Risk Analysis
Every project has an element of chance. The identification of the prioritized possible risks and investigated solutions increases the likelihood of a successful project completion.
The uncertainty of possible outcomes can have a dollar value assigned. For example, the installation of a critical building component in a remote call center, such as a working heating and air conditioning system, are possible risks to the opening of a new facility on time.
Possible solutions to the risk are:
1. Identifying an experienced HVAC contractor with prior installation successes
2. Budget contingency for shipping in case the HVAC installation is delayed because of newer transportation logistics
3. Do not build the new facility.
Yes, not doing a project is a risk solution and has its own associated costs.
Companies with governance controls such as banks, insurance companies, and public utilities often must weigh the risk of engaging in projects while budgeting for government mandated changes.
A simple technique for risk management is Brainstorming, where a team is facilitated by a leader encouraging the flow of ideas without limitations. The team would agree to reject suggestions at a later session. Business and technical team members with diverse backgrounds benefit and the "crazy" ideas may lead to an agreeable cost savings solution.
There are other risk management techniques such as Monte Carlo, Delphi Method, and Probability Method and so on.
We identify risks in our own life and select the solutions to minimize the risk, oftentimes with the least cost. An example is the use of public transportation to commute to work. Many times using public transportation is less expensive than driving a car, with a much lower incidence of accidents contributing to lower medical costs.
Every project has an element of chance. The identification of the prioritized possible risks and investigated solutions increases the likelihood of a successful project completion.
The uncertainty of possible outcomes can have a dollar value assigned. For example, the installation of a critical building component in a remote call center, such as a working heating and air conditioning system, are possible risks to the opening of a new facility on time.
Possible solutions to the risk are:
1. Identifying an experienced HVAC contractor with prior installation successes
2. Budget contingency for shipping in case the HVAC installation is delayed because of newer transportation logistics
3. Do not build the new facility.
Yes, not doing a project is a risk solution and has its own associated costs.
Companies with governance controls such as banks, insurance companies, and public utilities often must weigh the risk of engaging in projects while budgeting for government mandated changes.
A simple technique for risk management is Brainstorming, where a team is facilitated by a leader encouraging the flow of ideas without limitations. The team would agree to reject suggestions at a later session. Business and technical team members with diverse backgrounds benefit and the "crazy" ideas may lead to an agreeable cost savings solution.
There are other risk management techniques such as Monte Carlo, Delphi Method, and Probability Method and so on.
We identify risks in our own life and select the solutions to minimize the risk, oftentimes with the least cost. An example is the use of public transportation to commute to work. Many times using public transportation is less expensive than driving a car, with a much lower incidence of accidents contributing to lower medical costs.
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