**5. Discussion**

90 Risk Management – Current Issues and Challenges

Phase of the life cycle of a project

**Conceptualisation**

**Planning**

**Execution**

1,4,6, 10,11,12,19,24, 28,30

1,2,3, 4,6,7, 8,10,11, 12,15,16,17,18,19, 22,23,24,25,28, 29,30,31

1,2,3,4,6, 8,10,11,13,17, 18,19,22,23,25, 26,28

8,10,13,28

**Qualitative Risk Analysis**

**Risk Identification**

a regular revision of the outputs of the applied risk techniques.

**Figure 1.** Risk technique mapping: risk management and project life-cycle phases

Phase of the risk management process

**Risk Response**

1,2,3,9,19,27

*Revision of the outputs obtained from the techniques previously used*

> **Risk Monitoring and Control**

5,9,10,12, 13,15,17,19,22, 27,28,29,30

5,8,13

**Quantitative Risk Analysis**

5,8,9,10,11, 13,14,17,18,19, 20,21,23,26,27

relationship between the maturity towards risk and the phases of the risk management process that are carried out by a company. By considering the maturity model proposed by Hillson [37], a Novice level of maturity usually implies performing just risk identification. A Normalised maturity also involves a qualitative risk analysis and, in some limited cases, also risk response and monitoring and control. Finally, a Natural maturity is associated with undertaking the complete risk management process, from identification to monitoring and control, including the quantitative risk analysis. Therefore, the quantitative analysis of risk distinguishes companies with a Natural maturity level from companies having a Normalised maturity level. Additionally, in the Natural maturity level there is a complete integration between the project management and the risk management processes that allows

> Communication, information, and hence knowledge are the cardinal points for an attitude towards project risk management that goes beyond an informal approach limited to qualitative investigation. A systematic acquisition and organisation of information is a necessary step in order to move from a subjective knowledge about risk, that has to be elicited from experts, to an objective and easily accessible knowledge forming the condition for a quantitative risk analysis. The framework proposed in this chapter aims to help such transition by generating knowledge about the potentiality of application of common risk techniques.

> Some advantages can be identified. First of all, the developed taxonomy helps to understand how the project environment relates to risk techniques. Also, the suggested scheme provides guidelines about the most relevant dimensions that should be taken into account simultaneously in a risk management process, thus making it more comprehensive, even if it can never be complete because of the limited amount of available resources and the bounded rationality of human beings [66]. This generates knowledge based on the degree of maturity towards risk of the organisation running the project and such knowledge in turn increases the level of corporate awareness towards the instruments to tackle risk. Furthermore, the proposed framework benefits from being quite general, so that it can be

easily adapted to reflect the requirements of different industries. Finally, it is suitable to both small-scale and large-scale projects.

A Framework to Select Techniques Supporting Project Risk Management 93

**Author details** 

**7. References** 

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Sabrina Grimaldi, Carlo Rafele and Anna Corinna Cagliano

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*Department of Management and Production Engineering, Politecnico di Torino, Torino, Italy* 

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Tangible and intangible benefits can be derived from the application of the framework. Tangible advantages are associated with decision-making and include an improved understanding of projects, giving as a consequence a better control over resources, the provision of a structured support to develop and implement monitoring strategies, and a better use of means to identify and assess risk with an inherent positive impact on the evaluation of contingencies. Among intangible benefits, facilitation of a rational risk taking and improvement of communication can be mentioned. The developed framework also encourages a more proactive approach to risk as a result of a well planned management process. All these characteristics ultimately emphasise the integration among project and risk management.

However, the criteria and the classification of the techniques to support risk management have been derived exclusively from the available literature and from the authors' experience. Empirically testing the outcomes of this study by applying them to real projects would be of great value to validate and refine the framework.

Therefore, future research efforts will be directed towards the implementation of the framework in multiple project settings in representative industries. Enhancing the taxonomy by introducing further dimensions, such as the complexity level of a project and the degree of innovation of its product, will be considered. The degree of innovation of the product of a project is particularly interesting because it may be connected with the phases of the project life cycle. In fact, the more innovative is the outcome, the more the risk management process will be concentrated in the planning phase. Conversely, the less innovative the product the more the focus on risk in the execution phase. Additional evolutions will be concerned with a systematic analysis of the concepts of method, technique, and tool together with the study of the relationships among them, and with extending the framework to include new practices to support risk management. Finally, a further research line could deal with the integration of the proposed framework into a global project management process with the aim of overcoming the traditional separation between running a project and identifying, assessing, and controlling the associated risks.
