Thesis Statement Risk Management is the process of identifying, analyzing and responding to risk factors throughout the life of a project and in the best interests of its objectives (Stanleigh, 2015). This paper is focused on the trends and methods of managing risks in a project. It also analyzes different ways of mitigating risks in a project and why risk management is important in an information technology (IT) environment. Key words risk management, mitigation, and information technology Overview Introduction Risk management has been one of the major concerns of executives and professionals involved with projects today, especially after the financial crisis that shook the world in 2008.The results of ex-post assessments of project or even verification of lost business opportunities for companies are clear signals that this evidence has become more intense (Junior, 2013). Although risk management can be implemented in practically every type of project, this paper focuses mainly on IT projects. Risk management …show more content…
Risk mitigation is also the process of controlling actions, which are identified, and selecting the suitable ones to reduce risk according to project objectives (Pa, 2015). Risk mitigation is important in IT organizations in so many ways. According to Ahdieh, Hashemitaba, Ow (2012), mitigation of risk provides a mechanism for managers to handle risk effectively by providing the step wise execution of the risk handling (as cited in Pa, 2015, pg. 49). Some risks, once identified, can readily be eliminated or reduced. However, most risks are much more difficult to mitigate, particularly high-impact, low-probability risks. Therefore, risk mitigation and control need to be long-term efforts by IT project managers throughout the project lifecycle. There are three types of risk mitigation strategies that hold unique to Business Continuity and Disaster
All organizations and industries experience risk exposure, from both internal and external events. Accordingly, with outcome speculation being uncertain, organizations can experience either negative or positive effects. In general, the IS31000 defines risk as the “effect of uncertainty on objects” (Elliott, 2012 p.1.4). Consequently, the application of risk management practices helps minimize the effects of risk uncertainty on an organization and is accomplished through coordinating an organization’s activities by establishing control and creating policies in regards to risk. Risk’s most evident category is hazard risk which encompasses risk from accidental loss. In addition, operational risk stems from controls,
Hillson, D. & Simon, P., (2012). Practical Project Risk Management, The ATOM Methodology: Second Edition. Vienna, VA: Management Concept Press
Projects are widely used by many organizations and government institutions in the course of conducting their business. One of the reasons for this is because they have been proven to be effective in initiating change and translating strategic programs into daily activities. However, it has been established that most projects fail to deliver on time, budget, and customer specifications. In most cases, this failure is caused by over-optimism by the project management team. This over-optimism commonly referred to as optimism bias can simply be defined as overestimating the projects benefits and conversely underestimating its cost and duration time. Research have portrayed that this is often caused by failure to properly identify, understand, and manage effectively the risk associated with the project therefore putting its success at jeopardy(Mott McDonald, 2002). Fortunately, this biasness can be detected and minimized during the project gateway process.
To me, in my projects, risk management is a key success factor. I think it 's never too early to start talking about risk in a project. People tend to be very optimistic. By really enumerating the risks and how the will be mitigated and what "plan b" might look like, I think you will have a better project. I always try to have what I can an "Eeyore" on my projects. This is the team member who always sees the cloudy side. I assign this person the job of risk management. This person will identify risks and mitigations and be responsible for ensuring all risks are mitigated as the project progresses.
Hillson, D, & Simon, P. (2012). Practical project risk management: The ATOM methodology (2nd ed.). Vienna, VA.: Management Concepts.
Scope - The scope of this document pertains to the Knowledge Management System Project and its internal and external risks. The risk management methodology identified in this document will be primarily used by the PPW Company project team and it will be used during the entire project. The vendor’s risk management methodology will be provided as a contractual deliverable and they will develop their own separate Risk Management Plan. The vendor will be responsible for managing their project risks and reporting any such risks to the project team.
