Risk Management

8th January 2013

Risk?

Risk can be defined as the combination of the probability of an event and its consequences. (theirm, 2013)

As shown by Institute of Risk Management Risk Management Standard is the result of work by a team drawn from the major risk management organizations. (theirm, 2013)

Risk management is important because:

• projects are, by definition, risky enterprises
• implications of project ‘failure’
• use of estimates/assumptions

What risks do projects face?

–>strategic risks

•project abandonment

•massive over-run/over-spend

•loss of client confidence/future business

–> operational risks

•constant change/replanning/inefficiency

•over-run/over-spend low morale/unacceptable working conditions

Risk Management Process

•Risk planning

•adopt risk management approach/policy

•identify  mechanisms to identify risk factors

•Risk identification

•identify tasks

•predict effect on baseline plan

•Risk analysis

•assess likelihood of specific risks

•assess impact of specific risks

•Risk response

•plan possible responses to risk occurrence

•develop contingency/fallback measures

•Risk action

•implement risk reduction measures

•monitor risk factors 

How to identify risks?

–must be a precise definition

–must be capable of being measured

–must have measurable impact

 How to analyze risks?

•  

Reference List

1. http://www.theirm.org/publications/documents/Risk_Management_Standard_030820.pdf
2.  

Images

1. http://www.vallevistaag.com/events.htm