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Visit Audio Recordings for the audio version of this section. Risk is the possibility of loss or injury. There are no risk-free projects because there are an infinite number of events that can have a negative effect on the project. Risk management is not about eliminating risk but about identifying, assessing, and managing risk. Managing project risk Tzvi Raz, Aaron Shenhar, and Dov Dvir 3 studied risk management practices on one hundred projects in a variety of industries.
To manage projects effectively you need to be able to recognize and manage risk. All projects have some degree of risk because predicting the future with certainty is impossible.
The benefits of risk management in projects are huge. You can gain a lot of money if you deal with uncertain project events in a proactive manner.
However, project risk is greater. The longer the time is between preparing your project plan and starting the work. The less experience you, your organization, or your team members have with similar projects.
In other words, anything that can cause you either to fall short of or to exceed your established project targets, if it occurs, is considered a risk.
While some approaches for analyzing and responding to both types of risks are similar, this chapter presents approaches for identifying, evaluating, and managing negative risks. In this chapter, the term risk always refers to a negative risk or threat, unless managing project risk noted.
Risk management is the process of identifying possible risks, assessing their potential consequences, and then developing and implementing plans for minimizing any negative effects. Take the following steps to determine, evaluate, and manage the risks that may affect your project:. Decide how you can protect your project from the consequences of risks.
Determine whether existing risks are still present, whether the likelihood of these risks is increasing or decreasing, and whether new risks are arising.
Understanding and Managing Risk in Your Project.Which is why so many projects—especially large technology projects—run into trouble. When studies tell us that easily half of all IT projects run over budget and past deadline, we see how easily risk turns into real trouble for projects and their organizations. Create a risk register for your project in a spreadsheet. Susanne Madsen November 30, Risk and uncertainty are inherent parts of all project work. And, people start asking for you to run their projects!