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Friday, April 26, 2013

Introduction to the Practice Standard for Project Risk Management

The Project Management Institute (PMI) has a dedicated practice standard for Project Risk Management that is available for all PMI Members to download. The Current PMI Standards can be found by Clicking Here. You can click on the link titled “Practice Standard for Project Risk Management” to download your copy as a member benefit. The file is password protected and you cannot print or share it with anyone and is strictly for personal use.
Coming back to our PMI RMI Exam Preparation perspective, going through the practice standard for Project Risk Management would be a good idea before you actually go for the exam. It is only around a 100 pages in size and not as big as the PMBoK.

About the Practice Standard for Project Risk Management:
• It serves as a guiding role to the use of tools & techniques and processes for Project Risk Management
• Does not explain how a process is to be executed
• Expects your experience to fill-in the gaps

The PMBok Guide gives us information on all Project Management Processes. The Practice Standard gives us principles of specialization in Project Risk Management. In this section we will be covering the Practice Standard for Project Risk Management at a very high level. I repeat, this is a very high level summarization of the RMBoK (As I call it) and I strongly urge you to download and browse through it before you sit for the PMI RMP Examination.

Critical Project Success Factors:
According to the practice standard, there are 6 key/critical success factors that could affect the success of our project and its risk management activities. They are:
1. Recognition of the value of Risk Management – As project managers it is our responsibility to explain the importance of risk management to everyone (in our project) and make them realize that risk management activities are not an overhead but can have great benefits on the overall success of the project.
2. Individual commitment – Unless we explain the importance of risk management to all our stakeholders, we will not get their commitment/support which may hinder the risk management activities. As I have said before, risk management is a collective effort and requires the participation from all involved parties.
3. Communication that is open and honest – every project has multiple stakeholders and each of those people could have a different agenda. So, unless we keep the project communications open & honest they wouldn’t have a clear picture of the projects status and this could result in problems in the future.
4. Organizational commitment – A lot of organizations still do not understand the value of risk management activities and hence making them realize the benefits of implementing risk management processes will help us gain their commitment which could go a long way in successful risk management in our project
5. Risk effort tailored to the project – Every project is different. What would be a good idea for one project could be a disaster for another. So, all our risk management effort must be in accordance to the size, complexity and needs of the project.
6. Integration with project management – Risk Management efforts in our project must be closely integrated with the overall project management effort.
Before we elaborate on these key points, think this way – You could be an amazing risk analyst and could identify all risks that could affect your project within hours. You also have access to the most amazing tools that can aid in risk management. So, does this mean that your risk management effort on the project will be a success?

Did you say “Yes”, if so, you are greatly mistaken. Unfortunately, if you do not communicate effectively with the project stakeholders, then your project risk management effort will not succeed. In fact, if you do not take up any of the above mentioned 6 factors properly, there is a high probability that your effort in project risk management may end up a failure.

Prev: Section Summary - Monitor & Control Risks

Next: Risk Management Foundation

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