November 5, 2020, 8:30 a.m. to 6 p.m. EDT | November 6, 2020 – February 7, 2021, On-Demand | Online Conference
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It is obvious. Everything that is an activity inside a project add cost. It is not a question to be performed from somebody that could argue is a professional in her/his field.
Like any other value added service, such as project management, construction management and independent engineering consultants, it can increase soft cost on a project. But these services have a proven net benefit to controlling hard cost and schedule commitments on a project. Risk management is a service with the distinct process objectives for avoiding unplanned costs and schedule impacts by mitigating threats from project events and for implementing reductions to planned costs and schedule durations by undertaking opportunities for improving project execution. Only the most unusual of clients would ever ignore these value added services and risk a loss in funding or a project project failure.
Task: Purchase 50 HP 800078-S01 PROLIANT DL380 G9 servers (total cost = $400,000 USD)
Risk: The servers might not meet the needs of all internal customers in our specialized environment, and customers will not be able to perform their critical tasks.
Risk Mitigation Strategy: Purchase 2 servers, add them to our environment, and let customers perform intensive tests on them for two weeks. If customers verify the servers will meet their needs, purchase the remaining 48 servers.
Risk Cost: $16,000 USD, and the creation of a new ‘Server Testing’ task with a 2 week duration.
Possible Cost Without Risk Management: $400,0000 USD wasted on servers that don’t meet customers’ needs, widespread delays across the organization as a result of customers not being able to perform their work (resulting in millions of dollars in lost labor and opportunities), an estimated 6 additional weeks needed to find servers that will meet customers’ needs, a 25% surcharge added to cost of new servers to cover expedited processing and shipping, very irate customers.
I then ask risk management opponents if, should they choose not to implement risk management, they are willing to assume personal responsibility for the possible costs should the risk occur. No one has ever said 'Yes'.
I've been told that risk management adds both cost and time, but not as an argument to not follow risk management practices.
As has been stated in other answers, risk management does add cost, because your time has value, but if all it does is add cost then someone is doing something wrong.
Not only should risk management help you prevent unplanned cost, it can also help you identify opportunities (positive risk) to reduce cost.
I have got some funny one, like "they hired me, there no more risk!". That is more a question of education on what risk management is all about.
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