Strategic Thought

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 Program & Project Management

Project risk management is considered by many to be the foundation of all risk management. The activities of an entire organisation can be thought of as a collection of individual projects of differing size and importance, but all coming together to ensure the continued running of the business as a whole.

The definition of project risk management provided by our own client NASA in their corporate online library is as follows:

"The whole point of undertaking a project is to achieve or establish something new, to venture, to take chances, to risk."
(Project Management Body of Knowledge (PMBOK), 1987)

“Project risk management seeks to anticipate and address uncertainties that threaten the goals and timetables of a project. The uncertainties may include questions of material and parts quality; delays in delivery of sufficient materials to meet project needs; budgetary and personnel changes; and, incomplete knowledge or research. These risks lead rapidly to delays in delivery dates and budget overages that can severely undermine confidence in the project and in the project manager. Since project risk management is process oriented, it remains possible to have a successful project and an unsuccessful product (for example, an office construction project that meets or beats all time, budgetary, and quality requirements yet opens in a depressed real estate market.) While any project accepts a certain level of risk, regular and rigorous risk analysis and risk management techniques serve to defuse problems before they arise.”

Benefits of Programme and Project Risk Management:

• Enable better informed and more believable plans, schedules and budgets.
• Increase the likelihood of a project adhering to its schedules and budgets.
• Use the most suitable type of contract.
• Allow a more meaningful assessment of contingencies.
• Discourage the acceptance of financially unsound projects.
• Contribute to the build-up of statistical information to assist in better management of future projects.
• Enable a more objective comparison of alternatives.
• Identify and allocate responsibility to the best risk owner.
• Improve corporate experience and general communication.
• Common understanding improved team spirit.
• Help distinguish between good luck/good management and bad luck/bad management.
• Help develop the ability of staff to assess risks.
• Focus project management attention on the real and most important issues.
• Facilitate greater risk-taking , thus increasing the benefits gained.
• Demonstrate a responsible approach to customers.
• Provide a fresh view of the personnel issues in a project.
• Good on-time delivery means results in increased customers