Project Risk Management - ENGINEERING MANAGEMENT

What is Risk? A dictionary definition of risk is “the possibility of loss or injury”  Project risk involves understanding potenti...

Project Risk Management


What is Risk?
  • A dictionary definition of risk is “the possibility of loss or injury” 
  • Project risk involves understanding potential problems that might occur on the project and how they might impede project success 
  • Risk management is like a form of insurance; it is an investment
The Importance of Project Risk Management:
  • Project risk management is the art and science of identifying, assigning, and responding to risk throughout the life of a project and in the best interests of meeting project objectives. 
  • Risk management is often overlooked on projects, but it can help improve project success by helping to select good projects, determining project scope, and developing realistic estimates. 
  • Study has shown how risk management is neglected, especially on IT projects.
  • This study suggests risk management important to improve project success and prevent runaway project.
What is Project Risk Management (PRM)?
PRM goal: to minimize potential risks while maximizing potential opportunities. Major processes include:
  1. Risk management planning 
  2. Risk identification 
  3. Risk analysis 
  4. Risk response planning Risk monitoring and control
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