Risk management should therefore be done early on in the life cycle of the project as well as on an on-going basis. They would base their judgment upon past experience regarding the likelihood of occurrence, gut feel, lessons learned, historical data, etc.Įarly in the project there is more at risk then as the project moves towards its close. Once the Project Team identifies all of the possible risks that might jeopardize the success of the project, they must choose those which are the most likely to occur. Surprises will be diminished because emphasis will now be on proactive rather than reactive management. This includes organization, planning and budgeting, and cost control. If risk management is set up as a continuous, disciplined process of problem identification and resolution, then the system will easily supplement other systems. The acceptance or non-acceptance of a risk is usually dependent on the project manager’s tolerance level for risk. The outcome is therefore a risk that is either acceptable or unacceptable. The system must also be able to quantify the risk and predict the impact of the risk on the project. Risk Management Systems are designed to do more than just identify the risk. When the 3 weeks deadline approached and it appeared that the work wouldn’t be completed, crisis management became the mode of operation. Unfortunately, this prevented their ability to successfully complete their tasks on time. No risk assessment was conducted to determine what might go wrong. It appeared an unrealistic timeline for the amount of work to be done but they were convinced that this would work. Nevertheless, the project team accepted it. So… this 3 week duration estimation was outside my boundaries. My approach to task duration estimation is that the lowest level task on a project whose total duration is 3 months or more should be no more than 5 days. The coding department refused to estimate a total duration estimation for their portion of the project work of less than 3 weeks. I was working on the installation of an Interactive Voice Response system into a large telecommunications company. Proper risk management will reduce not only the likelihood of an event occurring, but also the magnitude of its impact. The project will approach its six month deadline, many tasks will still be uncompleted and the project manager will react rapidly to the crisis, causing the team to lose valuable time. However, if the project manager is reactive, then the team will do nothing until the problem actually occurs. They will develop solutions to the problem of time before the project due date. If the project manager is proactive, the project team will develop a contingency plan right now. The schedule indicates six months for this activity, but the technical employees think that nine months is closer to the truth. Proper risk management implies control of possible future events and is proactive rather than reactive.Īn activity in a network requires that a new technology be developed. 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.
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