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Project Risks - Reasons for a Risk Management Tool

Projects are complex activities involving change, risk and the interaction of many different groups of people. As such project activity tends to generate significant amounts of data and information frequently driven by the uncertainty surrounding change.

Project management processes provide a structured framework in which to carry out a project. They provide the benefit of giving people clarity in how to approach the challenges of a project. Whilst processes are very valuable, they do not solve the problem of how to organise the large amounts information-surrounding projects, which is where quality software tools come in to play.

The most frequently used project management tools are called planning tools and provide functionality for planning the activities, interdependencies and resources on a project. This set of tools, which includes MS-Project and Primavera, are typically graphical facilitating the creation of Gantt charts, and are of some use to the project manager. As this area is well catered for it is not our concern.

Another common area of requirement on projects, particularly large and complex projects, is configuration management. The configuration may be of a product, a set of documents, or a software package. Again this area, whilst of some interest, is well catered for.

Many of the processes used to organise a project activity effectively revolve around multiple team members recording multiple pieces of information for the action and attention of other team members, stakeholders, and managers. This information falls into several categories. Most projects soon have to find a way to organise all the information being generated.

The tools they use to do this are varied and typically include, for example, lotus notes databases (rigid, difficult to report and centrally developed), and MS-office templates, most commonly Excel, but possibly Access or at a very simple level MS-Word. In these cases there is no control, no defined structure, and high levels of manual intervention to obtain the right “views” and reports of information.

Why management of risk is important?

Balancing RiskA certain amount of risk taking is inevitable if your organisation is to achieve its objectives. Effective management of risk helps you to manage projects and improve operational performance by contributing to:

  • increased certainty and fewer surprises
  • better service delivery
  • more effective management of change
  • more efficient use of resources
  • better management at all levels through improved decision making
  • reduced waste and better value for money
  • management of contingent and maintenance activities.
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