Project Techniques and Risk Management

1894 Words8 Pages
2010

Project Techniques and Risk Management
A practical and effective approach

Eng. Hayder Issa
Engineering Contracts Management Engineering Arbitration Rule in Solving Disputes Post Graduate Certificate in Project Management - UK

Project Techniques and Risk Management
A practical and effective approach
Managing business risk means managing the protection of your employees, customers, property, information and the environment. Risk management is attempting to identify and then manage threats that could severely impact or bring down the organization. Risk management is all about keeping your risk under control. The more controlled your risk is, the more flexible you can be when you need to be. Traditionally,
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Define Risk Management Milestones 5. Define risk rating/scoring techniques Page 2

6. Establish risk thresholds 7. Define risk communications 8. Define risk tracking process Risk Management and Project Selection Techniques Two commonly used project selection techniques are Benefit Measurement Models and Mathematical Models, i.e. (Mathematical Models used for extremely complex projects). In the workplace, Benefit Measurement Models are more often used. Some techniques in this category are: (1) Cost-benefit analysis: Which provide a net gain. Typically, the net gain is proportional to the risk level, i.e. the higher the risk, the higher the gain. (2) Weighted Scoring models: Risk of Incompletion is a factor that needs to be considered when comparing projects, using the Weighted Scoring Model for Risk Management and Project Selection to help you select a project. (3) Cash flow analysis: Takes into account the payback period, AND (4) Time Value of Money: Uses Net Present Value (NPV) and Internal Rate of Return (IRR). Generally, the higher the NPV, the better the project is. There are positive risks in every project that require knowing how to respond to them. Risk Management and Project Selection should also account for positive risks. Risk Identification Risk identification is the process of understanding what potential events might hurt or enhance a particular project. The customary origins
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