All projects are subject to risk; it is inescapable.  From budget cuts and unfamiliar technology to changing requirements and staff turnover, risks that were not foreseen and planned for frequently cause major project issues and even failures.  Projects that fail to manage risk, or that manage it in an ad-hoc way, find themselves in perpetual crisis.  They never see it coming.

 

Risks, by definition, come from uncertainty, which makes managing them inherently difficult and ambiguous.  It is, therefore, doubly important to quantify the project's and the organization's approach to risk.  Risk management techniques strive to minimize the probability and control the impact of unfortunate events by identifying, assessing, mitigating and monitoring risk.  These techniques often call on measurement and metrics as aids in monitoring and tracking risks to identify any change in the status, or if they turn into an issue.  There is no doubt that monitoring and tracking risks is an important function of measurement, but it is also only part of what measurement can achieve when it comes to managing risk. 

 

To properly support risk management, a measurement process should be deployed to ensure the performance of risk planning, periodic monitoring and mitigation.  Making the most of what measurement has to offer significantly reduces the blind spots that exist in the practice of risk management.  Specifically, measurement can not only provide project progress updates, it can also establish a risk cost baseline, drive mitigation behavior and provide a historical basis for risk planning and analysis. Measurement establishes a transparent and uniform process to monitor and manage risk.

 

The benefits of quantifying risk extend through the current project to the next project and even across the organization.  A risk management process optimized with measurement is more effective and efficient as it increases confidence in estimates and decisions, aids in mitigation, reduces the number of critical risks, and ultimately allows projects to adjust risk reserves downward. With measurement, the risk management process becomes less subjective and more effective.

 

This presentation focuses measurement on four risk management blind spots and how to reap benefits by turning them into know-it-all opportunities.

 The aim of risk management is not to eliminate risk, rather it is to manage project risks to maximize opportunities and minimize the adverse effects of unfortunate occurrences so that performance improves and goals and objectives are more likely to be met.  Focusing the capabilities of the measurement process on the blind spots of risk management enables projects to pro-actively plan for and deal with risk factors rather than wait for problems to occur and then try to react.

 

Presentation slides will be available after the conference.  Contact sales@distributive.com for more information.

 

To learn more about the conference, please visit our Events calendar online at http://www.sei.cmu.edu/sepg/na/2010/