Premium
RISK AND OPPORTUNITY MANAGEMENT
Author(s) -
Forsberg Kevin,
Mooz Harold
Publication year - 1996
Publication title -
incose international symposium
Language(s) - English
Resource type - Journals
ISSN - 2334-5837
DOI - 10.1002/j.2334-5837.1996.tb02057.x
Subject(s) - risk analysis (engineering) , risk management , computer science , panacea (medicine) , project management , project risk management , process (computing) , schedule , context (archaeology) , management science , process management , project management triangle , operations research , engineering , business , systems engineering , medicine , paleontology , alternative medicine , finance , pathology , biology , operating system
Many people are searching for the secret to success in managing risks and opportunities on their project. Some hope for a panacea in computer tools including monte carlo simulations which provide probability distributions and confidence limits on the risks to be managed. However practitioners ultimately realize that there is no analytical “silver bullet” that solves the risk equation. Risk and opportunity management is fundamentally a judgmental process, in which the project manager must evaluate appropriate data using intuition, common sense (or uncommon sense), and team consensus to determine the best approach for the project and for the organization. While some risk and opportunity issues are complex, many are relatively straight‐forward and can be readily solved. It is the number of issues to be faced – and the constant addition and deletion of issues – combined with the technical, cost, and schedule pressures that make risk and opportunity management a challenging process in project management. In order to be consistently successful, the project manager and team must follow a defined process. While monte carlo simulations, decision tree analyses, and other computerized techniques play a vital role, they must be used in the context of the risk and opportunity management process, and then only to the extent necessary to support the decision‐making process. The objective of this paper is to describe the risk and opportunity management process in the context of project management.