Risk management is the identification, evaluation, and prioritization of risks , followed by the minimization, monitoring, and control of the impact or probability of those risks occurring.
91-824: Acat or ACAT may refer to: Military [ edit ] "Avoid, Control, Accept, or Transfer", a catchphrase used in Risk Management as taught in the US Department of Defense Acquisition Category, a term from the US Department of Defense Instruction 5000.02 - Operation of the Defense Acquisition System; see Glossary of military modeling and simulation Science [ edit ] Acetyl-coenzyme A acetyltransferase , an enzyme Acyl-CoA:cholesterol acyltransferase , an intracellular protein involved in cholesterol metabolism ACAT1 mRNA ,
182-706: A professional role , a risk manager will "oversee the organization's comprehensive insurance and risk management program, assessing and identifying risks that could impede the reputation, safety, security, or financial success of the organization", and then develop plans to minimize and / or mitigate any negative (financial) outcomes. Risk Analysts support the technical side of the organization's risk management approach: once risk data has been compiled and evaluated, analysts share their findings with their managers, who use those insights to decide among possible solutions. See also Chief Risk Officer , internal audit , and Financial risk management § Corporate finance . Risk
273-590: A property or business to avoid legal liability is one such example. Avoiding airplane flights for fear of hijacking . Avoidance may seem like the answer to all risks, but avoiding risks also means losing out on the potential gain that accepting (retaining) the risk may have allowed. Not entering a business to avoid the risk of loss also avoids the possibility of earning profits. Increasing risk regulation in hospitals has led to avoidance of treating higher risk conditions, in favor of patients presenting with lower risk. Risk reduction or "optimization" involves reducing
364-413: A "transfer of risk." However, technically speaking, the buyer of the contract generally retains legal responsibility for the losses "transferred", meaning that insurance may be described more accurately as a post-event compensatory mechanism. For example, a personal injuries insurance policy does not transfer the risk of a car accident to the insurance company. The risk still lies with the policyholder namely
455-416: A balance between negative risk and the benefit of the operation or activity; and between risk reduction and effort applied. By effectively applying Health, Safety and Environment (HSE) management standards, organizations can achieve tolerable levels of residual risk . Modern software development methodologies reduce risk by developing and delivering software incrementally. Early methodologies suffered from
546-517: A company may outsource only its software development, the manufacturing of hard goods, or customer support needs to another company, while handling the business management itself. This way, the company can concentrate more on business development without having to worry as much about the manufacturing process, managing the development team, or finding a physical location for a center. Also, implanting controls can also be an option in reducing risk. Controls that either detect causes of unwanted events prior to
637-421: A few. Beyond executing the change in the field, the change normally needs to be documented to show what was actually constructed. This is referred to as change management. Hence, the owner usually requires a final record to show all changes or, more specifically, any change that modifies the tangible portions of the finished work. The record is made on the contract documents – usually, but not necessarily limited to,
728-484: A higher probability but lower loss, versus a risk with higher loss but lower probability. Opportunity cost represents a unique challenge for risk managers. It can be difficult to determine when to put resources toward risk management and when to use those resources elsewhere. Again, ideal risk management optimises resource usage (spending, manpower etc), and also minimizes the negative effects of risks. Opportunities first appear in academic research or management books in
819-459: A messenger RNA molecule Other uses [ edit ] Acat (deity) , a Mayan god of tattooing International A-class catamaran ("A-Cat"), a type of sailing craft Alberta Council on Admissions and Transfer , an educational organization Automated Customer Account Transfer Service , a financial securities transfer system Assistive context-aware toolkit , the open-source input method used by Stephen Hawking . Topics referred to by
910-426: A project to requirements might be agreeing to deliver a computer system that will process staff data and manage payroll, holiday, and staff personnel records in shorter times with reduced errors. Under BRM, the agreement might be to achieve a specified reduction in staff hours and errors required to process and maintain staff data after the system installation when compared without the system. Critical path method (CPM)
1001-417: A project. With the correct documentation, a project's success can be tracked and observed as the project goes on. If performed correctly documentation can be the backbone of a project's success Monitoring and controlling consist of those processes performed to observe project execution so that potential problems can be identified in a timely manner and corrective action can be taken, when necessary, to control
