How important is project risk management?
Ideally, decisions are made in an environment of total certainty, where all necessary information is available for making the right decision, establishing the right projects, and predicting outcomes with a high degree of confidence. In reality, most decisions are made and projects are established without complete information, giving rise to some degree of uncertainty in the outcome. This uncertainty often translates into risk and the need for risk management. In today’s markets, with heavy competition, advanced technology and tough economic conditions, risk management assumes significantly greater importance.
Risk management is essential to good project management discipline.
In order to make the best decisions, we need to account for all risks involved that can determine project success or failure. As all stakeholders have a vested interest in the project’s outcome, it is important to understand their view of how risk management works:
In today’s economy project risk management is a hot topic. What is IBM currently doing to mitigate risk?
IBM has procedures that require risks to be assessed periodically and documented. Risk assessments are then reviewed with a “Quality Assurer” to establish an agreed-to risk rating for the proposal or project. A containment plan, which identifies actions to minimize the likelihood and cost of each risk, is subsequently developed, which includes actions for avoiding, containing, and monitoring each risk.Such an assessment is not just a one-time activity. Risk is a continuous process and needs to be monitored throughout the lifecycle of the project from inception to closure. IBM project managers follow practices similar to those recommend by the Project Management Institute (PMI).
On the other hand, as an innovative company, IBM also understands risks have a flip side. In current times, the market will favor companies which are not afraid to make bold decisions. More important than focus on mitigating all risks, it is important to understand the impacts, either positive or negative, and account for them in the decision-making process.
Do you feel that risk management plays an important role in achieving project success?
From risk identification to mitigation/closure, if risk is not handled properly, the chances for successful project completion with a happy customer and a profitable outcome for IBM are greatly diminished.To manage a project without performing some level of risk management is like sailing in the ocean without a compass. You may eventually get where you want to go but might eventually spend more resources than planned and will certainly undergo a great deal of psychological stress in the process.
Do you subscribe to PMI's Practice Standard for Project Risk Management and if so, how do you apply it?
At IBM, risk management is a mind-set. Our formal risk management process follows the key PMI risk steps: Plan, Identify, Analyze, Respond and Monitor/Control. Risk management is applied to all day-to-day questions and problems that come up during the project lifecycle, preventing a snowball effect that can jeopardize our main objectives.
IBM's project management methodology, World Wide Project Management Methodology (WWPMM) is based, among other sources, on A Guide to the Project Management Body of Knowledge (PMBOK® Guide) andPractice Standard for Project Risk Management.
Why did you pursue the PMI Risk Management Professional (PMI-RMP)®-credential?
Project managers within IBM are beginning to consider and pursue the PMI-RMP® credential. In fact, the Project Management Professional (PMP®) credential is the most recognized project management credential worldwide. PMI and the PMBOK® Guide have created a common language for project management worldwide.
Tina Hande, PMP®, PMI-RMP®
IBM India Pvt. Ltd.
DLF Infinity Towers, Gurgaon
NA IOT Solution Design Process Owner
IBM Certified Executive Project Manager
Global Technology Services Americas Elizeu Boto, PMP, PMI-RMP
IBM Global Business Services
Certified Project Manager, PMP
Account Manager (AIM)
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