We ended the Project Management course with the topic of risk management. Risk can be defined as the chance of an adverse event or the combination of the probability of a defined hazard and the magnitude of the consequences of the occurrence. Management is about balancing the cost (money, time, effort) of risk in order to reduce them to an acceptable level.
Risk assessment is based on the objective consideration of its likelihood, consequences and detectability. We then looked at the visual representation of risk with a ‘chance of occurrence’ vs ‘magnitude of risk’ graph. In engineering, the risk factors include technical failure, programme failure and economic failure.
The Boehm’s model of risk management is divided into risk assessment and risk control. Risk assessment includes risk identification, analysis and prioritisation while risk control includes risk management planning, resolution and monitoring. In practice, the job of the program manager is to allocate resources to achieve goals with minimum risk. It includes anticipating problems, quantifying problem risk, deciding which are real problems, planning counters to problems, design trigger indicators, etc.
Moving on, failure can be defined as a consequence of not meeting a customer requirement. Failure mode and effects analysis are used in system design, product development, project plan, process design/development, manufacturing process, personal management plans/action and change management. The probability of occurrence of the failure is dependent on the type of failure and thus robustness of the design in which it occurs.