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#17327721355311092-417: A schedule for control implementation and responsible persons for those actions. There are four basic steps of risk management plan, which are threat assessment, vulnerability assessment, impact assessment and risk mitigation strategy development. According to ISO/IEC 27001 , the stage immediately after completion of the risk assessment phase consists of preparing a Risk Treatment Plan, which should document
1183-459: A significant exploratory element (e.g., research and development ), these stages may be supplemented with decision points (go/no go decisions) at which the project's continuation is debated and decided. An example is the Phase–gate model . Project management relies on a wide variety of meetings to coordinate actions. For instance, there is the kick-off meeting, which broadly involves stakeholders at
1274-430: A very different discipline. For example, project managers have a key role in improving the translation even when they do not speak the language of the translation, because they know the study objectives well to make informed decisions. Similarly, research study management can also apply a project manage approach. There is public project management that covers all public works by the government, which can be carried out by
1365-477: Is ISO Guide 31073:2022 , "Risk management — Vocabulary". Ideally in risk management, a prioritization process is followed. Whereby the risks with the greatest loss (or impact) and the greatest probability of occurring are handled first. Risks with lower probability of occurrence and lower loss are handled in descending order. In practice the process of assessing overall risk can be tricky, and organisation has to balance resources used to mitigate between risks with
1456-422: Is PRINCE2 . Traditionally (depending on what project management methodology is being used), project management includes a number of elements: four to five project management process groups, and a control system. Regardless of the methodology or terminology used, the same basic project management processes or stages of development will be used. Major process groups generally include: In project environments with
1547-427: Is a viable strategy for small risks where the cost of insuring against the risk would be greater over time than the total losses sustained. All risks that are not avoided or transferred are retained by default. This includes risks that are so large or catastrophic that either they cannot be insured against or the premiums would be infeasible. War is an example since most property and risks are not insured against war, so
1638-402: Is an algorithm for determining the schedule for project activities. It is the traditional process used for predictive-based project planning. The CPM method evaluates the sequence of activities, the work effort required, the inter-dependencies, and the resulting float time per line sequence to determine the required project duration. Thus, by definition, the critical path is the pathway of tasks on
1729-401: Is an extension to the theory and practice of EVM. In critical studies of project management, it has been noted that phased approaches are not well suited for projects which are large-scale and multi-company, with undefined, ambiguous, or fast-changing requirements, or those with high degrees of risk, dependency, and fast-changing technologies. The cone of uncertainty explains some of this as
1820-523: Is based on a project as a production system view, in which a project transforms inputs (raw materials, information, labor, plant & machinery) into outputs (goods and services). Product-based planning is a structured approach to project management, based on identifying all of the products (project deliverables ) that contribute to achieving the project objectives. As such, it defines a successful project as output-oriented rather than activity- or task-oriented. The most common implementation of this approach
1911-511: Is defined as the possibility that an event will occur that adversely affects the achievement of an objective. Uncertainty, therefore, is a key aspect of risk. Risk management appears in scientific and management literature since the 1920s. It became a formal science in the 1950s, when articles and books with "risk management" in the title also appear in library searches. Most of research was initially related to finance and insurance. One popular standard clarifying vocabulary used in risk management
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#17327721355312002-451: Is determining the rate of occurrence since statistical information is not available on all kinds of past incidents and is particularly scanty in the case of catastrophic events, simply because of their infrequency. Furthermore, evaluating the severity of the consequences (impact) is often quite difficult for intangible assets. Asset valuation is another question that needs to be addressed. Thus, best educated opinions and available statistics are
