The Concept of Risk in Diffirent Project Management Approaches - Essay Example

If we talk about the risk management in agile (Scum) software project management, it basically allows us to deal with risks on the daily basis. For instance, till the end of a day we identify and record the project risks. On the other hand, PRINCE2 goes beyond the definition of risk as it divides the risk into two categories on the basis of their positive or negative consequences. These two categories can be threat and opportunity. In this scenario, a threat could be an uncertain activity or action which if it occurs can cause negative effect on the project’s likelihood of achieving its objectives.

On the other hand, an opportunity is an event if it takes place can cause a favorable and advantageous effect on the project likelihood of achieving its objectives (Brady, 2009; Rehman et al., 2010; TutorialsPoint, 2012). However, in this paper we will consider the risk as a threat. In addition, risk management is an essential element of both the Agile (scrum) and Prince2 project management approaches. This paper will discuss the concept of risk from the perspective of Prince2 and Scrum project management approaches. . According to this attribute, risk may or may not take place; in other words, we are not 100% sure about the occurrence of possible risks.

On the other hand, another attribute is acknowledged as “loss”. According to this attribute, the risk turns into a certainty, unnecessary outcome or losses can take place. Hence, while evaluating project risks, it is necessary to assess the degree of loss and the level of improbability associated with each risk (Pressman, 2001, p.146; Kerzner, 2006, p.743). In addition, risk management is the process of identifying, measuring, and managing what might go in the wrong way into a project before it turns out to be a danger to the successful completion of the project or the implementation of a software application.

Moreover, risk management is a very important skill to manage a project successfully (Turban et al., 2005, p.712; Whitten et al., 2000, p.83). According to (Murthi, 2002), large software systems cannot be developed without facing a wide variety of risks. In this scenario, a report published by “The Standish Group” with the name of "CHAOS: A Recipe for Success," shows that only less than 30% of all software development projects are within budget and on time as well as fulfil all their indented requirements.

On the other hand, more than 70% either fail or do not fulfil software development goals. Additionally, these facts are frightening in a cost-cutting measure where software systems play a significant role in fact they can make or break the organization (Murthi, 2002). In this paper, we will use the approach of identifying, measuring, and managing what might go in the wrong way into a project before it becomes problem for the successful completion of a project. Concept of Risk in Prince2 Project Management