Risk Management in PMBOK
Project Management
Project Integration Project Scope Project Time
Management Management Management
Framework Core Core
Project Cost Project Quality Project Human
Management Management Resources Manag.
Core Core Support
Project Comm. Project Risk Project Procurement
Management Management Man.
Support Support Support
I -1
Integrating Risk into Project Management
I -2
Typical functional distribution
1. Integration 2. Scope 3. Quality
Risk Events Risk Events Risk Events
•Incorrect start of integrated •Changes in scope to meet •Performance failure, or
PM relative to project life cycle project objectives, e.g., environmental impact
regulatory changes
Risk Conditions Risk Conditions Risk Conditions
•Inadequate planning, integra- •Inadequacy of planning. cr. •Poor attitude to quality
tion or resource allocation planning lead time Poor •Substandard
(Anything which reduces the definition of scope breakdown, design/materials/ workmanship
probability of properly deter- or work packages •Inadequate quality assurance
mining project objectives, i.e.., •Inconsistent, incomplete or program
anything which directly or unclear definition of quality
indirectly reduces the requirements Inadequate
probability of project success.) scope control during
•Inadequate, or lack of post- implementation
project review
I -3
Continued..
4. Time 5. Cost 6. Risk
Risk Events Risk Events Risk Events
•Specific delays, e.g.., strikes, •Impacts of accidents, fire, •The risk of overlooking a risk
labor or material availability, theft •Changes in the work
extreme weather, rejection of •Unpredictable price changes necessary to achieve the
Work e.g.., due to supply shortages Scope
Risk Conditions Risk Conditions Risk Conditions
•Errors in estimating time or •Estimating errors, including •Ignoring risk or `assuming it
resource availability estimating uncertainty Lack of away`
•Poor allocation and investigation of predictable •Inappropriate or unclear
management of float problems Inadequate assignment of responsibility /
•Scope of work changes productivity, cost, change or risk to employees/contractors
without due allowance for time contingency control Poor insurance management
extensions / acceleration •Poor maintenance, security, •Inappropriate or unclear
•Early release of competitive purchasing, etc.. contractual assignment of risk
Product
I -4
Continued..
7. procurement 8. Human Res. 9. Communication
Risk Events Risk Events Risk Events
•Contractor insolvency •Strikes, terminations, •Inaction or wrong action due
•Claims settlement or litigation organizational breakdown to incorrect information or
communication failure
Risk Conditions Risk Conditions Risk Conditions
•Unenforceable •Conflict not managed •Carelessness in planning or
conditions/clauses •Poor organization, definition in communicating
•Incompetent or financially or allocation of responsibility, •Improper handling of
unsound workers / contractors or otherwise absence of complexity
Adversarial relations motivation Poor use of •Lad* of adequate consultation
Inappropriate or unclear accountability Absence of with project's publics-(internal /
contractual assignment of risk leadership, or vacillating external)
management style
Consequences of ignoring or
avoiding risk
I -5
Typical Risk on construction project
• Failure to complete within the stipulated design and construction time.
• Failure to obtain the expected outline planning, detailed planning or building
code/ regulation approvals within the time allowed in the design program.
• Unforeseen adverse ground conditions delaying the project.
• Exceptionally inclement weather delaying the project.
• Strike by the labor force.
• Unexpected price rises for labor and materials.
• Failure to let to a tenant upon completion
• An accident to an operative on site causing physical injury.
• Latent defects occurring in the structure through poor workmanship.
• Force majeur (flood, earthquake, etc.)
• A claim from the contractor for loss and expense caused by the late
production of design details by design team
• Failure to complete the project within the client budgets allowance.
I -6