2093-805: Is different from Wikidata All article disambiguation pages All disambiguation pages Risk management#Potential risk treatments Risks can come from various sources (i.e, threats ) including uncertainty in international markets , political instability , dangers of project failures (at any phase in design, development, production, or sustaining of life-cycles), legal liabilities , credit risk , accidents , natural causes and disasters , deliberate attack from an adversary, or events of uncertain or unpredictable root-cause . There are two types of events wiz. Risks and Opportunities. Negative events can be classified as risks while positive events are classified as opportunities. Risk management standards have been developed by various institutions, including
2184-414: Is easy to see whether or not a project's requirement has been met. To go along with that, documentation provides information regarding what has already been completed for that project. Documentation throughout a project provides a paper trail for anyone who needs to go back and reference the work in the past. In most cases, documentation is the most successful way to monitor and control the specific phases of
2275-470: Is famous for his use of the Gantt chart as a project management tool (alternatively Harmonogram first proposed by Karol Adamiecki ); and Henri Fayol for his creation of the five management functions that form the foundation of the body of knowledge associated with project and program management. Both Gantt and Fayol were students of Frederick Winslow Taylor 's theories of scientific management . His work
2366-426: Is happening to keep a project on track. This can help to reduce the risk of a completed project being a failure by delivering agreed upon requirements (outputs) i.e. project success but failing to deliver the benefits (outcomes) of those requirements i.e. product success. Note that good requirements management will ensure these benefits are captured as requirements of the project and their achievement monitored throughout
2457-531: Is known, the events that a source may trigger or the events that can lead to a problem can be investigated. For example: stakeholders withdrawing during a project may endanger funding of the project; confidential information may be stolen by employees even within a closed network; lightning striking an aircraft during takeoff may make all people on board immediate casualties. The chosen method of identifying risks may depend on culture, industry practice and compliance. The identification methods are formed by templates or
2548-414: Is often used in place of risk-sharing in the mistaken belief that you can transfer a risk to a third party through insurance or outsourcing. In practice, if the insurance company or contractor go bankrupt or end up in court, the original risk is likely to still revert to the first party. As such, in the terminology of practitioners and scholars alike, the purchase of an insurance contract is often described as
2639-521: Is referred to as IT project management and which specializes in the delivery of technical assets and services that are required to pass through various lifecycle phases such as planning, design, development, testing, and deployment. Biotechnology project management focuses on the intricacies of biotechnology research and development. Localization project management includes application of many standard project management practices to translation works even though many consider this type of management to be
2730-479: Is the forerunner to modern project management tools including work breakdown structure (WBS) and resource allocation . The 1950s marked the beginning of the modern project management era, where core engineering fields came together to work as one. Project management became recognized as a distinct discipline arising from the management discipline with the engineering model. In the United States, prior to
2821-448: Is the process of supervising the work of a team to achieve all project goals within the given constraints. This information is usually described in project documentation , created at the beginning of the development process. The primary constraints are scope , time and budget . The secondary challenge is to optimize the allocation of necessary inputs and apply them to meet predefined objectives. The objective of project management
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2912-483: Is therefore difficult or impossible to predict. A common error in risk assessment and management is to underestimate the wildness of risk, assuming risk to be mild when in fact it is wild, which must be avoided if risk assessment and management are to be valid and reliable, according to Mandelbrot. According to the standard ISO 31000 , "Risk management – Guidelines", the process of risk management consists of several steps as follows: This involves: After establishing
3003-525: Is to increase the flow of projects in an organization ( throughput ). Applying the first three of the five focusing steps of TOC, the system constraint for all projects, as well as the resources, are identified. To exploit the constraint, tasks on the critical chain are given priority over all other activities. Earned value management (EVM) extends project management with techniques to improve project monitoring. It illustrates project progress towards completion in terms of work and value (cost). Earned Schedule
3094-508: Is to produce a complete project which complies with the client's objectives. In many cases, the objective of project management is also to shape or reform the client's brief to feasibly address the client's objectives. Once the client's objectives are established, they should influence all decisions made by other people involved in the project– for example, project managers, designers, contractors and subcontractors. Ill-defined or too tightly prescribed project management objectives are detrimental to
