Introduction

Why would a company care about project risk management? Project managers are already busy enough and extensive discussions on risks could prove to be only a nuisance. The answer is simple: good risk management is very profitable.

Surveys show that time and time again many projects run over budget and deliver inferior products. Consequently, the project teams have increasing burdens. Active risk management provides a method to cope with the increasing complexity and short leadtimes that are present in today’s projects. Risk management allows you to obtain control of the uncertain events that may affect your project. This prevents project disasters happening, and enables you to utilize certain opportunities that arise.

Who should read this book

This handbook is written for project managers, and provides the necessary tools to apply risk management in projects. The emphasis is on how to deal with project risks. Short tests provide instant insight into important issues for their project and organization. Risk methods are briefly explained and clarified with examples.

The handbook is also recommended for senior managers and consultants. They will find the tools to assess the need for project risk management and how well risks are managed within projects and companies. The book also gives tips to avoid common pitfalls that companies encounter when they implement project risk management. Risk Analysts will find a useful overview of the
analytical methods that are available and will learn their advantages and disadvantages of these. This allows them to select the best method for the job at hand.

How this book is organized

The risk process and the risk concept are central to this handbook. Chapter 1 describes the core concepts and added value of risk management and is the best start for any reader. Chapter 2 deals with the introduction of risk management in your company and is interesting if you are about to apply risk management for the first time or want to implement it thoughout your company. Chapters 3 and 4 explain how to setup risk management in your project and how to identify risks. This information is especially valuable for project managers. Chapters 5, 6 and 7 explain how to prioritize risks and what type of analysis you can use to understand them better. This knowledge will help you to choose the methods that have the best return on investement for your project. It will also enable you to ask the right questions to risk management experts.

Responses to risks and risk tasks are addressed in Chapter 8 and 9. You will learn what responses to consider and which measures have the highest impact in certain situations. Also an overview is given of useful decision-making methods. The final chapter is about learning and evaluating your risk management efforts. This will help you to improve risk management in new projects and to take your company’s projects to a higher level.

Your project

A handbook like this is only valuable if you use the available information and suggestions it contains. You may be able to apply some parts of this handbook directly to your own project practice. However, each project is unique and you will therefore need to adjust certain information to the special circumstances that you encounter. If so, you should use the handbook as a source that outlines the possibilities and their advantages and disadvantages.