A good project risk management involves control of possible future occurrence. Project risk management is one of the skill most necessary and an area any project manager has to be competent in, for success in organizational projects. Project risk is an unexpected event that in case it happens hurts the objectives of a project (Whitman, Mattord, 1997). Although every Company must have a project at one time after every few months, in many organizations Project risk management is undeveloped and more attention is put on risk management of the entire firm’s operation. Normally, project risk management is a continuous process meant to identify a problem and a resolution. It includes planning, budgeting, organizing and also cost control. With all this control, surprises are reduced because the emphasis is now on proactive instead of reactive
The key purpose of project management is to used current software to predict as many risks and problems as possible; and then to plan task and assign resources so that the project is completed as ordered by the customer or client while keeping within the time frame given. Project managers must deal with the ever-present element of risk, both foreseen and unexpected, the use of project management means some of this risks can be identified in good time and so a solution can be created before the risk has a chance to happen. On large scale or very complex projects, a well skilled project manager will be able to use project management software to decide rather or not the overall aim of the project is even possible with the budget and resources given.
Project risk management is a necessary, and often overlooked, the function of a project manager. It combines the art and science of identifying, analyzing, and responding to risk throughout the project lifecycle, resulting in project improvements and ultimate success. Risk, at its core definition, is the possibility of loss or injury. What project risk management is not, however, is crisis management. Crisis management is the team’s response when a project’s risks are realized. Good risk management can help to overcome a potential crisis by proactively identifying risks. This paper will identify three possible risks to the team project, estimate the impact of risks in quantity and quality, select a method of risk management for the risks, preventions for the risks and what could be done to lessen the impact.
Any company in any field has already been faced risk at least for a single time. Risk management will be vary according to the situation created by the Activity. For instance, a new technology would be developed for a smartphone company like hand gestures and the schedule indicates six months for this activity, but the technical employees think that nine months closer to the truth. If the project manager is proactive, the project team will develop a contingency plan right now. They will develop solutions to the problem of time before the project due date. However, if the project manager is reactive, then the team will do nothing until the problem actually occurs. The project will approach six months deadline, many tasks will still uncompleted and the project manager will react rapidly to the crisis, causing the team to lose valuable time. Proper risk management will reduce not only the likelihood of an event occurring, but also the magnitude of its impact.
This paper will reflect on the different uses of Project Risk Management and ways in which it can benefit organizations to have the ability to identify potential problems prior to the problem occurring. Risk, this is not something to be taken lightly whilst dealing with matters that include high end projects meeting specific details, deadlines and expectations for the end client. Project risk management teaches one to be aggressive early on in the phases of planning and implementing the tools for a project. This is usually easier as costs are less and the turnaround time to solve the issues at that present moment is beneficial rather than later. The result in a successful project for one’s self and other key people involved in the process is also another requirement. Stakeholder satisfaction is important because the
Almost every project has some degree of risk and project managers strive to keep the human risk factor minimized and in check. According to Hillson and Webster, Risk management requires human judgement and therefore cannot be managed by machines or robots (2016). Both humans and machines are capable of analyzing information, but humans are still necessary to evaluate the information and make a decision based on their best judgement. The most well thought out and planned project can be adversely effected by the human risk factor and the decisions made by individuals involved with the project.
...f project. Furthermore, the successes of a project can be guarantee by identifying the procurement variables that have a major influence on risk management such as project delivery method, form of payment, and the use of collaboration or partnering arrangements. However, many projects suffered from variations in cost affecting in the present which is the risk management was not carried out consistently throughout the project stages. Nevertheless, in the projects with early involvement of the clients and their participation, the chances for open talks and collaboration throughout suitable procurement selection can produce an efficient risk management procedure for the project. While project delivery methods define formal risk allocation, the use of incentives and collaboration or partnering arrangements help to establish a collaborative approach to risk management.
Here we will discuss risk management in the construction sector and in execution of construction project, project risk management is one of the most critical phase for successful completion of the construction project. Risk can be both negative and positive for the project. Negative risks are considered as threats and positive risks are taken as opportunities.
In this competitive world, companies have to deal with various types of risk all the time with there projects. Generally, it affects the budget and schedule of the project. So it is important to keep in mind the risk management strategies while creating an initial project plan.