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As your project budgets grow, does the associated risk follow?

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Michael Hoard Founder & CEO| Michael Hoard Consulting Hope Valley, Ri, United States
Is risk directly correlated to a project's budget, e.g. a project with a $50M budget brings greater risk than that with a $5M budget? Or is it more of the inverse? Or proportionate?
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Anish Abraham Privacy Program Manager| University of Washington Auburn, Wa, United States
Dec 04, 2017 9:45 PM
Replying to Vincent Guerard
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I don't think risk should be directly related to project budget. Now a days you should have a clear evaluation of risks associated with a project.
So if the project budget increase, it is because some change where accepted on the project. The increase value of the project should include a new provision for risk if any change in the risk is associated with the change.
Like a change to the project might involve a change in the schedule end date.
I concur with Vincent on this. Risk is not directly related to project budget. There are several factors like scope, schedule, resource, technology etc.
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Vincent Guerard Coach - Trainer - Speaker - Advisor| Freelance Mont-Royal, Quebec, Canada
The old ways many would simply apply a % for contingency and a % for risk budget. No justification was possible simply a rule of thumb.

Unless you have a contract the state x% for risk! I have rarely see that.
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1 reply by Marcio Jose de Andrade
Dec 07, 2017 5:28 PM
Marcio Jose de Andrade
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Totally agree! But despite being an "old way", I still frequently see this kind of approach in some engineering projects. Especially when the budget must be defined just after the Basic Engineering Design.
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Marcio Jose de Andrade General Manager| 1971 Toronto, Ontario, Canada
Dec 07, 2017 9:11 AM
Replying to Vincent Guerard
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The old ways many would simply apply a % for contingency and a % for risk budget. No justification was possible simply a rule of thumb.

Unless you have a contract the state x% for risk! I have rarely see that.
Totally agree! But despite being an "old way", I still frequently see this kind of approach in some engineering projects. Especially when the budget must be defined just after the Basic Engineering Design.
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