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Risk Management


Location:  PMKI > PMBoK Knowledge Areas > Risk Management. 

This subject covers the processes involved in the identification and management of risk within a project or program to achieve and maintain a risk profile acceptable to the key stakeholders. For more on risk theory see: Section 3.

The PMKI Library

Topics included in Schedule Management:

- Plan risk management
- Define the risks, potential responses and contingencies (risk register)
- Implement risk responses
- Monitor risks
- Useful external web-links

Other related sections of the PMKI:

- TBA.
 
 


 

 


Temporary Subject List - this page is being rebuilt:

  • Risk management:  
    • Mosaic's Risk Management home page
    • PMI's Practice Standard for Risk Management
    • Mosaic's list of annotated Risk web links
    • PP: The Meaning of Risk in an Uncertain World. This paper describes the key aspects of risk management needed from the client, the contracting organisation and the project to optimise overall risk management in a complex environment.  
    • Prs: Risk Management and Complexity Theory - The Human Dimension of Risk. The key aspects of risk management from the perspective of complexity theory and human interactions, with a view to optimising the overall risk management for a project and its host organisation.   
    • Prs: Portfolio governance and risk – it’s all about the stakeholder. There is no such thing as a ‘risk free’ project and the art of portfolio management is to balance the risks and rewards of investing in projects, whilst keeping the overall risk exposure at a level that is acceptable to the organisation, and still generate the expected rewards.   
    • PP: Construction - A Risky Business. This paper identifies some of the factors creating risk in the Australian construction industry and suggests ways to better align risk and reward.    
    • PP: Risk Attitudes in the Construction Industry - Avoidance Does Not Work. Most client organisations are excessively risk averse, and in their attempts to avoid ‘all risk’ expose themselves to more adverse outcomes than if they actively embraced and managed risk.  
    • WP: Risk Management. Managing risks is important because it focuses attention on the uncertainties that matter. This paper looks at the core elements of risk management.  
    • WP: Types of Risk. Risks fall into four broad categories and are created by a variety of factors outlined in this paper.     
    • WP: Risk Assessment. Risks always involve uncertainty, and matter because they have the potential to affect objectives. This means that each risk must be linked to at least one objective and its potential impact assessed objectively.  
    • WP: Probability. Modern risk management practices have developed analytical methodologies to determine the probability of events occurring (or not occurring) that allows contingencies to be calculated based on mathematical certainties.  
    • WPIssues Management. An issue is a current problem that will negatively impact the successful delivery of the project if it is not managed effectively, but issues are not all equally important.   
    • WP: Root cause analysis. Some valuable techniques for understanding the root cause of a problem or an issue in complex situations.  
    • Art: Predicting Future Project Outcomes - The power of uncertainty. Understanding the way Monte Carlo, Latin hypercube and Sampling work to inform risk management decisions. 
    • Art: Distributed -v- Consolidated Contingencies - The power of Portfolios. The effect of combining uncertainties into a ‘portfolio’ of risks is to reduce the overall level of uncertainty in the portfolio. 
    • Art: Risks don't add up.  Understanding that there difference between an individual project risks, the overall risk of a project and the risks associated with a portfolio of projects is complicated but essential for effective risk management.  
    • Art: Standard Deviation for Project Managers.  The concepts behind Standard Deviation and how it is used.  
    • Blg: Stakeholders and Risk. One of the interesting similarities between stakeholder management and risk management is the challenge of knowing what we know and more importantly understanding what we don’t or can’t know.    
    • Blg: Stakeholder Risk Tolerance. The skills that a mature organisation brings to the art of ‘risk management’ is to focus effort on managing risks that can be managed, providing adequate contingencies for those risks that cannot be controlled and deciding how much residual risk is sensible.    
    • Blg: Black Swan Risks. The key definition of a ‘black swan’ proposed by N.N. Taleb is that the ‘black swan’ was unpredicted and unpredictable, but in hindsight it appears that it should have been foreseeable.   
    • Blg: Real Risk Management.  Is any real difference between a bet on which raindrop will reach the bottom of the window first and responding to a bank’s suggestion to fix (or un-fix) the interest rate on your home mortgage?    
    • Blg: Resilience v Risks. Resilience is the ability of a system to return to its original state after being disturbed. Build resilience into you business unit or project team and you have the capacity to deal with the consequences of unforeseen risks.    
    • Blg: The Schedule Compliance Risk Assessment Methodology (SCRAM). SCRAM focuses on schedule feasibility and root causes for slippage. It makes no judgment about whether or not a project is technically feasible.   
    • Blg: Stakeholders and Reputational Risk. Your reputation is created in the minds of other people - creating it, managing it, and protecting it is hard work.  
    • Blg: The language used to define risks can contribute to failure. A corporate culture that prevents the honest description of a risk or allows imprecise definitions is a significant threat to pragmatic risk management.    
  • PERT and Monte Carlo:   
  • Contingencies and Reserves:   
    • Blg: The flaw of averages. The flaw of averages defined in a book of the same name states that any plan based on average assumptions is wrong on average!     
    • Blg: Averaging the Power of Portfolios. The interaction between dependent risk and independent risk is interesting and will significantly change the overall probability of success or failure of an endeavour or organisation.    
    • Art: Distributed -v- Consolidated Contingencies - The power of Portfolios. The effect of combining uncertainties into a ‘portfolio’ of risks is to reduce the overall level of uncertainty in the portfolio.  
       

Useful external web-links

  • External Link - to be added
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