Fundamentals of Risk Management

Fundamentals of Risk Management

Fundamentals of Risk Management
Fundamentals of Risk Management 

Fundamentals of Risk Management PDF Download Free

The primary purpose for the formal risk management process is to provide the Project Manager and the Department with the necessary tools to assess and manage project-related risk. When risks are understood and their consequences are measured, decisions can be made to allocate risks in a manner that minimizes costs, promotes project goals and ultimately aligns the project team with the project needs and objectives.

Project Risk Management Objectives

The Risk Management Guideline has been designed to:
  • Be simple and easy to use
  • Be scalable to project size and complexity 
  • Incorporate risk communications across delivery process phases
  • Actively manage risk to enhance project success 
  • Integrate into the current project delivery process 
  • Involve all functional units in the management of risks
The formal risk management process helps the Project Manager to manage project risks over the life of each project, enlisting the support and effort of all of the functional units as the project moves along the CPD process. This includes:
  • Better ability to focus time and effort on highest rated risks 
  • A scalable approach, consistent with existing processes 
  • Enhanced coordination and transparency with functional units, which facilitates early identification of critical risks

The following are the Critical Success Factors needed to achieve the desired risk management culture:

  • Capital Program Management (CPM) supports the honest, realistic and open recognition of project risks even if they indicate problems with the project. 
  • CPM needs to provide a clear, consistent message to staff regarding project risk tolerance. When employees aren't clear about an organization's risk tolerance, they may get mixed messages around risk, which can be a real danger to a culture of accountability. A lack of clarity and insight around risk leads to assumptions that could negatively impact business or a tendency to take on more risk than is prudent. 
  • The Executive Regional Manager works with the Project Manager to determine the appropriate level of risk management to be performed. 
  • The Project Manager promotes discussion in an atmosphere where there are no risks that are outof-bounds for discussion and no enforcement of bureaucratic hierarchy in meetings where risk identification and assessment is discussed. 
  • The Project Manager and Designer are committed to indentifying, describing and collecting realistic and high-quality data about risks. Risk data is often based on the judgment and expertise of informed individuals. It takes effort and organizational support to spend the time and resources needed to collect accurate data about project risk.

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