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Risk Management |
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Risks, unmanaged, invariably
lead to a more costly solution and schedule delay |
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What is Risk? |
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Management of Risk in
Workshops |
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Risk is anything that could affect a
business, program or project in terms of cost and time, whether
predictable or unpredictable.
Risk is a term that can mean different
things to different people, and a clear understanding of what a risk
actually is can be quite difficult to achieve. Common words related to
risk include:
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"Hazard", "Source", "Cause" |
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"Consequence", "Impact", "Effect" |
There is no standard usage, as yet, of
terms in risk management but all of the above relate in some way to
"Cause" and "Effect" and provide a means to proper risk definition. The
TEAM FOCUS Group uses its own RID approach to proper risk definition which
enables everyone to understand precisely what each risk is, whether at the
time of identifying it, or at a later date. Single word definitions are
never adequate.
The TEAM FOCUS Group provides
Risk Management Training. |
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The management of risk features in many
workshops run by the TEAM FOCUS Group. The intent is usually, to follow a
Qualitative Risk Analysis approach:
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To identify as many risks as possible
that may influence a business, program or project, involving
representatives from major stakeholders, and develop a Risk Register |
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To classify such risks and also to
identify interfaces |
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To establish the relative
significance of risks in terms of probability and consequences |
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To establish for "significant" or
"critical" risks, the options available to mitigate them,
agreeing an action plan. |
A Quantitative Risk Analysis
approach can be used in addition:
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To assess their overall potential cost and
delay, using statistical methods e.g. Monte Carlo method, Root Mean
Squared method. |
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Risk Management and Value Management |
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Risk Follow up |
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Risk Management is about the avoidance of
unnecessary cost and time. Value Management is about the enhancement of
value, leading possibly to cost savings.
There are strong links between
Risk Management and Value Management, inasmuch as failure to consider
risks during Value Management may not lead to the best value solution.
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Was the project generated as a result
of known risks? |
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Can ideas focus on how to get round
known risks? |
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Evaluation criteria may need to address
those ideas which are more risky |
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Risk allowances should be included in
life cycle costing to compare "like with like".
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 The
golden rule is to "plan ahead" with the greatest benefit from risk
management being at the start.
Having identified the significant risks and
an action plan for them,
there is no benefit unless there is a will to continue to review them and
manage them so as to mitigate them. |
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The importance of the continued
management of risks cannot be over-estimated, whether in business, whether
in programs of work, or in projects. Reducing risks increases
reliability.
The TEAM FOCUS Group runs Risk
Management Workshops for live projects and as training sessions. Further
information can be obtained from
The TEAM FOCUS Group practitioner nearest
to you. |
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