What Does Risk Management Mean in the Context of Project Management?

What does risk management mean in the context of project management?

* What is risk?
What is risk, risk is an opportunity. (Alleman, 2005) Risk is an uncertainty of an outcome. With uncertainty come opportunities for success. Everyone takes risks everyday. It is a part of life that we can not ignore or if we do, we become hobbits never leaving the shire.
* What is Risk Management?
Risk management focuses on potential failures in a project. Where as, project management is focused on the success of opportunities. "If the project manager is busy "managing" the risks, there is little time to manage opportunities - ignoring half the "management in the presence of uncertainty" equation." (Alleman, 2005) Risk management is a continuing process of proactively identifying risks with the hopes that you avoid failures. By actively monitoring potential risks, we can avoid failures in a project.

* How does it fit into project management and its nine knowledge areas?
Risk Management and Project Management are compliments to each other. "Both disciplines make important contributions to successful business outcomes." (Gack, 2006) You can't Project Management without having Risk Management. In two of the groups of knowledge areas, project risk management is included. (Kendrick, 2003, pg 11) This is the Planning Processes and Controlling Processes.

* When should Risk Management be performed?

Risk Management should be performed before, during and while the "work is being done". (Mulcahy, 2004). While every attempt should be made to identify the risks during the planning stages, "one missed risk, can lead to many missed risks" (Mulcahy, 2004). When this occurs, there is typically a problem with either the risk management plan and/or the implementation of the plan.

References:
Mulcahy, Rita, Projects@Work (August 26, 2004), Risk Management, Tricks of the Trade® for Project Managers is a publication of RMC Publications, Inc... [Electronic Version] Retrieved on May 22, 2006 from http://www.projectsatwork.com/article.cfm?ID=219659

Gack, Gary A., is a managing partner in Six Sigma Advantage in based in Narragansett, Rhode Island (USA), 2006, " Six Sigma and the Project Management Body of Knowledge", [Electronic Version] Retrieved on May 22, 2006 from http://software.isixsigma.com/library/content/c040721b.asp
Kendrick, Tom, 2003, "Identifying and Managing Project Risk" Amacom, New York, New York, 10009.
Alleman, Glen B. (September 22, 2005), "Risk/Opportunity" [Electronic Version] Retrieved on May 22, 2006 from http://www.projectsatwork.com/content/articles/227118.cfm