MONTHLY COLUMN:

ADVANCES IN PROJECT MANAGEMENT

Strategic Project Risk Appraisal and Management

By Elaine Harris

Leicester Business School
De. Montfort University
UK

Editor’s note:  This series on Advances in Project Management was launched with a Guest Editorial by Professor Darren Dalcher and first article in the December 2009 edition of PM World Today.  Please read that introductory editorial here, where Professor Dalcher explains and sets the stage for articles in this exciting series by leading authors in the field of project management.  Please read previous articles in the series by visiting the archives, beginning with the December 2009 edition.  Each month’s article is introduced by Professor Darren Dalcher, editor of the Series on Advances in Project Management.  To read Professor Dalcher’s introduction to this month’s article, click here.

Strategic decisions to select which projects an organisation should invest in are taken without certain knowledge of what the future will hold and how successful the project will be. Faced with this uncertainty, we can only attempt to predict the factors that can impact on a project. Once we can identify these factors and their possible impacts we can call them risks and attempt to analyse and respond to them. Risks can be both positive, such as embedded opportunities, perhaps to do more business with a new client or customer in future, or negative, things that can go wrong, and those indeed require more focus in most risk management processes. Project risk assessment should therefore begin well before the organisation makes its decision about whether to undertake a project, or if faced with several options, which alternative to choose.

One common weakness in the approach that organisations take to project risk management is the failure to identify the sources of project risk early enough, before the organisation commits resources to the project (appraisal stage). Another is not to share that risk assessment information with project managers so that they can develop suitable risk management strategies. Through action research in a large European logistics company, a new project risk assessment technique (Pragmatix®) has been developed to overcome these problems. It provides an alternative method for risk identification, ongoing risk management, project review and learning. This technique has been applied to seven of the most common types of projects that organisations experience (from business development, acquisitions and new product developments to IT, new site or relocation, compliance and events management). This article features three of these seven types to give a flavour of the research findings.

To read entire paper Click Here

About the Author Prof. Elaine Harris Author Elaine Harris is Professor and Head of Department of Accounting and Finance and Head of Leicester Business School’s Graduate Centre at De. Montfort University, where she teaches project management.  She is the author of Strategic Project Risk Appraisal and Management published by Gower Publishing, part of the Advances in Project Management series edited by Professor Darren Dalcher.  Strategic Project Risk Appraisal and Management, by Elaine Harris, Advances in Project Management series, Gower 2009, ISBN: 978-0-566-08848-3. To see the book, visit Gower website.