3185-695: The Project Management Institute , the National Institute of Standards and Technology , actuarial societies, and International Organization for Standardization . Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management , security , engineering , industrial processes , financial portfolios , actuarial assessments , or public health and safety . Certain risk management standards have been criticized for having no measurable improvement on risk, whereas
3276-426: The management of such distinct production approaches requires the development of distinct technical skills and management strategies. Until 1900, civil engineering projects were generally managed by creative architects, engineers, and master builders themselves, for example, Vitruvius (first century BC), Christopher Wren (1632–1723), Thomas Telford (1757–1834), and Isambard Kingdom Brunel (1806–1859). In
3367-415: The methodology employed, careful consideration must be given to the overall project objectives, timeline, and cost, as well as the roles and responsibilities of all participants and stakeholders . Benefits realization management (BRM) enhances normal project management techniques through a focus on outcomes (benefits) of a project rather than products or outputs and then measuring the degree to which that
3458-408: The 1950s, organizations started to apply project-management tools and techniques more systematically to complex engineering projects. As a discipline, project management developed from several fields of application including civil construction, engineering, and heavy defense activity. Two forefathers of project management are Henry Gantt , called the father of planning and control techniques, who
3549-413: The 1950s, projects were managed on an ad-hoc basis, using mostly Gantt charts and informal techniques and tools. At that time, two mathematical project-scheduling models were developed. The critical path method (CPM) was developed as a joint venture between DuPont Corporation and Remington Rand Corporation for managing plant maintenance projects. The program evaluation and review technique (PERT),
3640-1048: The 1990s. The first PMBoK Project Management Body of Knowledge draft of 1987 doesn't mention opportunities at all. Modern project management school recognize the importance of opportunities. Opportunities have been included in project management literature since the 1990s, e.g. in PMBoK, and became a significant part of project risk management in the years 2000s, when articles titled "opportunity management" also begin to appear in library searches. Opportunity management thus became an important part of risk management. Modern risk management theory deals with any type of external events, positive and negative. Positive risks are called opportunities . Similarly to risks, opportunities have specific mitigation strategies: exploit, share, enhance, ignore. In practice, risks are considered "usually negative". Risk-related research and practice focus significantly more on threats than on opportunities. This can lead to negative phenomena such as target fixation . For
3731-531: The Iron Triangle or Triple Constraint in order for projects to be considered a success or failure. For each type of project management, project managers develop and utilize repeatable templates that are specific to the industry they're dealing with. This allows project plans to become very thorough and highly repeatable, with the specific intent to increase quality, lower delivery costs, and lower time to deliver project results. A 2017 study suggested that
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3822-483: The acceptance technique, the business intentionally assumes risks without financial protections in the hopes that possible gains will exceed prospective losses. The transfer approach shields the business from losses by shifting risks to a third party, frequently in exchange for a fee, while the third-party benefits from the project. By choosing not to participate in high-risk ventures, the avoidance strategy avoids losses but also loses out on possibilities. Last but not least,
3913-502: The appropriate level of management. For instance, a risk concerning the image of the organization should have top management decision behind it whereas IT management would have the authority to decide on computer virus risks. The risk management plan should propose applicable and effective security controls for managing the risks. For example, an observed high risk of computer viruses could be mitigated by acquiring and implementing antivirus software. A good risk management plan should contain
4004-474: The areas surrounding the improved traffic capacity. Over time, traffic thereby increases to fill available capacity. Turnpikes thereby need to be expanded in a seemingly endless cycles. There are many other engineering examples where expanded capacity (to do any function) is soon filled by increased demand. Since expansion comes at a cost, the resulting growth could become unsustainable without forecasting and management. The fundamental difficulty in risk assessment
