Chapter 10. Project Risks
10.0 Learning Objectives and Overview
- Define project risks and differentiate between risk types.
- Identify risks that may occur during the implementation of a project.
- Describe the process to create a project risk management plan.
- Conduct a qualitative risk analysis.
- Develop and implement risk responses based on identification and analysis of risks.
Although project managers can prepare a well-thought-out and comprehensive project scope, schedule and cost management plans, they cannot ensure that all these plans are free of problems that may occur due to numerous reasons during the project. Even the most carefully planned projects can run into trouble. No matter how well we plan, our project can always encounter unexpected problems. Team members get sick or quit, resources that we depend on turn out to be unavailable, even the weather can throw us for a loop (e.g., a snowstorm). So, does that mean that we are helpless against unknown problems? No! We can use risk planning to identify potential problems that could cause trouble for the project, analyze how likely they are to occur, take action to prevent the risks we can avoid, and minimize the ones that we can’t. In this chapter, we will discuss both negative risks (i.e., threats) and positive risks (i.e., opportunities). A project manager must always keep in mind that risks mean uncertainties, not solely problems or threats all the time, since they are sometimes opportunities that we should consider exploiting. There are no risk-free projects because there is an infinite number of events that can have a negative or positive effect on projects. Project managers must be prepared to deal with uncertainties. Planning for events that can delay a project, decrease its quality, or increase its budget is a necessary part of project planning.