“Australian companies are gambling the future of millions of dollars of software development projects by not implementing simple risk management schemes, an industry study has found.”(AFR, 1996) Risk management is an essential aspect of project management. Defining, controlling, managing, and eliminating risks helps project managers succeed in their relative projects.
Risk management involves many different techniques related mostly to risk analysis. Such techniques are sometimes complex and time-consuming as is the case with the Monte-Carlo simulation risk analysis technique. Due to such complexities, many software were developed to solve this problem.
Risk management software can be divided into two main categories: integration software and standalone ones.
By integration software we mean tools that were built in order to integrate with existing project management software. For example in case you want to use the Monte Carlo simulation technique “with Microsoft Project you need to have add-on tool.
There are a number of such tools available on market including @RISK for Project from Palisade Corporation (www.palisade.com), RiskyProject from Intaver Institute (www.intaver.com), Pertmaster software from Pertmaster Limited (www.pertmaster.com), Risk+ from S/C Solutions Inc. (www.cs-solutions.com).”(INTAVER, n.d.)
As for the standalone software, Riskworld.com (Tec-com Inc., 2008) lists more than fifty different risk-related ones that range from desktop applications to web-based applications. One example is “The Risk Manager” from RMSS: “The Risk Manager© is a user friendly application, based on the principles and workflow of the Australian and New Zealand Standard for Risk Management, known as AS/NZS 4360. The core process of Identification, Assessment, Control and Monitoring has been embedded in the application.” (RMSS, 2008)
Using risk management software, however, be it a tool or standalone software, has both advantages and disadvantages.
Other than the obvious advantage of saving time and eliminating the complexities of some of the risk analysis and management techniques, risk management software allow project managers through a user-friendly interface to access the latest tools to assess the project risks. For instance they provide answers to questions such as:
- What is the chance of your project being completed on schedule and within budget?
- What is the chance that the particular task will be on the critical path?
- What tasks affect the project duration at most?
- What is the project success rate?”(INTAVER, n.d.)
In some cases, such software allow him/her to, furthermore, get alerts regarding any risk that may have trespassed a preset threshold.
Having an online risk management application can also allow charts, tables, and different reports to be prepared in the easiest and most time-efficient manner.
Moreover, having the ability to integrate some application tools with the general project management software, enable the project manager to have a single management dashboard for the different processes involved.
As for the disadvantages of using such software, we could start by mentioning the additional cost involved which is on average around US$ 2000 excluding maintenance and support.
User-friendliness is not a common characteristic among such rigid scientific tools. Some risk management software require training while others have minimal or no proper documentation (especially the free tools). In similar cases, the risk management software will be time-consuming and even sometimes inaccurate in case misused.
Finally, relying on automated results in the form of charts and other types of reports to manage project risks could actually add unforeseen risks in case wrong or imprecise input was entered due to inexperience or simply by mistake, or in other cases where the software itself was defected or contained bugs. Some web risk management applications, for instance, might fail to provide instant critical information due to connection or server failure causing instant severe damage to the project’s timeline and/or budget.
To conclude, risk management software although built to help projects succeed with minimum or controlled risks, usage of such tools requires full consciousness of the consequences that might result from any related misuse.
1. Australian Financial Review AFR (Thursday, 13 June 1996) “Cut risk or face costly software consequences, warns IT expert” [online] available from: http://www.zenkara.com/aust_fin_rev.pdf
2. INTAVER Institute Inc. (n.d.) Quantitative Risk Analysis with Microsoft Project [Online Article] available from: www.intaver.com/Articles/Article_MSProjectRiskAnalysis.pdf
3. Tec-com Inc. (July 21, 2008) Risk-Related Software [online] available from: http://www.riskworld.com/SOFTWARE/sw5sw001.htm
4. Risk Management & Safety Systems - RMSS (2008) The Risk Manager [online] Available from: http://www.rmss.com.au/Products/RiskManager.aspx