The person who risks nothing, does nothing, has nothing, is nothing and becomes nothing
The attack on Olympic athletes in Munich, attack on World Trade Centre, Tsunami disaster in 2004, terrorist attack on the Central Bank, remind us of risks. The world is a very dangerous and risky place. When you read a newspaper you learn the number of mishaps encountered by people daily. For some people,life is also a risky business. Still , for some people, life would be a boring affair without some risk.

Risk is an uncertain event or condition that, if it occurs, has an effect on at least one organizational objective. Two main categories of risks are positive risks and negative risks. Possitive risks are opportunites and negatrive risks are threats.

We subconsciouly think of what should be done to reduce the chances of occurrences and impacts of such incidents. This is what is called risk managmet. If risk is not managed, it leads to unforeseen outcomes. It is because of this fact that risk managmet has been accepted as an essentital activity in business, projects and everyday life.

Organizations progress by exploiting opportunities in an innovative manner. To do this organizations have to change very fast. Change can best be achieved by using Project Management tools. PM tools enhance organizational flexibility and speed. Thus, the purpose of establishing a project is to introudcue some change that will benefit the organization or society. Changes are new and unique that consist of risks. Risks are uncertainities. Therefore one needs proactive risk management approaches to ensure smooth performance of a project. But most of us overlook this fator and face serious problems.

As a project manager you are expected to take decisions that will lead the project to success. 100% success can be achieved if your decisions are based on all the information you need to make the decision. But in real life, all decisions cannot be taken with complete information and this creates some uncertainty in the outcome of the project.

The risk faced by organizations today are very complex and high because of the high competition, changing customer needs, changing economic conditions and rapidly advancing technology. This poses numerous threats to the successful implementation of projects. Therefore organizations that manage projects, need sound project risk managment approaches to ensurre successful completion of projects.

The purpose of project risk management is to identify possible uncertainties that might negatively impact the project and take some steps to eliminate them or deal with them in a planned manner and to take advantage of opportunities that might arise during the project life cycle.

Project risk management is not optional. It is a mandatory process. Neither is it a too costly process. It will definitely deliver benefits during the project life cycle.

-Duminda Weerarathne MBA (Sri Jay), PMP, RMP