4095-457: The case of an unlikely event, the probability of occurrence of which is unknown. Therefore, in the assessment process it is critical to make the best educated decisions in order to properly prioritize the implementation of the risk management plan . Even a short-term positive improvement can have long-term negative impacts. Take the "turnpike" example. A highway is widened to allow more traffic. More traffic capacity leads to greater development in
4186-504: The confidence in estimates and decisions seems to increase. Strategies to manage threats (uncertainties with negative consequences) typically include avoiding the threat, reducing the negative effect or probability of the threat, transferring all or part of the threat to another party, and even retaining some or all of the potential or actual consequences of a particular threat. The opposite of these strategies can be used to respond to opportunities (uncertain future states with benefits). As
4277-429: The consequences occurring during use of the product, or detection of the root causes of unwanted failures that the team can then avoid. Controls may focus on management or decision-making processes. All these may help to make better decisions concerning risk. Briefly defined as "sharing with another party the burden of loss or the benefit of gain, from a risk, and the measures to reduce a risk." The term 'risk transfer'
4368-451: The context, the next step in the process of managing risk is to identify potential risks. Risks are about events that, when triggered, cause problems or benefits. Hence, risk identification can start with the source of problems and those of competitors (benefit), or with the problem's consequences. Some examples of risk sources are: stakeholders of a project, employees of a company or the weather over an airport. When either source or problem
4459-460: The customers of the enterprise, as well as external impacts on society, markets, or the environment. There are various defined frameworks here, where every probable risk can have a pre-formulated plan to deal with its possible consequences (to ensure contingency if the risk becomes a liability ). Managers thus analyze and monitor both the internal and external environment facing the enterprise, addressing business risk generally, and any impact on
4550-549: The decisionmaking process. A project is a temporary and unique endeavor designed to produce a product, service or result with a defined beginning and end (usually time-constrained, often constrained by funding or staffing) undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value. The temporary nature of projects stands in contrast with business as usual (or operations) , which are repetitive, permanent or semi-permanent functional activities to produce products or services. In practice,
4641-435: The decisions about how each of the identified risks should be handled. Mitigation of risks often means selection of security controls , which should be documented in a Statement of Applicability, which identifies which particular control objectives and controls from the standard have been selected, and why. Implementation follows all of the planned methods for mitigating the effect of the risks. Purchase insurance policies for
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#17327721355314732-405: The design drawings. The end product of this effort is what the industry terms as-built drawings, or more simply, "as built." The requirement for providing them is a norm in construction contracts. Construction document management is a highly important task undertaken with the aid of an online or desktop software system or maintained through physical documentation. The increasing legality pertaining to
4823-434: The development of templates for identifying source, problem or event. Common risk identification methods are: Once risks have been identified, they must then be assessed as to their potential severity of impact (generally a negative impact, such as damage or loss) and to the probability of occurrence. These quantities can be either simple to measure, in the case of the value of a lost building, or impossible to know for sure in
4914-408: The enterprise achieving its strategic goals . ERM thus overlaps various other disciplines - operational risk management , financial risk management etc. - but is differentiated by its strategic and long-term focus. ERM systems usually focus on safeguarding reputation, acknowledging its significant role in comprehensive risk management strategies. Project management Project management
5005-471: The execution of the project. The key benefit is that project performance is observed and measured regularly to identify variances from the project management plan. Monitoring and controlling include: Two main mechanisms support monitoring and controlling in projects. On the one hand, contracts offer a set of rules and incentives often supported by potential penalties and sanctions. On the other hand, scholars in business and management have paid attention to
5096-433: The fact that they only delivered software in the final phase of development; any problems encountered in earlier phases meant costly rework and often jeopardized the whole project. By developing in iterations, software projects can limit effort wasted to a single iteration. Outsourcing could be an example of risk sharing strategy if the outsourcer can demonstrate higher capability at managing or reducing risks. For example,
