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Risk - The Complete Tool Set
Business Risk
During the risk management process, the project manager and team would also undertake a Business Risk analysis. Bob Charette and others provide a comprehensive approach to the evaluation, impact and probability analysis of risk impact. However, for most projects, it would be sufficient to document the impact on the organisation (and the team) of the failure of the project.
Typically, in projects, the following classes of Business Risk impact can be identified:
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the investment in the project is lost and benefits are not accrued; |
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the organisation's strategic plan is compromised; |
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key technology platforms are compromised; |
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the organisation is exposed to legal procedures including litigation and prosecution; |
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the organisation is in violation of government requirements; |
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the organisation is exposed to fraud and security violations; and |
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the organisation faces loss of public image or reputation. |
Again, remembering Figure 3, the higher the risk of the project (as revealed by the Project Risk assessment process) the higher the probability that the project will fail and the organisation will be exposed to the risk impact.
Fig. 3 - Different but related risks
As in risk control, the key is for the team to undertake the impact analysis and ensure that the relevant senior management are aware of the impact and are prepared to invest in strategies to increase the probability of project success.