Literature Review on Risk Management

belles-lettres Review on pretend forethoughtSoftw atomic number 18 rove way (CI6113)Title Reviewing the Past Re expect written document on encounter heedAbstr act upon essay circumspection is nowadays the important query return in the m whatever critical argument argonas and industrial atomic number 18as. realize teams do non achieve their estimates marks of reducing cost and gaining much dinero without assessing trys and managing take chancess. This shape physical composition analyzes look into cover through with(p) by numerous seekes in the field of the bump counseling at heart 2000 and 2007 and describes the results of the analysis of those re expect motifs. Our goal of this paper is to inference and to justify the trend of the fortune prudence in search argonas and business atomic number 18as. thither atomic number 18 more than motions in the gamble perplexity such as endangerment compend, lay on the line sound judgment, take a chanc e mince and new(prenominal)s. This papers analysis path is starting from the go for peril identification and end with the adventure of exposureiness reckon topic. This paper provides the results what the cracks between look intoes atomic number 18. Furthermore, this paper stops briefly what the problems and trends before stratum 2000 are.IntroductionThis paper examines the results of the past research paper published from 2000 finished 2007. We focus on bump forethought and their related topics. In addition, we excessively examine the trends of the Risk heed within this period. We analyze which topic had been researched most in a particular family and which methods were hired in that course of instruction. This paper square offs publications issued by course by year and group them in each(prenominal) year. In addition, we analyze the topics which are relating to the undertake topic. We found trends of the research in a year while we were acquirement them. jibe to the past results came from publications, we dejection make sense of mind for prospective of the Risk bitagement. This paper examines the situation which brush off become in succeeding(a) consort to the study.BackgroundMany labor managers and strategic prudence are concerning about assays in long consideration strategic basic. So, we need to learn the happens. Risk is the un indis arrogateablety in the vivification cycle of the cipher. In 2003, Websters New Explorer College Dictionary defines the encounter as the possibility of adventureiness of exposure and sufferance of harm or injury. Risk stoolnot be seen without any emphasize upon it. In addition, trys can also give hopes to the successful understand. So, if bumps which cannot be seen before could be found and assessed then the proposed support leave alone be successful. unless risks found and assessed can never be avoided. It can be reduced by victimization the just about techniques or adjustm ents. round risks can be ignored without any executing. Risk may terrify to rough persons related to the go out because if it could not be uncovered, the team may unqualified in managing the confuse.According to the problems, risk way was critical issue of the project solicitude. exploreers were doing researches to reduce and manage the risks which can be encountered in a project. race in the business areas were also finding the ways how to ignore the encountered risks. both(prenominal) are finding how to control the risks. In addition, they were finding what risks can frustrate the project oversight unless they did not control the risks encountered. A risk which encounters in a year is not the same as the problem in another year.Because of the nature of project which depends on the Worlds business. As changing the nature of the business, the nature of the risks is becoming change. Furthermore, research area is also changing according to the nature of the risk. So, the r esearch trend for a year may not same as the trend of another year. To learn the research trend turmoil, we need to learn publications issued from 2000 through 2007. The next segmentation all toldow for explain the importance of our paper.Situation of the paperThere are many researches for the project management. Past research (Timothy Warrren, 2002) had done a research for the whole project management. It covered research published in side of meat from 1960 through 1999. This paper covered within the period of 2000 and 2007 intimate the topics of the risk management. We separated the research areas according to the labor Management Body of friendship (PMBOK). These are Risk ac familiarityment and Assessment, Risk Qualification, Risk Response evolution and Risk Control.Objectives of the paperThe objective of this paper is to learn the trend of the Risk Management in past research publication. We restricted the period to be knowing for each topic. This paper is intended to learn that how the risks emerged during the project time, is handled using which tools and methods. This paper intended to find the gaps between researches in each year and whole period of year 2000 and 2007.The paper well-read only risk management out of topics of project management for the period. So, the other topics can be learned like our paper. These are Communication, Cost, Procurement, Human Resource, Outsourcing, Integration, Quality, Scope and Time Management. publications reviewIn this era, many companies learn a great set apart of their jobs in project form. Tradition every withstand(predicate)y projects were principal(prenominal)ly found in the expression industry and sections of the military, but the competitiveness of the markets of today with fast-changing technology encourages almost each(prenominal) companies to adopt project management (Burke 2003). attend management is the application of knowledge, skill, tools and techniques to project activities to meet project requirement. objectify