As the writer for The Risk Blog, I found it necessary to write a quick article on Project Management Institute’s latest Practice Guide, which released just this past week. This new guide aligns with our favorite topic, risk management, making it especially relevant for our readers!
The Risk Management in Portfolios, Programs, and Projects: A Practice Guide is the latest of PMI’s “Practice Guides”. PMI’s practice guides are meant to:
“Practice guides offer information and instructions to assist in applying PMI standards.”
The Risk Management Practice Guide (We will call it this to cut down on the full name) is a way to align with the structure and content within the Project Management Book of Knowledge (PMBOK) – 7th Edition. This guide helps to ensure that risk management is more closely aligned to the PMI Talent Triangle around Ways of Working, business Acument, and Power Skills. (Risk Management Practice Guide, pg. V)
Why Do We Need a Risk Management Practice Guide?
Have you tried to read The Standard for Risk Management in Portfolios, Programs, and Projects?
It’s not the easiest thing to read. It’s detailed but overly focused on processes, tools, and techniques, as seen in the PMBOK’s Process Groups and Knowledge Areas.
It really is a dry document. Just like the PMBOK, it is better for reference than for actual reading comprehension.
The Risk Management Practice Guide, though, is easier to read. Still full of detailed information, but you feel less like you are reading a set of terms and guidelines and more like a textbook. A textbook that’s written for you to comprehend.
But, if you have no interest in risk management, it might still come across as dry though. So be prepared for that.
Overview of the Risk Management Practice Guide
The Purpose and Scope
The purpose and scope of this document is spelled out within pages 2-3, and basically defines them as:
The Purpose:
The Risk Management Practice Guide provides comprehensive guidance on risk management. Tailored for integration into the management and governance of Portfolio, Programs, and Projects, it aims to:
Explain the fundamentals of risk management
Link risk management activities to Enterprise Risk Management
Apply PMI Standards into the risk management principles across portfolios, programs, and projects
As you read it, you’ll notice that the Risk Management Practice Guide works to harmonize risk management practices from the enterprise level down to projects. The goal is to ensure risk management is done naturally across all management levels.
The final output and purpose is to allow us to tailor risk management to our organization’s prices or our specific project characteristics and needs.
The Scope:
The scope of the Risk Management Practice Guide is to provide guidance on risk management tailored to the stakeholders of portfolios, programs, or projects.
PMI wrote this practice guide for anyone involved within risk management, such as:
Portfolio managers
Program managers
Project managers
Project coordinators
Project practitioners
Project planners
Business analysts
Risk managers
Risk consultants
Consultants
Agile practitioners
Agile consultants
Product owners
Sponsors
Vendors
The Risk Management Practice Guide is relevant to those who:
Work on portfolios, programs, projects, or initiatives, whether full-time or part-time.
Operate within the portfolio, program, or project management offices.
Get tasked with identifying or managing risks associated with an initiative.
Teach or study risk management.
Participate in any part of the project value delivery chain.
Overall the purpose and scope of this practice guide is to ensure that all stakeholders have the necessary knowledge to effectively conduct risk management while integrating it into their specific roles.
Overall Structure
The Risk Management Practice Guide consists of seven sections with three appendixes, as outlined on pg. 6.
Section 1: Introduction
Section 2: Context and Key Concepts of Risk Management
Section 3: Framework for Risk Management in Portfolio, Program, and Project Management
Section 4: Risk Management Life Cycle in Portfolio, Program, and Project Management
Section 5: Risk Management in the Context of Portfolio Management
Section 6: Risk Management in the Context of Program Management
Section 7: Risk Management in the Context of Project Management
Appendix X1: Contributors and Reviewers of Risk Management in Portfolios, Programs, and Projects: A Practice Guide
Appendix X2: Techniques for the Risk Management Framework
Appendix X3: Risk Classification
What Makes the Risk Management Practice Guide Important?
The field of Project Risk Management is growing, and so is the need for detailed risk management planning.
People fear what they don’t know. The overall risk management practice needs updating as projects become more complex due to technology and AI. And this document does precisely that.
After reading the Practice Guide, I compared it to The Standard for Risk Management. Many of the chapters align, like Chapter 3, but that alignment comes with expanded topics.
Frameworks and Definitions
Two enhancements (out of many) were enhancements to organizational process management and risk evaluation factors.
Organizational Process Management:
OPM gets a facelift in the practice guide with a new figure that really speaks to the way portfolios, programs, projects, and operations impact strategic objectives:
Risk Evaluation Factors:
Anyone who builds a Risk Matrix knows we evaluate risk based on probability and impact. Although the Risk Management Practice Guide mentions risk probability and impact, it also explicitly lists “Compliance.” I’ve seen this in the financial sector; you can have low probability and low impact – but if we are legally or contractually obligated, this risk might head to the top of our list due to compliance requirements.
Practical Application
Within Chapters 4-7, we see the use of a Practical Application, Case Study on the Compact Wind Turbine project.
This case study is divided into smaller sections. It follows the Risk Management Life Cycle and evolves as the chapters discuss programs and portfolios. This practical application gives a real-life example of using risk management techniques within the risk management process, giving examples of strategic to tactical-level execution.
Most people, like myself, like to see real-world applications of topics. While a theoretical topic can be hard to grasp, seeing the work in action helps visualize it. This case study helps analyze the topics and put them into a logical format for both students and practitioners.
The Risk Management Practice Guide looks to be more than just an update to The Standard for Risk Management, it is an overhaul. Topics are explained in more detail, the appendixes are shortened, and even a case study is incorporated into the guide.
If I had to answer “Why is this Risk Management Practice Guide Important?” I’d say that it gives a better explanation of topics for those studying or conducting risk management. The new visuals and the case study help explain topics any project management professional can relate to.
Key Takeaways
My key takeaways on why I like this new Practice Guide:
Expansion on Topics: This practice guide somehow enhanced discussions on the risk management framework and various risk management techniques, but it ended up being 20+ pages shorter. Instead of every detail being within the Appendixes like The Standard for Risk Management, the details are logically put within the text, giving better information in a succinct way.
Easier to Read: Kudos to the authors and contributors. They made this guide more straightforward to read. Incorporating the case study helps break down the concepts into real-life applications while bringing a better tone to the guide overall.
Better Charts and Figures: The new charts and figures help explain various topics. A small but big change is that all the charts and figures are in color. This gives some of the old ones new life and helps visually explain the new ones.
My Conclusion
The Risk Management Practice Guide is a great resource for project management practitioners. It provides a robust framework to enhance your risk management capabilities.
The practice guide keeps all the fundamentals of risk management while supporting various topics with more details and real-life applicability. It helps clarify the importance of portfolio, program, and project impacts on an organization’s strategic outlook.
This guide provides more details where needed and cuts out some redundancy, enabling project managers to learn and apply risk management more effectively. It will also help risk management students get a better idea of what risk management is and how to apply it in their projects, further making it easier to apply the concepts during their exams.
Overall, it gets a thumbs-up from me! And that’s without my bias for Risk Management.
How to Get a Copy of This New Practice Guide:
Download at PMI.org: Risk Management in Portfolios, Programs, and Projects: A Practice Guide
You’ll need a PMI membership to download. If you do not have a membership – check out my article on Why You Should Have a PMI Membership.
Buy at Amazon: Risk Management in Portfolios, Programs, and Projects: A Practice Guide
(Above is an Amazon Affiliate link; I do gain a small percentage of your order which helps cover the costs of running The Risk Blog)
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