Risk and decision analysis in Projects Second Edition

Abstract

Is there anything more important to the success of a project than making good decisions? This management skill is certainly near the top of the list, yet few of us have had formal training in decision making. Decision analysis is a discipline that helps people choose wisely under conditions of uncertainty. This book introduces risk and decision analysis, with special attention to the decisions in project management. We are seeing increasing interest in probabilistic techniques for all types of evaluations. Shorter business cycles and ever-greater competition are pressuring organizations for better resource management. Furthermore, every day each of us deals with-or at least worries about-risk. Fortunately, we are learning more about value creation and how to work with uncertainty. Recent evaluation and project management software provides help in assessing and managing threats and opportunities. Project management and, especially, project risk management, are receiving great attention these days. Project owners are becoming more demanding of performance and less tolerant of surprises. Opportunities often accompany risk, and a value engineering-like approach can often deliver additional value. The Project Management Institute (PMIB) realized "explosive growth of about 350 percent during 1995-2000. As this edition was being written, PMI released A Guide to the Project Management Body of Knowledge (PMBOKB Guide) - 2000 Edition. The Guide's Chapter 11, Project Risk Management, is the most changed. PMI has available another risk management book: Project and Program Risk Management: A Guide to Managing Project Risks and Opportunities, edited by R. Max Wideman. His popular book provides a different, more managerial perspective from this book about the craft of project management and risks. I believe that the two books nicely complement each another.