Proceedings of the 12th European Conference on Knowledge ...

4. Risk management
Lila Rajabion and Jafar Zanganeh
Risk management consists <strong>of</strong> understanding internal and external effects which can be reasons for
<strong>the</strong> project failure. Project risk management includes processes such as leading, risk management
planning, recognizing, analyzing, and planning, supervising and controlling <strong>the</strong> project. Granting risk
management <strong>of</strong> <strong>the</strong> project increases <strong>the</strong> probability and <strong>the</strong> effect <strong>of</strong> positive events and decreases
<strong>the</strong> probability and <strong>the</strong> effect <strong>of</strong> negative events in <strong>the</strong> project. The source <strong>of</strong> project risks stems in
uncertainty present in all projects. Organizations receive <strong>the</strong> risks as <strong>the</strong> effect <strong>of</strong> uncertainty on goals
<strong>of</strong> <strong>the</strong> project and organization. The organizations and stakeholders accept different levels <strong>of</strong> risk that
is called risk tolerance. The risks that are considered threatening can be accepted if <strong>the</strong>y are in <strong>the</strong>
range <strong>of</strong> tolerance or balance with awards resulted from <strong>the</strong> risk. For example, accepting accelerating
schedule is a risk that is followed by getting award resulted from completion. Risk management helps
organizations control <strong>the</strong> risks while doing daily operations <strong>of</strong> <strong>the</strong> project. a set <strong>of</strong> guidelines and
processes consists <strong>the</strong> process <strong>of</strong> risk management. Guidelines which should be considered in risk
management are as follows (PMI2008):
Evaluate <strong>the</strong> risks permanently
Incorporate processes <strong>of</strong> risk management to all roles and operations
Use planning based on risk management
Make an acceptable level <strong>of</strong> formality in organization
5. Project risk categorizations
Project risks can be categorized in a number <strong>of</strong> ways according to <strong>the</strong> level <strong>of</strong> detail or a selected
viewpoint.(Peltonen, T., Kiiras, J., 1998). One <strong>of</strong> <strong>the</strong> most typical risk categorizations is presented in
Table 1. This four-level categorization is presented e.g. by Artto and Kähkönen. This categorisation
tries to fade a project type and be a general categorisation. Risks are divided into pure risks (e.g.
hazards and wea<strong>the</strong>r conditions), financial risks (e.g. cash flow or credit risk), business risks (almost
anything that can happen in a project) and political risks, which refer to <strong>the</strong> certain political
environment and risks that are caused mostly by extreme conditions, such as, among o<strong>the</strong>rs, war.
(Artto, K., Kähkönen, K. , Management <strong>of</strong> Uncertainty (2011)
Table 1: categories <strong>of</strong> Risks
Pure Risks
6. PMBOK and FMEA Introduction
Financial Risks
Business Risks
Political Country Risks
Designing and setting processes in modern technologies usually require paying special attention to
organization sections and this includes factors such as complexity, resource risk (both human and
financial risks) and normalizing <strong>the</strong> program (Souza, Santos, 2008). In order to understand <strong>the</strong>
differences correctly, <strong>the</strong> processes are done as project in modern technologies but many <strong>of</strong> <strong>the</strong>se
projects fail because <strong>of</strong> delaying in program and imposing unexpected expenses. In order to prevent
<strong>the</strong>se scenarios, strategy <strong>of</strong> risk management should be run in organizations (Carbone, 2004). The
risk management is a methodology from project manager institute that is presented as a guide to
knowledge range about project management (PMBOK) and is one <strong>of</strong> <strong>the</strong> most important techniques
for controlling risk in projects. We believe that extended concept <strong>of</strong> FMEA can be a supplement for
PMBOK in order to make an integral model for risk management <strong>of</strong> <strong>the</strong> projects(PMI2008). Adding
FMEA to processes <strong>of</strong> risk management makes risks identification and evaluation easy and simple.
Following concepts describe <strong>the</strong>se techniques
7. FMEA
Technique <strong>of</strong> risk analysis includes interviewing with experienced people, analyzing expected money
value (EMV) and responding matrix and o<strong>the</strong>r methods. Then data obtained from risks are compared
with references and will be modified. One <strong>of</strong> techniques for risk management was <strong>the</strong> probability times
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