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COMMENTARY ARTICLE

Why knowledge and experience of leading risk management practices makes project management organisations more competitive in the market place

By Robert J Chapman PhD, FIRM, FAPM, FICM

Dr Chapman and Associates Limited

United Kingdom

 


 

Introduction

Given that across all industries the raison d’etre for project management is to manage risk and uncertainty to secure a project’s objectives, then a project manager’s grasp of a project’s risk exposure, how it will change over time and how it will be managed, will be of acute interest to a project’s sponsor. Particularly as poor project risk management has been repeatedly identified as the sole or contributing factor to poor project performance. Those project management organisations that can demonstrate that they have both knowledge of and experience in the application of leading risk management practices must as a consequence place themselves in a very competitive position. It may be the differentiator, what sets one project management firm from another.

However knowledge and application of risk management is very varied across the project management community. Despite national and international professional membership associations clearly indicating the contribution of risk management to effective project management, risk management is often viewed as tedious, overly bureaucratic and unproductive. Yet it is comprehension and management of threats and opportunities that will determine if a project is completed on time, does not exceed its budget and satisfies its quality requirements. Project managers are not immune from litigation and fees are called into dispute where stated objectives are not realized

The frequently cited extract from Sir Michael Latham’s report “Constructing the Team” still rigs true “Risk can be managed, minimised, shared, transferred or accepted. It cannot be ignored”.

Effective project risk management

Apart from an awareness of the leading risk management practices there must also be an awareness of what contributes to effective project risk management and similarly how the benefits of risk management can be undermined by a lack of attention to the potential pitfalls. Thirty five common factors which may undermine effective risk management are listed below. It is not an exhaustive list. A project manager’s lack awareness of these factors and the appropriate remedies will diminish the likelihood of a successful project outcome.

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About the Author

pmwj41-Dec2015-Chapman-PHOTORobert J. Chapman, PhD

United Kingdom

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Robert J Chapman
is an international risk management specialist and Director of Dr Chapman and Associates Limited (http://www.drchapman-assoc.com/). He is author of ‘Simple tools and techniques for enterprise risk management’ 2nd edition, published by John Wiley and Sons Limited, ‘The Rules of Project Risk Management, implementation guidelines for major projects’ published by Gower Publishing and ‘Retaining design team members, a risk management approach’, published by RIBA Publications. He holds a PhD in risk management from Reading University and is a fellow of the IRM, APM and ICM and a member of the RIBA. He has provided risk management services in the UK, the Republic of Ireland, Holland, UAE, South Africa, Malaysia and Qatar on multi-billion programmes and projects. Robert has passed the M_o_R, APM and PMI risk examinations and provided M_o_R risk management training to representatives of multiple industries. He can be reached by email at [email protected]