overview of risk management in context to project management, and shares some guidance on the components that should be considered when implementing a risk management process framework.
Few project leaders want to spend the up-front time and money to actually put together a risk management plan, but it truly needs to be your first step in effectively managing risks on your project. Your planning needs to include four steps in order to be effective and in order to be a “sellable” tool in your PM process.
In the midst of the global economic crisis, some risk takers are being taken to task, and rightfully so. But not all risk is bad. Moving forward, what is the appropriate role of risk management and risk specialists?
Multidimensional project control systems, which integrate the critical to quality metrics of the project quality management, risk management, and program integration requirements into the earned value management system, delivers capability for the enterprise project team(s) in measuring the performance-based earned value of the project deliverables.
Last month we looked at how agile methods provide multiple opportunities for embracing proactive risk management. This month’s article extends risk management beyond the project manager role and introduces the benefits of making it more of a collaborative team exercise.
Continuity risks directly impact an organization’s ability to continue its services or objectives. Drawing on the best practices of business continuity management (BCM), the author explains how formulating a responsive plan to manage continuity risk provides benefits to robust project performance.
Agile methods incorporate many mechanisms for dealing with late-breaking changes that also lend themselves to proactively responding to risks. Here we explore how these methods make effective risk management easier to implement.
While others may not fully appreciate the need for pre-planning of risks, with appropriate risk management in place, serious risks can be intercepted before they have a chance to do great damage.
Poor risk management can be fatal to any project. But what happens when properly planning for risk factors really is a matter of life and death? This article examines how the staff at Children’s Memorial Hospital in Chicago moved more than 100 critically ill children from an aging facility to the new Ann and Robert H. Lurie Children’s Hospital of Chicago.
To reduce the negative risks on a project, is it really necessary to follow every PMI Project Risk Management process? While the answer may be “perhaps not,” this article explores the processes that need to be clearly understood to successfully answer PMP/CAPM exam questions.
Although the metrics used to communicate risk mitigation and ROI are different, the reality is that–despite it being a lightweight framework–Scrum puts a much greater emphasis on these two areas than waterfall.
Pursuing overseas or cross-borders business requires an understanding of the country and political risk—it is, indisputably, a key consideration. The author demonstrates how PMI risk management processes and best practices can be customized to expand the picture of country political risk assessments, identification, analysis and monitoring.
One of the unsung PMO functions is managing risk. There are a lot of aspects of risk management where the PMO can provide tangible support to project managers in their endeavors. In this article, we explore some of that support in terms of identification, analysis and response.
Fast tracking can shorten a project’s schedule or easily cause rework to be required. It is of utmost importance to carefully weigh the risks prior to deciding whether or not fast tracking is the right option for the project. A quantitative estimate for calculating the monetary value translates the risk into hard currency.
Not all project teams have the luxury of adequate time and budget to clearly define all elements of a project prior to starting delivery. This is not to say project managers shouldn’t be very detail oriented, but rather look for a balance between building a detailed plan and the business need to quickly deliver.
There are four characteristics that every organization must possess to make enterprise risk management work. Some of these prerequisites will take more time to develop than others, but that shouldn’t keep you from getting started with a pilot effort that can show the way.
Visual Ishikawa Risk Technique (VIRT) is a technique that is consistent with the Identify Risks process group of the PMBOK® Guide and uses a risk breakdown structure as its main principle artefact. However, it differs in that it uses the Ishikawa diagram (commonly also known as a fishbone, or cause and effect diagram), for the risk structure, to create a graphic view, as opposed to being text based or tabular.
We can’t simply equate risk management to the project’s risk register. In truth, risk management starts the moment we make any estimate about a project’s future state. One easy way to make probabilistic estimates for project uncertainties is to use Statistical PERT®.
In his Getting Project Risk Management Right webinar, Mario Trentim explained that we have to understand what project risk management is and what it is not so that we can get project risk management right. The session was packed with information, and here we cover the questions and answers that came out of that webinar.
Controlling risk is the name of the game for traders and investors. Learn the various strategies by which investors can manage the risks associated with options, including controlling position size and learning when to walk away.
From the Times: The failure of financial institutions to manage risk and the role this has played in creating today’s economic crises has created awareness of the need for a new risk-management approach. This may well become the new Holy Grail of financial economics. There are two essential constituents: first, developing a more diverse mindset regarding financial risk; and second, applying more powerful techniques to capture financial reality than risk managers have used in the past. A new method for risk management does not mean that all elements of the present system must be replaced or that all the discredited financial instruments they spawned should be discontinued. Discrimination is needed: Many existing techniques have validity, but only in certain market conditions; and innovative financial products can contribute to wealth creation, but only if they are used judiciously. A new approach must start by understanding the reasons for the failure of risk-management systems. Why did risk models grossly understate risks? Why did managements fail to understand this? And why did regulators fail to provide effective checks and balances against the banks’ risk-management mistakes? ( Read the entire article.)
NEW YORK–(BUSINESS WIRE)–The vast majority (85 percent) of corporate executives say they need to overhaul their approach to risk-management if the lessons of the economic crisis are to be used to improve business results, according to results of an Accenture (NYSE: ACN) study released today. Accenture’s 2009 Global Risk Management Study, based on a survey of 260 chief financial officers, chief risk officers and other executives with risk-management responsibilities at large companies in 21 countries, also found that 40 percent of respondents said that their companies already have increased or will increase their investments in broader risk-management capabilities in the next six months. Nearly another third (31 percent) of respondents said their companies are currently considering increasing their future investment in risk management capabilities. Read the full release.
The process of risk management not only involves controlling the threats or reducing their negative effects. It is a much deeper concept that also involves risk avoiding as well as risk taking.
