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project risk management - PROJECT RISK MANAGEMENT KEEP IT...

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PROJECT RISK MANAGEMENT KEEP IT SIMPLE TO ENHANCE PROJECT SUCCESS James A. Ward, PMP Risk refers to uncertain future conditions or circumstances that may adversely impact a project if they occur. A risk represents the possibility, not the certainty, of a future event affecting the success of a project. Risk is inherent in all projects. By effectively managing risk, the project team can reduce the likelihood of occurrence of an adverse event and the impact on the project should such an event occur. Risk management is a repeatable, structured process that identifies and systematically addresses risks to minimize their affect on projects. RISK MANAGEMENT DEFINED Per PMI’s PMBOK, “Project risk management is the systematic process of identifying, analyzing, and responding to project risk. It includes maximizing the probability and consequences of positive events and minimizing the probability and consequences of events adverse to project objectives. It includes the processes of risk management planning, risk identification, qualitative risk analysis, quantitative risk analysis, risk response planning, and risk monitoring and control.” The Implementation and Execution section of the Risk Management Plan describes the procedures for dealing with risk for Information Technology projects. It follows the Project Management Institute i Project Management Book of Knowledge ii (PMBOK), recognized as an industry standard for Project Management. The Tools section of the Risk Management Plan describes the procedures for Information Technology projects. PURPOSE OF RISK MANAGEMENT The Risk Management Plan as defined in this document addresses IT projects and their sub- projects. The Risk Management Plan documents the procedures to be performed by the project team as the organization’s risk management process. A proactive project team tries to resolve potential problems before they occur. This is the art of risk management. The purpose of risk management is to identify the risk factors for a project and to then establish a risk management plan that will minimize the probability that risk events may occur and that, should they occur, their impact on the project will be minimized. James A. Ward & Associates, Inc. 1
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ASSUMPTIONS All projects have risks. Risk is inherent to project work. In any given organization or environment, projects will have common risks. In developing a risk management plan for a project, other projects should be reviewed for risk occurrences that can be anticipated and avoided. Not all identified risk events will occur. Some risk events may occur more than once in the life of a project. Project teams should perform risk identification processes at project inception, at the start of major project phases or iterations, and when significant changes to the project occur, such as changes in project scope or key personnel.
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