5187-565: The findings of risk assessments in financial, market, or schedule terms. Robert Courtney Jr. (IBM, 1970) proposed a formula for presenting risks in financial terms. The Courtney formula was accepted as the official risk analysis method for the US governmental agencies. The formula proposes calculation of ALE (annualized loss expectancy) and compares the expected loss value to the security control implementation costs ( cost–benefit analysis ). Planning for risk management uses four essential techniques. Under
5278-560: The first integrated process for portfolio, program, and project management ( total cost management framework). In 1969, the Project Management Institute (PMI) was formed in the USA. PMI publishes the original version of A Guide to the Project Management Body of Knowledge (PMBOK Guide) in 1996 with William Duncan as its primary author, which describes project management practices that are common to "most projects, most of
5369-409: The government agencies or contracted out to contractors. Another classification of project management is based on the hard (physical) or soft (non-physical) type. Common among all the project management types is that they focus on three important goals: time, quality, and cost. Successful projects are completed on schedule, within budget, and according to previously agreed quality standards i.e. meeting
5460-416: The impact of the event equals risk magnitude." Risk mitigation measures are usually formulated according to one or more of the following major risk options, which are: Later research has shown that the financial benefits of risk management are less dependent on the formula used but are more dependent on the frequency and how risk assessment is performed. In business it is imperative to be able to present
5551-672: The initiation stage, the project is planned to an appropriate level of detail (see an example of a flowchart ). The main purpose is to plan time, cost, and resources adequately to estimate the work needed and to effectively manage risk during project execution. As with the Initiation process group, a failure to adequately plan greatly reduces the project's chances of successfully accomplishing its goals. Project planning generally consists of Additional processes, such as planning for communications and for scope management, identifying roles and responsibilities, determining what to purchase for
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#17327721355315642-450: The loss attributed to war is retained by the insured. Also any amounts of potential loss (risk) over the amount insured is retained risk. This may also be acceptable if the chance of a very large loss is small or if the cost to insure for greater coverage amounts is so great that it would hinder the goals of the organization too much. Select appropriate controls or countermeasures to mitigate each risk. Risk mitigation needs to be approved by
5733-597: The most part, these methods consist of the following elements, performed, more or less, in the following order: The Risk management knowledge area, as defined by the Project Management Body of Knowledge PMBoK, consists of the following processes: The International Organization for Standardization (ISO) identifies the following principles for risk management: Benoit Mandelbrot distinguished between "mild" and "wild" risk and argued that risk assessment and management must be fundamentally different for
5824-475: The network diagram that has no extra time available (or very little extra time)." Critical chain project management (CCPM) is an application of the theory of constraints (TOC) to planning and managing projects and is designed to deal with the uncertainties inherent in managing projects, while taking into consideration the limited availability of resources (physical, human skills, as well as management & support capacity) needed to execute projects. The goal
5915-405: The objective, participant list, and facilitation methods. The initiating processes determine the nature and scope of the project. If this stage is not performed well, it is unlikely that the project will be successful in meeting the business' needs. The key project controls needed here are an understanding of the business environment and making sure that all necessary controls are incorporated into
6006-743: The organization or person making the risk management decisions. Another source, from the US Department of Defense (see link), Defense Acquisition University , calls these categories ACAT, for Avoid, Control, Accept, or Transfer. This use of the ACAT acronym is reminiscent of another ACAT (for Acquisition Category) used in US Defense industry procurements, in which Risk Management figures prominently in decision making and planning. Similarly to risks, opportunities have specific mitigation strategies: exploit, share, enhance, ignore. This includes not performing an activity that could present risk. Refusing to purchase
6097-512: The organization. For example, when working on a brick-and-mortar design and construction, projects will typically progress through stages like pre-planning, conceptual design, schematic design, design development, construction drawings (or contract documents), and construction administration. While the phased approach works well for small, well-defined projects, it often results in challenge or failure on larger projects, or those that are more complex or have more ambiguities, issues, and risks - see
