What Are the Benefits of Project Risk Management?

The are several important benefits of Project Risk Management such as:

  • Anticipating risks/uncertainties in the project execution phase by accounting for them in the project plan
  • Creating realistic cost and schedule estimates, leading to an increased confidence in the Project Manager by the different stakeholders
  • Responding calmly and rationally to project risks as they occur
  • Adding a touch of professionalism to the Project Management culture in the company, positively affecting the image of the Project Manager
  • Minimizing the possibility and/or impact of scope creeps
  • Managing stakeholders’ expectations since the Project Manager is able to accurately assess their requirements and the real impact those requirements may have on the project
  • Documenting risks and their associated responses to be used as a reference in future projects. This will improve the reliability of Project Management with every project the company executes.

The most important benefit is, of course, managing a project that is more likely to succeed.

It should be noted that there’s a cost of the above benefits: Project Risk Management creates a considerable overhead on the project (especially during Project Planning). To be able to perceive its real value, one should compare it to any kind of insurance: it has high costs, and many never be used, but it adds confidence, and once needed, it does make all the difference.

© 2009 Project Management Learning – Reproduction of this material is strictly prohibited without the written consent of Project Management Learning.

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