Project Risk

What is project risk?

Be careful how you say it!

·      In project work

·         Always refer to project risk

·      Why?

·         Because use of the term "risk" (i.e. on its own) typically refers to risk as defined in the insurance industry

·         Which commonly refers to something happening to you that you don't like!

·      Project risk is a special case of risk

·         The risk of the project not being successful

·         We'll deal with the insurance sort in a later Issacon

Dual meaning

·      In the literature, risk is often used to imply simply failing to fall into line with the project plan

·         Either over or under

·      This is really normal project progress evolution

·         And management's responsibility to track and control

·         After all, schedules and budgets are only based on best estimates

·         To be handled by management strategy, tactics and contingencies

Risk in Progress Evolution

·      If your project is viewed as unsuccessful simply because

·         It fell behind schedule

·         Or went over budget

·         Perhaps due to poor estimating

·         Or to lower than planned productivity

·      Such situations are evolutionary - not events

·         That's not usually part of formal project risk management

·         That's the project team's management responsibility

Event Oriented Project Risk

·      While risk is the possibility of an undesirable outcome

·         Formal Project Risk Management usually focuses on "Risk Events"

·      Thus

·         Project Risk is the cumulative effect of the chances of adverse events which could affect the projectís objectives

·         Or, the degree of exposure to untoward or turbulent events and their probable consequences

Appropriate Risk Event Response

·      Note the use of the word "events"

·      For identifying, analyzing and mitigating unplanned events

·         Or better still, avoiding them altogether

·         Adopt some degree of formal project risk management

·         And be ready with an appropriate response

Evolution versus Events

·      As your project evolves

·         It may well fall behind schedule

·         And run over budget

·         Requiring corrective action

·      If, however, the corrective action fails and you miss a mandated deadline as a result

·         That is indeed an "event"

·         For which you would be well advised to have a good risk management plan!