We Serve Risk Managers
What is Risk Management?
Risk management is a systematic and iterative process comprising four steps:
- Plan – to establish risk management objectives;
- Assess – to identify and analyze risk;
- Treat – by planning and implementing risk responses; and
- Control – by monitoring, communicating and enhancing risk management effectiveness.
The goal of risk management is to increase the probability that a planned asset, project or portfolio achieves its objectives. In total cost management (TCM), potential deviations from plans are all considered potentially adverse to overall performance. In this sense, perceived opportunities may also pose a threat. However, if properly managed, the project or asset management team may be able to capitalize on opportune uncertainties.
The risk management process is applied in conjunction with the other asset and project control planning processes such as scope development, cost estimating, schedule planning, schedule development, resource planning, procurement planning and financial systems integration. In the context of TCM’s strategic asset management process, the term enterprise risk management (ERM) recognizes that the risk management process should be applied to overall enterprise, portfolio and program level objectives, not to just a single business unit, asset or project.
Every organization manages risk but, depending on their level of risk management maturity, this might not be done in a visible, repeatable or consistent way. Risk management is an essential facet of enterprise governance that provides a disciplined environment for proactive decision-making.
AACE Certifications
Project Risk Management Professional (PRMP) – Professional Level
A PRMP is a skilled and knowledgeable practitioner whose role is to establish an effective risk management plan and implement that plan in accordance with the project/program/portfolio’s objectives. It is the PRMP’s responsibility to clearly communicate in verbal and written forms, both internally and externally.
Decision & Risk Management Professional (DRMP) – Expertise Level
A DRMP is a senior-level practitioner with business experience in life cycle asset and project management with exhibited knowledge and skills ranging from analytical to socio/psychological to management. A DRMP also has extensive technical experience in specialized tools and services such as decision analysis, cost risk and uncertainty analysis, and schedule risk analysis. DRMPs demonstrate strong communication skills to connect with all levels of project stakeholders and are increasingly employed by owners and stakeholders in their decision-making process – whether it is for a go, no-go decision on an investment interest or determination of time and cost contingency amounts for capital projects.