DESPITE RISK AND UNCERTAINTY, PROJECTS CAN CONTRIBUTE TO PROFITABILITY, GROWTH AND THE REPUTATION OF THE ORGANISATION.
ARGUE THE CASE THAT DESPITE RISK AND UNCERTAINTY, PROJECTS CAN CONTRIBUTE TO PROFITABILITY, GROWTH AND THE REPUTATION OF THE ORGANISATION.
INTRODUCTION
Risk is any factor that may potentially interfere with successful completion of the project. A risk is not a problem-a problem has already occurred; a risk is the recognition that a problem might occur. By recognizing potential problems, the project manager can attempt to avoid a problem through proper actions. Project Management is the skills, tools and management processes required to undertake a project successfully. Stakeholders are persons or organizations that are actively involved in the project, or whose interests may be positively or negatively affected by the project.
Organizations take risks to benefit from potential opportunities however; these opportunities involve an element of risk. Projects entail a level of uncertainty and therefore carry business risk. Every project has risks. Organizations that succeed are the ones that plan for those risks – anticipating, mitigating, and providing response and contingency plans for negative events that may or may not occur. Risk Analysis solutions provide the tools for doing just this, enabling companies to identify, assess and model risks – and, in the process, taking much of the uncertainty out of project and portfolio management.
A project risk can be defined as an uncertain event or condition that, if it occurs, will have a positive or a negative effect on a project’s objectives. Identifying risk in the planning stage enables better project selection decisions and more accurate budgeting and scheduling, (Oracle white paper,2010). Risk assessment is critical to understanding the impact of risk and uncertainty on project schedule and cost. Once risks are identified and assessed, the next step is to develop a response plan. Typical mitigation actions include adding time to the schedule, deploying more resources on the project, bringing in outside
INTRODUCTION
Risk is any factor that may potentially interfere with successful completion of the project. A risk is not a problem-a problem has already occurred; a risk is the recognition that a problem might occur. By recognizing potential problems, the project manager can attempt to avoid a problem through proper actions. Project Management is the skills, tools and management processes required to undertake a project successfully. Stakeholders are persons or organizations that are actively involved in the project, or whose interests may be positively or negatively affected by the project.
Organizations take risks to benefit from potential opportunities however; these opportunities involve an element of risk. Projects entail a level of uncertainty and therefore carry business risk. Every project has risks. Organizations that succeed are the ones that plan for those risks – anticipating, mitigating, and providing response and contingency plans for negative events that may or may not occur. Risk Analysis solutions provide the tools for doing just this, enabling companies to identify, assess and model risks – and, in the process, taking much of the uncertainty out of project and portfolio management.
A project risk can be defined as an uncertain event or condition that, if it occurs, will have a positive or a negative effect on a project’s objectives. Identifying risk in the planning stage enables better project selection decisions and more accurate budgeting and scheduling, (Oracle white paper,2010). Risk assessment is critical to understanding the impact of risk and uncertainty on project schedule and cost. Once risks are identified and assessed, the next step is to develop a response plan. Typical mitigation actions include adding time to the schedule, deploying more resources on the project, bringing in outside
References: Oracle white paper, A Standardized Approach to Risk Management Improves Project Outcomes and Profitability, April 2010 Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA 94065 U.S.A. Dennis P. Slevin and Jeffrey K. Pinto, Balancing Strategy and Tactics in Project Implementation ', Sloan Management Review, Fall, 1987, pp. 33-41, Kenneth K. Humphreys, Project Risk Management - Advantages and Pitfalls Pe Cce Dif, n/d. Schultz, R. L. and Slevin, D. P. "Implementation and Management Innovation," in Implementing Operations Research and Management Science, ed. Schultz, R. L. and Slevin, D. P. (Elsevier. New York, 1975), pp. 3-22. Manley. J. H. "Implementation Attitudes: A Model and a Measurement Methodology." in Implementing Operating Research and Management Science, ed. Schultz. R. L. and Slevin, D. P. (Elsevier. New York, 1973), pp. 183-202. Oracle White Paper, The Benefits of Risk Assessment for Projects, Portfolios, and Businesses,June 2009. Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA 94065 U.S.A. Bauer M. Project Success Factors. Retrieved from www.martinbauer.com/Articles/How-to...Project/Project-Success-Factors on 21March 2014. Project Management Planning,January 1997. Retrieved from www.cioarchives.ca.gov/.../PM3.10_Planning_Risk_Managem... On 22March 2014. Ernst & Young Global Limited, Effective mining and metals capital project execution,The consequences of risk. U.K Retrieved from www.ey.com on 19 March 2014.