Managing Risk in IT Projects

Essay by wesdentonUniversity, Bachelor'sA-, January 2008

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A risk, in IT project management is a factor where the outcome is unknown. From a non IT perspective, an example would be that buying gold in a volatile market is risky because we do not know whether the price will go up or down, therefore we are taking a risk. Sometimes risk taking can be addictive for people because of that unknown outcome and the excitement of the unexpected. However, in IT project management, a successful outcome hinges on the project manager having the experience and resources to properly manage risks. It does not make financial sense for an organization to take risks where the outcome is unexpected. "Risks are typically unforeseen events, which can cause adverse impact to any project. Risks can happen to any one of the major parameters of a project namely it schedule, scope, resources and quality." (1)Risks in IT project management can and should be managed in a meaningful way because the outcome of the risk is going to occur whether it is planned for or not.

It is better to be prepared to take a risk rather than going into the decision blindly without knowing the consequences of the action. It is important that project teams be aware that managing risk starts with good planning and communication. "Risks are inherent to any project. Furthermore, risk taking is essential to progress, and failure is often a key part of learning." (2) The team leader should have a proactive leadership style with the experience to recognize a risk and take action to manage that risk. Open communication of the objectives and risks with the team and stakeholders is necessary for project success. "Point number one convince your team that risk management begins with proper project planning. Leave as little as possible to chance." (3)It is...