management is accomplished through the use of the do workes such as initiating, planning, executing, controlling, and closing (PMBOK guide 2000).Because of global economical pressures, upheaval in the corporate environment and market forces leading to the increasing demands and tougher contention projects have to be implemented at lesser time, cost and with fail operableities. This causes growing demands on the managements ability to forecast and act to unforeseeable events- risks.Risk is an abstract concept whose measurement is very knockout (Raftery, 1994). The Oxford Advanced Learners Dictionary 5th Edition defines risk as The possibility or chance of meeting danger, suffering way out or injury. The British Standard BS 4778 defines risk as A combination of the probability, or frequency, of occurrence of a defined impale and the magnitude of the consequences of the occurrence. Risk may be expressed in a mathematical form as followsRisk = (P robability of the occurrence of a defined event) x (Consequences of the occurrence of that event)Therefore, risk management is nowadays a critical factor to successful project management.Overview of Risk Management ejection risk management is the art and science of identifying, analyzing, and responding to risk throughout the life of a project and in the best interests of meeting project objectives. (Schwalbe, 2006)Risk management has been practiced informally by everyone, with or without conscious of it, since the get over of time. Modern risk management, which had become a widely accepted management function during the period from 1955-1964 (Snider, 1991) has its roots in insurance to which it has been closely reorient for more than tether centuries (Ibid). The story of risk management has not all been positive and supports the argument that it is currently ineffective at managing surprise. In the 1960s project management was under heavy criticism for project failures receivab le to technical uncertainty, contact strategy, community opposition and project environmental impacts (Morris, 1997). A project manager may still today argue that the conk two are external project factors and outside the immediate project environment under their control (Ibid) and it may be often put on that these will be passed up the line to higher management levels (Chapman Ward, 1997).The main objectives of risk management include (Yee et al., 2001)To enable decision-making to be more dogmatic and less subjective.To provide an improved understanding of the risks facing a project by identifying risks and response scenarios.To assist in deciding which risks require imperative attention and which can be addressed later.To force management to suck that there are many possible outcomes for a project, and enamour measures should be planned for any adverse consequences.Flanagan and Norman (1993) proposed a risk management framework as shown in Fig.3.1 which depicts the elements of the risk management system risk identification, risk classification, risk analysis, risk attitude and risk response.Risk IdentificationRisk ClassificationRisk AnalysisRisk ResponseRisk Attitude persona 2.1 Risk management Framework (Source Flanagan Norman, 1993)According to (PMBOK, PMI 2000) and (Schwalbe 2006), compute Risk Management has future(a) processesRisk Management PlanningRisk IdentificationQualitative Risk AnalysisQuantitative Risk AnalysisRisk Response PlanningRisk Monitoring and ControlThe following Fig.3.2 depicts how risk management processes involved in each of the project management processInitiationPlanningExecutingControllingClosingRisk IdentificationRisk IdentificationRisk Response ControlRisk QuantificationRisk Response maturationFig 2.2 Risk Management Processes in each Project Management Process (Source Dan Brandon, 2006)Risk management will not eradicate all the risks. It will enable decision to be made explicitly which will reduce the potential effec t of certain risks. It will also assist in rational, defensible decisions regarding the allocation of risk among the parties to the project.Risk analysis is not a substitute for master key judgments and experience. On the other hand, it helps professionals to make use of the full extent of their experience and knowledge by liberating them from the necessity of making simplifying assumptions in order to produce deterministic plans and forecasts. Risk analysis is supplement to, not a substitute for professional judgments.Recent Approaches to Risk ManagementProject risk management is a topic of major current interest. It is being actively addressed by many government agencies and most of the professional project management associations almost the world, and many relevant standards are extant or being developed. Some examples from the many approaches in use include (Cooper D., Grey S., Raymond G., baby carriage P., 2005)Project Management Institute (PMI), USA (2003), Project Manageme nt Body of knowledge, Chapter 11 on risk managementAssociation for Project Management, UK (1997), PRAM take aimAS/NZS 4360 (2004), Risk Management, Standards Association of AustraliaIEC 62198 (2001), Project Risk Management cover GuidelinesOffice of Government Commerce (OGC), UK (2002), Management of Risk andTreasury jump on of Canada (2001), Integrated Risk Management FrameworkWe fill the research gap in risk management field from year 2000 to 2007.MethodologyWe pass a quantitative bibliographic study on pass document published from year 2000 to 2007. We calm paper and journals from electronic selective learningbases ACM, IEEE and ProQuest. Our objective of this paper is to find the current research trend on Risk Management by analyzing and categorizing those research document.Project Risk Management ResearchIt is the process of finding what current researchers are emphasizing in. It includes defining the current whole caboodle on project management, particularly on Risk