4 December 2009

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New Standard Provides Good Practices on Risk Management

Project risk management reflects the fact that certain events or conditions, whether expected or unforeseeable during the planning process, may cause your project to either positively or negatively deviate from its intended goals.

Project risk management processes allow you to plan for these events by describing them in terms of probability of occurrence and identifying critical success factors – resulting in more realistic project results.

PMI’s recently released Practice Standard for Project Risk Management provides a benchmark for project management that defines the aspects of project risk management that are recognized as good practices on most projects most of the time.

The core team included Cynthia Ann Berg, PhD, PMP; David T. Hulett, PhD; David Hillson, PhD, FRSA, FIRM, PMP; and Crispin "Kik" Piney, BSc, PMP.  The Practice Standard for Project Risk Management outlines the principles of effective risk management for project managers, project team members, supervisors and stakeholders:

• Plan risk management;
• Identify risks;
• Perform qualitative risk analysis;
• Perform quantitative risk analysis;
• Plan risk responses;
• Monitor and control risks.

 “Whenever I think of risk management I go back to the Boy Scout motto—‘Be prepared!’ You can't do that without doing good risk management,” says Berg.

“We hope what we’ve produced will help others to manage their risks more effectively,” says Hillson.

The standard covers risk management as it is applied to single projects only. It does not cover risk in programs or portfolios. This practice standard is consistent with A Guide to the Project Management Body of Knowledge (PMBOK^® Guide)—Fourth Edition and is aligned with other PMI practice standards.

Different projects, organizations and situations require a variety of approaches to risk management. There are several specific ways to conduct risk management that are in agreement with the principles presented in this practice standard.

Practice Standard for Project Risk Management is available at PMI.org/Marketplace at a member price of US$44.75.