The Mystery of Project Risks

Managing risks is always a tricky job for project managers. While experts and consultants advise you to follow formal methodology like the well established body of knowledge in PMBOK 2004 by Project Management Institute, many managers choose to apply their own common sense and intuitive approach. A researcher at HKUST interviewed 25 experienced project managers in Hong Kong working on local and multinational IT projects. None of them use formal risk management method in their projects. Instead they use their own pragmatic model.

Before you argue that this may be the exact reason why many business or IT projects in Hong Kong have problems, let’s not forget that these 25 managers were all well versed in PMBOK, recognized by their peers, and had trained or worked abroad with wide cultural exposure. Is there a gap between theoretical framework and situations faced by project managers in real life? Is the cost of applying formal risk management methodologies too high that overall benefits gained do not justify their use? Or are some techniques of risk management such as quantification of probability of risk events not practical in the real world?

Such is the mystery of project risks, or more accurately, project risk management. The million-dollar question is what model would be most cost-effective for business and IT projects in Hong Kong, which are well known for their rigid deadlines and limited resources.

I'll continue to explore this topics in this blog. Stay tuned!

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