Rethinking Project Risk Management

Abstract

This chapter shows that there is a need to rethink project risk management. The current best practice for managing large projects focuses on major topics such as a phase-gated development process, governing documentation, team alignment, risk management, stakeholder management, and contract structure. The conventional thinking about project risk has led to much attention on the concept of front-end loading. The main philosophy behind this concept is to reduce the probability of cost and schedule deviations by fully defining the project before execution begins. A common approach for managing risk may contain four steps: identification of risk factors, risk analysis, risk action plan, and risk control. Management is about making decisions, and decisions introduce risk. The decision process and terms like uncertainty and risk are elaborated in this chapter.