Project Risk Management

This chapter provides an overview of the project risk management (PRM) process and examples of how various tools are used. A project life cycle is traditionally divided into four phases. The chapter shows the relationship of these phases. These are the following: initiation, planning, execution, and closeout. Risk management is performed in all phases of a project life cycle. The key points of PRM are listed in the following: development of a PRM team; risk planning; risk assessment; risk identification; assignment of risk owner; assignment of probabilities and consequences; assignment of risk triggers; risk register; risk handling; risk monitoring; risk management plan; and risk communications. Numerous tools exist to analyze the adequacy of the contingency valuation that has resulted from the qualitative and/or quantitative analysis of the risks. Various cost estimating guidance documents have been compiled by industry and are available in texts and journals and are updated on a regular basis.