More Thoughts on Project Risk Management

The downside risk on projects is almost always more than the upside risk. Managing this risk is one the fundamentals of good project management practice. I have found that the more complex, large, constrained and mission-critical a project is, the greater is the need for structured risk management. Proper risk management entails a lot of work because it is much more than putting charts and weighted-average spreadsheets together. It involves active participation by team members and requires a dogged pursuit of issues, facts and alternatives by the project team. Risks have to be recognized, managed, reported, and mitigated. Detailed risk management requires follow-through with project sponsors and capturing information that relates to the project’s contractual drivers, economic factors, organizational resources and¬†technical deliverables.¬† It also demands a realistic understanding of the team’s capabilities along with the limits of the project’s supply chain.
Commercial risks include –

– Contractual
– Financial
– Regulatory
– Consents
– Reputation
– Legal
– Competitive Forces

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