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A fresh look at risk management

August 29, 2011

One in six major IT projects exceed anticipated costs by an average of 200%, according to research conducted by Oxford University and McKinsey.

Not surprisingly, this calls into question the quality of risk analysis and management, especially in the IT sector. It also suggests that the much-publicized failures in Government and public sector – and the associated implications of specific public sector incompetence – may be rather unfair. The report suggests that many businesses suffer similar overruns,  but are much more likely to keep them private.

It is in this context that ‘Risk Management Failures’, a blog by Sonia Jaspal, is worth reading. In it, she summarizes and comments on a recent paper highlighting risk management good practice – but also pointing out some of the weaknesses. In particular, there is the problem that risk managers are often (rightly) seen as too negative, or ready to highlight problems while leaving others to think up solutions. Risk management can also be far too siloed, with a failure to see the interconnections between risks. Also, maintianing oversight and updating the risks during the life-cycle of a project often seems to be overlooked.

I recommend that anyone involved in project contracting should review Sonia’s summary and consider its applicability in the context of their own organization. See http://soniajaspal.wordpress.com/2011/08/24/risk-management-failures/#comment-3665

One Comment
  1. Thanks for the recommending the article and my blog.

    Kind regards,

    Sonia

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