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Solving for Project Risk Management

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Solving for Project Risk Management

Understanding the Critical Role of Uncertainty in Project Management

McGraw-Hill,

15 min read
6 hours saved
10 take-aways
Audio & text

What's inside?

This project manager’s guide to risk management and contingency planning might help you avoid disaster.


Editorial Rating

7

Qualities

  • Concrete Examples
  • For Experts
  • Insider's Take

Recommendation

As a PhD mathematician and data scientist, Christian Smart approaches project management a little differently than most authors. His emphasis on rigorous, quantitative risk management, based on correlations and probabilities, may stretch the traditional project manager. He surely intends this. For project managers willing to wade through it, though, Smart’s insights will undoubtedly improve risk management skills and project management outcomes overall. You’ll gain a greater appreciation for what can go wrong in major projects – and learn how to sidestep disasters.

Summary

Large public and private projects share a disturbing tendency to exceed initial cost and time budgets.

Oftentimes, overruns themselves exceed the entire original cost and/or time estimates for the project. These mistakes absorb funds and resources that might have enabled other projects and ventures. In some cases, they even bankrupt once-thriving organizations.

NASA’s James Webb Space Telescope (JWST) was originally expected to cost under $1 billion and launch into low Earth orbit in 2007. As of 2021, it has cost about $10 billion and the launch date remains a moving target. Smaller projects, like Huntsville’s $25 million hospital expansion started in 2004 with a three-year completion target. It took six years and cost over $80 million, including lawsuits with contractors. In the mid-1990s, multibillion-dollar pharmaceutical supplier FoxMeyer went bankrupt attempting to implement enterprise resource planning software. After three years and $100 million, the system performed worse than the one it replaced. FoxMeyer collapsed.

Organizations must take risks to innovate and succeed – but should not proceed blindly.

About the Author

Christian B. Smart now serves as chief data scientist at Galorath Federal after a long career as project executive with NASA and the Department of Defense. He holds a PhD in applied mathematics.


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