Key Points

Project-risk management controls special-cause variation through monitoring, prevention, mitigation, or insurance. Key points emphasized in this chapter are:

• CCPM simplifies project risk management by eliminating the need to address common-cause variation. CCPM risk management only addresses special causes of variation.

• You must include a risk management process in your project work plan. You should scale the implementation of risk management to overall project risk.

• Project risks must identify the risk event, the probability of the event occurring, and the potential impact or consequence of the risk event to the project.

• CCPM project plans help to define the relative risk in terms of the project buffers.

• The project team must decide among options, including prevention, mitigation, insurance, monitoring, and ignoring risks.

Risk monitoring, prevention, and preparations for mitigation should be part of your project plan. You should assign specific responsibility to monitor risk throughout the performance of the project and update your risk plan as appropriate.

References

[1] PMI, A Guide to the Project Management Body of Knowledge, Newtown Square, PA: PMI, 2000.

[2] Wideman, R. Max, Project and Program Risk Management, A Guide to Managing Project Risk and Opportunities, Newtown Square, PA: PMI, 1992.

[3] Meredith, Jack R. and Samuel J. Mantel, Project Management, A Managerial Approach, New York: John Wiley and Sons, 1985, pp. 68-71.

[4] Wysocki, Robert K., Robert Beck Jr., and David B. Crane, Effective Project Management, New York: John Wiley & Sons, 1995.

[5] Deming, W. Edwards, The New Economics, Cambridge, MA: MIT Press, 1993.

[6] Hilson, David. "When Is a Risk Not a Risk: Part 2," available at http://www.risk-doctor.com/pdf-briefings/risk-doctor07e.pdf (accessed June 22, 2004).

[7] RiskTrak, Risk Services & Technology, Amherst, NH, 03031.

[8] Bernstein, Peter L., Against the Gods, The Remarkable Story of Risk, New York: John Wiley and Sons, 1996.

[9] Kahneman, Daniel, Paul Slovic, and Amos Tversky, Judgment under Uncertainty: Heuristics and Biases, Cambridge: Cambridge University Press, 1982.

[10] Belsky, Gary, and Thomas Gilovich, Why Smart People Make Big Money Mistakes, and How to Correct Them, New York: Simon & Schuster, 1999.

[11] Russo, J. Edward, and Paul J. H. Schoemaker, Decision Traps, The Ten Barriers to Brilliant Decision Making, and How to Overcome Them, New York: Simon & Schuster, 1989.

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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