More and more companies have found that they have failed to deliver the expected benefits identified in the business case for change. Budget over-runs are commonplace and the inability of projects to deliver on time has almost become the norm. A study by Accenture found that, as project complexity increases, only 30 percent of them are being delivered on budget, and only 15 percent are on time.
Risk management seeks to anticipate and address uncertainties that threaten the goals and timetables of a project. By identifying and managing risks today organisations and businesses can plan well ahead of the problem occurrence. According to the Project Management Institute sound risk management processes reduce the likelihood of project failure, be it financial, schedule or performance based.
Effective Risk Management consistently delivers the one of the highest returns on investment achievable anywhere in the organization.
By investing a little time and effort to embed a sound risk management process, organisations are able to deliver huge increases to bottom line profit.
Without effective risk management it is widely recognized that failures are all too common.Only 28% of IT projects deliver on time and on budget, and more than 25% fail to deliver at all.
The Project Management Institute (PMI) found that projects with a sound risk process have:
- 15% higher success rate
- 17% increase in cost efficiency
- 15% increase in schedule efficiency.
This directly impacts the bottom line by reducing cost overruns, schedule delays or technical failures.
Managing risk is no longer a box ticking exercise that drains company resources, it is a fundamental competitive advantage for those that successfully implement a sound process.