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The Institute of Internal Auditors (IIA) just issued “On Risk: A guide to Understanding, Aligning, and Optimizing Risk 2020”. This is the first risk assessment survey conducted by IIA. It is also the first survey which includes responses from board members, the C-suit and the Chief Audit Executive (CAE). This article looks at the results of the survey and its implications. [Read more…]
The four knowledge cornerstones of project risk management are:
Why are these called the four cornerstones? Each cornerstone addresses a primary risk source as shown in Table 1. This article address risk management. The remaining cornerstones will be addressed in separate articles. [Read more…]
There are two categories of project risk:
Known risks comprise:
Unknown risks are the uncertainties and variations that surround every project. For example, an unplanned labour strike at one of your major subcontractor’s. [Read more…]
At the time of this writing, coronavirus is spreading in China and is appearing in other areas of the world. Seasonal flu is also spreading through much of the world. As a comparison, the below graphics provide a snapshot of the current situations. First is the CDC (Centers for Disease Control) graphic with its representative statistics. Alarming? CDC estimates 19 – 26 million flu illnesses; currently, there have been approximately 8,000 flu deaths. Alarming? [Read more…]
Coronavirus seems to be spreading quicker than previous pandemic potential viruses, i.e., H5N1, H7N1, SARS, Ebola, MERS, etc. Could this be the long awaited/anticipated threat realization, or is it becoming a media driven phenomenon? Needless to say, planners should be implementing some assessment analysis regarding the potential for impacting business operations. Here is a brief look back at one of my articles from 2006, entitled, “Pre-Pandemic Planning: Business Continuity Perspectives“, when Bird Flu (H5N1) was the hot topic:
The business community is “not adequately prepared” for a possible avian flu pandemic, says Secretary of Health & Human Services Michael Leavitt. As of July 24, 2006, there have been 231 confirmed cases in humans resulting in 133 deaths (a mortality rate of 57%). The virus has spread to 33 countries through wild migratory birds that have now infected domestic poultry (source World Organization for Animal Health). [Read more…]
In several previous Risk Insights, I discussed the need to view state and local government computer network as part of the national infrastructure. This was needed because of the importance of the networks in providing and supporting basic services. Further, by viewing these networks as part of the national infrastructure they become an important part of the overall federal effort to protect and defend the nation’s computer infrastructure. This issue is so important that another paper is appropriate. This piece extends the prior two pieces. [Read more…]
Studies have shown that most project failures are due to poor management of known risks. The known risks are:
Financial planners would advise you that the key to a successful retirement are four cornerstones:
In William Shakespeare’s “The Tragedy of Hamlet, Prince of Denmark” (usually referred to simply as “Hamlet”), the main character, Hamlet, uses the phrase “undiscovered country” to refer to what lies beyond the grave – the afterlife – and our lack of knowledge of it, and our fear of it. As it is with death, so is it with “Artificial Intelligence”, or “AI”.
Simply put, AI are the sciences involved in having computers gather and evaluate information (data in context) – whether that information is stored, or is gathered in real-time, or combinations thereof – and to make decisions based on that information towards some pre-determined outcome or objective. Each decision made leads to an experience which is archived and added to the information that is stored to help make better decisions in the future. [Read more…]
In September 2019, the Local Government Department of the Australian State of New South Wales (NSW), issued “A New Risk Management And Internal Audit Framework” (1). The Minister of Local Government in a forward to the framework states: “Formal risk management and internal audit is a vital part of the NSW Government’s plan to ensure that councils achieve their strategic objectives in the most efficient effective and economical manner. [Read more…]
Based on my years of experience, the secret to effective Project Risk Management is what I call the four cornerstones: Project Management; Earned Value Management; Risk Management; and Subcontract Management. This paper explains why. [Read more…]
A project with a poor risk management foundation is like a house with a fragile foundation. Eventually it will fail.
Knowledge and skills with the four cornerstones of risk management, dramatically increase the probability of you realizing project manager success. Conversely, a lack of knowledge will likely lead to poor project manager performance. [Read more…]
Just Do It!; “He who hesitates is lost”; and “Strike while the iron is hot” are all expressions used with impunity when a project is about to start as we are encouraged to ‘get on with it’ as nothing can go wrong, go wrong?, wrong!
After all, ‘a journey of a thousand miles begins with a single step‘ and projects have to start sooner or later. But what happens when project planning is incomplete and project participants are caught up in that unfortunate project dilemma of ‘wild enthusiasm’ as they carry on with a sense of urgency while conveniently disregarding risk. [Read more…]
The art of debate has devolved. No longer is it used as a tool of discovery, understanding, reconciliation, and progress. Today, it is a tool used to beat one another into submission –with the wholesale surrender of the beliefs and values held by one party over the other being the goal. [Read more…]
Risk is an event or activity that can go wrong and cause an impact to the project. Risks can have a negative or positive impact to the project. Risks that have a positive impact are called opportunities. If they a negative impact to the project, they are called risks.
Risks and opportunities can be generated by anyone on the project but typically are identified and analyzed at the IPT (Integrated ProductTeam) level. A goal on a project is to try and balance risks and opportunities to mitigate the chance of cost or schedule growth. [Read more…]