Managing Risk in Programs and Projects
Formal risk management in project management has become a topic of great
interest within the past 10 or 15 years. The outcome, schedule, cost, and
environmental factors affecting projects are never completely certain, so the
challenges are how best to identify and mitigate the areas of greatest risk
during the life of any given project.
"The goals of risk management, therefore, are to identify project
risks and develop strategies which either significantly reduce them or take
steps to avoid them altogether. At the same time, steps should be taken to
maximize associated opportunities. In essence, it involves planning which
minimizes the probability and net effects of things going wrong, and carefully
matches responsibility to residual risks that are unavoidably retained. It is
a very constructive and creative process" (Wideman, 1992, p I-2).
"Instead of considering uncertainty as a necessary evil, it should
be considered as an extremely important, inspiring and useful factor given its
inherent opportunities for making improvements and taking measures against
risk. In the author's opinion, uncertainty is likely to hold some of the
greatest potential for improving management skills and efficiency today "
(Lichtenberg 1990, p 21).
Enterprise Resource Planning (ERP) Applications and Project Management
ERP applications (offered by SAP, Oracle, PeopleSoft, and others) provide
enterprise-wide information about people and other resources that must be well
integrated with project management software applications. Linking ERP with the
corporate project management planning and control system is probably the most
effective way to integrate all projects with other non-project operations
(manufacturing/production, sales/marketing/distribution, field service,
corporate staffs, and so on) in project dependent organizations.
To be continued
In Part 3 of
this series, I shall discuss:
- Individual capabilities in project management: What is the state of
project management education, training, and certification of individual people
who specialize in project management?
- Project teams: What is the importance of teamwork in project
management and how is it best achieved?
- The "profession" of project management: Is this a management
discipline or a true profession?