An integrated risk management process that leads to a successful project

Abstract

Within projects, there are a lot of elements that change. Change leads to uncertainty, and as a result, risks appear. A lot of projects fail due to uncertainty and risks. Especially complex projects are more vulnerable to risks (Hertogh & Westerveld, 2010). Complex projects are seen as large projects with long time schedules, multi-ownership, involving substantial resources, significant political issues and significant novelty (Chapman & Ward, 1997). The root causes of project related risks are mostly part of the organizational dynamics and multidisciplinary nature of the business´ organization (Thamhain, 2013). For this reason, risk management becomes important, which is especially crucial in technology-based projects. Risk management must be seen as an ongoing review process in the whole Project Life Cycle (Thamhain, 2013). Chapman and Ward (1997) stated already in 1997 that risk management must be a core process within the strategic management of any business or organization. No matter the size, the activity, or the sector.
Risk management has the aim to reduce risks (Nicholas & Steyn, 2012). Widely, a lot of research is performed to risk management standards. These standards give hands on managing risks and are mostly described in an abstract way as it must be applicable to all projects. The general risk management standards that are defined in literature are implemented in all mature risk management organizations in extreme complex projects to manage risks (Caño & Cruz, 2002). Risk management is a process that should be integrated within project management (Nicholas & Steyn, 2012; Zou, Chen, & Chan, 2010). It is widely recognized by leading project management institutions that risk management should be an integral part of the project management (Caño & Cruz, 2002). While making risk management an integral part of project management, it is necessary that risk management must be adopted by the project management approach. Risk management is not just a management tool that can be added besides the project management but it must be part of the project management (Chapman and Ward, 1997).