A balance sheet for projects
a guide to risk-based value--part 2
This article continues the discussion (from PM Network, May 2000) of using a project balance sheet as a powerful project management tool for returning value to the project investors. The project balance sheet displays the business investment on the left side, and the project scope and risk on the right. The process of conducting a risk analysis is described in detail. Given a project completion date or budget, a project manager can use statistical estimation within a risk analysis to find a data point with which to reach agreement with management. From the standpoint of the project balance sheet, the project manager's task is to beat the risk analysis' quantitative prediction, and bring the project in for the value assigned by management.