A good risk management plan carries number of tools and strategies to mitigate risk. The strategy may be to avoid risk or transfer a component of it another project so that the impact is reduced.
Risk Management is the process of minimizing the risks in an organization. It starts with the identification and evaluation of risk followed by optimal use of resources to monitor and minimize the same.
Outsourcing or contracting out non-core services may deliver good results and substantial benefits to the organization. Nowadays, many company employ external sources and utilize their specialized services.
Portfolio Selection and Risk Management from Rice University. When an investor is faced with a portfolio choice problem, the number of possible assets and the various combinations and proportions in which each can be held can seem overwhelming. …
Portfolio and Risk Management from University of Geneva. In this course, you will gain an understanding of the theory underlying optimal portfolio construction, the different ways portfolios are actually built in practice and how to measure and …
Financial Engineering and Risk Management Part II from Columbia University. Financial Engineering is a multidisciplinary field involving finance and economics, mathematics, statistics, engineering and computational methods. The emphasis of FE & …
Financial Engineering and Risk Management Part I from Columbia University. Financial Engineering is a multidisciplinary field drawing from finance and economics, mathematics, statistics, engineering and computational methods. The emphasis of FE & …
The alignment of project management activities with project risk appetite can be a powerful tool to help illustrate and communicate the relationship between these two important areas. Adopting a more formal process to frame and document project risk appetite can maximize positive outcomes.
There are many tools available to assess project risk. However, the tools may be used infrequently due to the lack of a prescriptive risk management protocol coupled with an abundance of options. The author details the relative benefits of the Risk Fishbone Diagram and the Enhanced Risk Assessment Matrix (ERAM), and explains why they may be the only two tools necessary to facilitate risk management for most projects.
In today’s rapidly changing corporate environment, innovative projects often must be completed in a very short time frame. After a thorough analysis of different methods and tools, the authors developed the Risk-Driven project management method (RiD) to facilitate the creation of complex enterprise value. Applying the 12-point maturity-value-success metric (12-point MVS metric) can help ensure proactive risk monitoring.
With rapidly changing business environments and multiple employees making a myriad of daily decisions, companies are always at some risk. Dr. Stephen Cohen offers 10 general guidelines for managing risk.
Engineering Project Management: Risk, Quality, Teams, and Procurement from Rice University. Many Project Managers focus only on the scope, schedule and budget. However, a successful project requires that you manage risk, control the quality of …
What exactly is organizational risk management, how does it differ from project risk management, and why should project managers care? In this new series, we will explore these questions and introduce some important related concepts, starting with the constraints hierarchy.
A “shock wave” may be defined as “a major issue that occurs close to a milestone while everything seems to be quiet.” This article provides practical suggestions for combining the science of project management, especially the “verification and control” step for mitigating risk, with the art of project management, leadership skills, in order to better manage shock waves and make the right decisions throughout the project life cycle.
When the going gets tough in project risk management, you have to get tough with your tactics. Get the key participants you need in the session through proactive invitee management. Get the risks identified during the session by using pre-selected, mentally stimulating terms and phrases.
Starting with the expectation that all projects should succeed is misguided because it hinders risk-taking and creativity. True innovation is built first on failure. Still, risk management has an important role to play in every project.
Projects are not equally risky, and your risk management process should be scaleable to match the level of risk challenge faced by each. How? Here are the elements of a typical risk management process that can be readily scaled to fit the needs of a range of projects.
The terms “project management” and “change management” are often used interchangeably. But at best, the core functions and skills merely serve to complement one another. Failing to recognize the differences (and when one and not the other is needed) is a risk—not only for a project, but also for the organization.
Our 12-part series on organizational risk management concludes with a call to action — it starts with assessment and identification … leads to investment, buy-in and ownership … and makes use of tools and concepts like the risk profile, capacity and constraints hierarchy.
Positive risks always exist, whether or not they are detected or recognized by the project management team. In the context of IT project/program risk management practices, project team(s) are predominantly focused on negative risk identification, related priorities, the probability of occurrence, and associated impact on the project goals/objectives and risk response–planning strategies such as avoid, mitigate, transfer, and accept to address the negative risks. It is important that the project management team is cognizant of the risk/reward duality and that they implement the positive risk/opportunity management integration rigor into project systems development life cycle (SDLC) processes.
When it comes to risk management, hope is not a strategy … all single point estimates are wrong … and communication is everything. Understanding these principles and two others are the only way to turn risk management theory into meaningful practice.
This article presents a structured approach to managing the risk of losing critical knowledge due to resources becoming unavailable for the project. For key resources, the activities of this approach are ideally carried out even before the project is fully ramped up and before project risk management is fully underway. The four sequential processes-initiate, analyze and plan, execute, and close-ensure that the project’s risk exposure to knowledge loss is effectively reduced in an efficient way.
Risk management is the process that allows IT managers to balance the operational and economic costs of protective measures and achieve gains in mission capability by protecting the IT systems and data that support their organizations’ missions. The purpose of performing an IT risk assessment for IT systems is to minimize any negative impact to an organization and provide a sound basis for management decision making. Effective risk management must be totally integrated into the software/system development life cycle.
Don’t let today’s risks become tomorrow’s problems, and don’t sit back and wait for events to happen. Take a proactive approach to managing uncertainty. In this article, you will learn how and why using this risk management approach can greatly increase the chances of delivering your project on time and on target.
Embedded products for automotive applications typically follow a very rigid development process. The details vary from Original Equipment Manufacture (OEM), however, the need for risk mitigation is the same. Development for vehicle systems can be quite costly. Additionally, mistakes can have a heavy impact on quality perception as well as legal ramifications.