6188-442: The other hand, allows for stochastic activity times; the times at which each activity will be carried out are uncertain or varied. Because of this core difference, CPM and PERT are used in different contexts. These mathematical techniques quickly spread into many private enterprises. At the same time, as project-scheduling models were being developed, technology for project cost estimating , cost management and engineering economics
6279-511: The parodying 'six phases of a big project'. The incorporation of process-based management has been driven by the use of maturity models such as the OPM3 and the CMMI (capability maturity model integration; see Image:Capability Maturity Model.jpg Project production management is the application of operations management to the delivery of capital projects. The Project production management framework
6370-400: The person who has been in the accident. The insurance policy simply provides that if an accident (the event) occurs involving the policyholder then some compensation may be payable to the policyholder that is commensurate with the suffering/damage. Methods of managing risk fall into multiple categories. Risk-retention pools are technically retaining the risk for the group, but spreading it over
6461-549: The planning made on the initial phase of the project suffers from a high degree of uncertainty. This becomes especially true as software development is often the realization of a new or novel product. These complexities are better handled with a more exploratory or iterative and incremental approach. Several models of iterative and incremental project management have evolved, including agile project management , dynamic systems development method , extreme project management , and Innovation Engineering®. Lean project management uses
6552-508: The primary sources of information. Nevertheless, risk assessment should produce such information for senior executives of the organization that the primary risks are easy to understand and that the risk management decisions may be prioritized within overall company goals. Thus, there have been several theories and attempts to quantify risks. Numerous different risk formulae exist, but perhaps the most widely accepted formula for risk quantification is: "Rate (or probability) of occurrence multiplied by
6643-523: The principles from lean manufacturing to focus on delivering value with less waste and reduced time. There are five phases to a project lifecycle; known as process groups. Each process group represents a series of inter-related processes to manage the work through a series of distinct steps to be completed. This type of project approach is often referred to as "traditional" or " waterfall ". The five process groups are: Some industries may use variations of these project stages and rename them to better suit
6734-572: The project into compliance with the project management plan. Project maintenance is an ongoing process, and it includes: In this stage, auditors should pay attention to how effectively and quickly user problems are resolved. Over the course of any construction project, the work scope may change. Change is a normal and expected part of the construction process. Changes can be the result of necessary design modifications, differing site conditions, material availability, contractor-requested changes, value engineering, and impacts from third parties, to name
6825-488: The project management plan's deliverables are executed accordingly. This phase involves proper allocation, coordination, and management of human resources and any other resources such as materials and budgets. The output of this phase is the project deliverables. Documenting everything within a project is key to being successful. To maintain budget, scope, effectiveness and pace a project must have physical documents pertaining to each specific task. With correct documentation, it
6916-446: The project's initiation. Project meetings or project committees enable the project team to define and monitor action plans. Steering committees are used to transition between phases and resolve issues. Project portfolio and program reviews are conducted in organizations running parallel projects. Lessons learned meetings are held to consolidate learnings. All these meetings employ techniques found in meeting science , particularly to define
7007-466: The project, and holding a kick-off meeting are also generally advisable. For new product development projects, conceptual design of the operation of the final product may be performed concurrent with the project planning activities and may help to inform the planning team when identifying deliverables and planning activities. While executing we must know what are the planned terms that need to be executed . The execution/implementation phase ensures that
7098-404: The project. In addition, BRM practices aim to ensure the strategic alignment between project outcomes and business strategies. The effectiveness of these practices is supported by recent research evidencing BRM practices influencing project success from a strategic perspective across different countries and industries. These wider effects are called the strategic impact. An example of delivering
7189-423: The project. Any deficiencies should be reported and a recommendation should be made to fix them. The initiating stage should include a plan that encompasses the following areas. These areas can be recorded in a series of documents called Project Initiation documents. Project Initiation documents are a series of planned documents used to create an order for the duration of the project. These tend to include: After
