Project Management: A Systems Approach to Planning, Scheduling, and Controlling, Tenth Edition

Risk Management¹

17.0 INTRODUCTION

PMBOK^® Guide, 4th Edition

Chapter 11 Risk Management

In the early days of project management on many commercial programs, the majority of project decisions heavily favored cost and schedule. This favoritism occurred because we knew more about cost and scheduling than we did about technical risks. Technology forecasting was very rarely performed other than by extrapolating past technical knowledge into the present.

Today, the state of the art of technology forecasting is being pushed to the limits on many projects. For projects with a time duration of less than one year, we normally assume that the environment is known and stable, particularly the technological environment. For projects over a year or so in length, technology forecasting must be considered. Computer technology doubles in performance about every two years. Engineering technology is said to double every three or so years. Given such rapid change, plus the inherent need to balance cost, technical performance, and schedule, how can a project manager accurately define and plan the scope of a three- or four-year project without expecting somewhat uncertain engineering changes resulting from technology improvements? With likely changing and uncertain engineering, technology, and production ...