[Use and Benefits of Tools for Project Risk Management]

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Abstract

Risk management is one of key processes of risk management in financial management. There are many tools available to support various phases of risk management. We will present results of the study designed to identify tools that are used and which are associated with successful finance management in general, and efficient management of project risk in particular. Study will be based on the questionnaire administered to the sample software finance managers and high-tech industries. Response data were analyzed to find tools are more likely to be used in organizations that report better performance management of project and where value of contribution of risk management processes.

Use And Benefits Of Tools For Risk Management In Financial Management

Introduction

Risk management in projects is currently one of main topics of interest to researchers and professionals working in field of project management. (Fairley, 1994)The recent survey of research on subject of Williams includes 241 references. Risk management has been named one of eight main areas of Project Management Body of Knowledge (PMBOK) Project Management Institute, which is largest professional organization dedicated to field of project management. (Williams, 1995) The numbers of PRM process variations have been proposed. Boehm suggests the process that consists of two main phases: risk assessment, including identification, analysis and prioritization, and risk management, including planning, risk management, risk resolution and risk management planning, monitoring and corrective action. (Paulk, 1996)

Fairley talks about seven steps: (1) identify risk factors, (2) Assess risk probabilities and effects, (3) Develop strategies to mitigate identified risks, (4) Monitor risk factors, (5) Invoke the contingency plan, (6) Manage crisis, (7) Recovery from crisis. (Dorofee, 1996)

Kliem and Ludin describe the process of four phases (identification, analysis, control and reporting) that resembles Deming's four steps to quality management (plan, do, check and act). Chapman and Ward outline the process generic Disabled consisting of nine phases: define key aspects of project, focus on the strategic approach to risk management, identify risks that may arise, information structure risk scenarios and relationships, assign ownership of risks and responses, estimating degree of uncertainty, evaluate relative magnitude of different risks, plan and manage responses through monitoring and control of execution. (Chapman, 1997)

Study objective

In this paper we present results of the study designed to answer this question. Approach consists of the survey of the sample of finance managers to find out what tools are widely used, which tools are associated with successful risk management in financial management. In this context, "tool" is term broadly, including not only special-purpose tools, but also practices and processes that can contribute to risk management in projects.

Methodology

Data for this study was obtained through the questionnaire. questionnaire, which will be written in Hebrew, will be distributed, either personally or by email to the random sample of about 400 software finance managers and high-tech sectors in Israel between April and June 2011. At end of survey will not be useful 84 completed questionnaires.

Questionnaire consists of three main sections, each with the series of short questions ...