Why and What is Risk Management?

This chapter provides definition about risk and uncertainty. The practice of risk management can certainly play an important role in ensuring that the outcomes will be positive ones. However, a lack of risk management will likely result in increases to a project's cost and schedule. To quote from the Project Management Body of Knowledge (PMBOK) Guide, “Risk Management includes the processes concerned with conducting risk management planning, identification, analysis, responses, and monitoring and control on a project. The objectives of the project risk management are to increase the probability and impact of positive events and decrease the probability and impact of negative events in the project. The chapter discusses some limitations of the risk management. It provides project managers, design professionals, estimators, schedulers, and contractors a systematic approach to manage the project risk, specifically as they relate to cost and schedule.