7280-458: The reduction approach lowers risks by implementing strategies like insurance, which provides protection for a variety of asset classes and guarantees reimbursement in the event of losses. Once risks have been identified and assessed, all techniques to manage the risk fall into one or more of these four major categories: Ideal use of these risk control strategies may not be possible. Some of them may involve trade-offs that are not acceptable to
7371-413: The risks being faced. Risk analysis results and management plans should be updated periodically. There are two primary reasons for this: Enterprise risk management (ERM) defines risk as those possible events or circumstances that can have negative influences on the enterprise in question, where the impact can be on the very existence, the resources (human and capital), the products and services, or
7462-406: The risks that it has been decided to transferred to an insurer, avoid all risks that can be avoided without sacrificing the entity's goals, reduce others, and retain the rest. Initial risk management plans will never be perfect. Practice, experience, and actual loss results will necessitate changes in the plan and contribute information to allow possible different decisions to be made in dealing with
7553-532: The role of integrators (also called project barons) to achieve a project's objectives. In turn, recent research in project management has questioned the type of interplay between contracts and integrators. Some have argued that these two monitoring mechanisms operate as substitutes as one type of organization would decrease the advantages of using the other one. In multi-phase projects, the monitoring and control process also provides feedback between project phases, to implement corrective or preventive actions to bring
7644-405: The same term [REDACTED] This disambiguation page lists articles associated with the title ACAT . If an internal link led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=ACAT&oldid=1221920315 " Category : Disambiguation pages Hidden categories: Short description
7735-447: The severity of the loss or the likelihood of the loss from occurring. For example, sprinklers are designed to put out a fire to reduce the risk of loss by fire. This method may cause a greater loss by water damage and therefore may not be suitable. Halon fire suppression systems may mitigate that risk, but the cost may be prohibitive as a strategy . Acknowledging that risks can be positive or negative, optimizing risks means finding
7826-454: The success of any project depends on how well four key aspects are aligned with the contextual dynamics affecting the project, these are referred to as the four P's : There are a number of approaches to organizing and completing project activities, including phased, lean, iterative, and incremental. There are also several extensions to project planning, for example, based on outcomes (product-based) or activities (process-based). Regardless of
7917-574: The time." Project management methods can be applied to any project. It is often tailored to a specific type of project based on project size, nature, industry or sector. For example, the construction industry, which focuses on the delivery of things like buildings, roads, and bridges, has developed its own specialized form of project management that it refers to as construction project management and in which project managers can become trained and certified. The information technology industry has also evolved to develop its own form of project management that
8008-426: The two types of risk. Mild risk follows normal or near-normal probability distributions , is subject to regression to the mean and the law of large numbers , and is therefore relatively predictable. Wild risk follows fat-tailed distributions , e.g., Pareto or power-law distributions , is subject to regression to the tail (infinite mean or variance, rendering the law of large numbers invalid or ineffective), and
8099-416: The whole group involves transfer among individual members of the group. This is different from traditional insurance, in that no premium is exchanged between members of the group upfront, but instead, losses are assessed to all members of the group. Risk retention involves accepting the loss, or benefit of gain, from a risk when the incident occurs. True self-insurance falls in this category. Risk retention
8190-535: Was developed by the U.S. Navy Special Projects Office in conjunction with the Lockheed Corporation and Booz Allen Hamilton as part of the Polaris missile submarine program. PERT and CPM are very similar in their approach but still present some differences. CPM is used for projects that assume deterministic activity times; the times at which each activity will be carried out are known. PERT, on
8281-601: Was evolving, with pioneering work by Hans Lang and others. In 1956, the American Association of Cost Engineers (now AACE International ; the Association for the Advancement of Cost Engineering ) was formed by early practitioners of project management and the associated specialties of planning and scheduling , cost estimating, and project control. AACE continued its pioneering work and in 2006, released
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