Learning Objectives

• Understand the importance of identifying risks during the planning phases of the project.
• Select strategies for responding to risk according to A Guide to the Project Management Body of Knowledge (PMBOK^® Guide) recommendations of avoid, transfer, mitigate and accept (for negative risks); and exploit, share, enhance and accept (for positive risks).
• See how project changes affect the potential for risks, highlighting the importance of the monitoring and controlling process.

When and how should a project manager address risk? The short answer is all the time and in every conceivable way. This presentation takes a more extensive look at the question and provides multiple answers. Project managers can and should address risk management in coordination with all other project management processes. They must also be proactive in handling risk, as opposed to being reactive which may be more costly in terms of time and money.

Too often project managers avoid risk management by thinking that it is too difficult and/or too unfamiliar to them. This is negligent, dangerous and erroneous thinking. Project managers need to realize that risk management is easy, straightforward and necessary. If you already follow PMI's methodology, risk management is simply an extension of all other project management activities (time, cost and scope management, etc.). While all the processes are closely integrated, risk management is perhaps the most closely integrated to all other processes. Remember this concept as you begin to understand how risk relates to everything else you do in project management.