Management articles and papers. indeed make generalized conclusion ground on collected and analyse works. This conclusion or judgment is made based on project risk management processes risk management planning, risk identification, qualitative risk analysis, quantitative risk analysis, risk response planning, risk monitoring and control (PMBOK 2000, Schwalbe 2006).Sources of dataWe collected articles and papers published in years 2000 to 2007 from these databases which are known to be rich information about project management.ACM digital LibraryACM digital library includes magazines, journals, transactions, publications by affiliated placements, SIG news letters, assemblage Proceeding Series. ACM digital library provides service for mortal, universities, libraries and corporations.We find that risk management is one of the research field in many businesses and industries. ACM includes diversity of business and industrial processes which enables us to inference the future trend in disparate handle.IEEE ExploreTo support our conclusion and get strong analytical results, we also collect articles and papers from IEEE explore which has more technical articles and papers than ACM digital library. It includes 1,682,970 online documents to be referenced.ProQuestAnother supporting database which we extracted articles and papers is ProQuest. That includes ABI/INFORM databases, dissertation and theses, and so on Data analysis from that database will be icy on our research cakeData selection from the databasesWe conduct full text search in above databases using author, title, keywords based on year. Then tasks are separated among us based on years and combined later. Papers and articles are found based on the following criteria Keywords Risk Management, Risk Identification, Risk Analysis, Risk Transfer, Risk Control, Risk Response classs 2000 to 2007 create format and research data re yieldationOutput format will be as the followingResearchersTitleDatabaseRisk Ca tegoryYear commerce CategorySub CategoryMethodThe papers and articles are attached in the appendix B.We classified each paper into circumstantial risk management processes (PMBOK 2000, Schwalbe 2006). We also analyzed which business household that each paper falls into and which specific method do they use in conducting the specified risk management Process.To get the consistent taxonomy in risk management, we identified the papers and articles into the categories guided by (PMBOK 2000, Schwalbe 2006). They areRisk Management Planning This is how businesses and industries plan and handle for risk.Risk Identification This is how businesses and industries emphasize on identification of risk throughout their governmental processes.Risk Analysis This involves how organizations conduct quantitative and qualitative risk analysis based on consume and probability/impact matrixes.Risk Response Planning This shows how organizations develop risk response strategies like how to avoid, how t o have tolerance, how to mitigate risk, how to transfer risk and so forthteraRisk Monitoring and Control This involves how organizations monitor the identified risks, new risks through out the execution of the projects.Business and industrial categories are identified as follow windEducationFinanceHealthcareInsurance info Technology possibilityE-commerceE-banking net income Business reading certificate package developmentMaritimeMarketingOrganizational ProcessPure widely distributed ResearchterrorismWe also found that information technology risk management plays a great role in modern businesses and industries because of wider role of internet and web technologies.Our analyzed data will be represented in pie chart, bar chart and line chart by analyse different categories, different risk manage processes, different years etc.Data Collection and AnalysisData CollectionWe used digital databases web site ACM, IEEE and ProQuest for scholar paper and articles and the existing search engines google and yahoo. just we are not unable to get some papers from the search engines. So, we used these to get only information which papers are determined in which databases. Using information returned from the search engines, we search the desired papers in the databases. The following chart, Fig 1 shows the state of the materials found in the three sources ACM, IEEE and ProQuest.Figure 1 Distribution of papersThere are 113 papers found in those databases. We summarized the papers found in the three sources. We categorized by the papers by using PMBOK guide. We provided the Risk Analysis, Risk Assessment, Risk Control, Risk Response and Risk Identification. The following diagrams show the results.We learned that ACM database has more papers related to the risk management as in Fig 2. Other two databases have papers. provided some papers are general for risk management. So, we discarded the papers and then we collected the more specified papers which are related to the above titles. We alert the results with some charts as shown in below figures.Figure 2 Research papers found in ACM database by categoryFigure 3 Research papers found in IEEE database by categoryFigure 4 Research papers found in ProQuest database by categoryThe above figures, Fig 2, Fig 3, Fig 4 show that the papers found in the ACM, IEEE, ProQuest database are shown by categories. Risk analysis is in the main conducted by majority of researchers. It was conducted mostly in year 2005 and 2006. Risk judicial decision and risk response research areas are fewer than other risk management process areas. Research for risk response is very rare, not fairly distributed and found in certain year.Data AnalysisThe trends of the risk analysis for the year 2000-2007 are shown in graph, Fig 5. We learned that IT project management was highest in recent 7 years.Figure 5 Trends in different business and industries within year 2000-2007Information TechnologyWe learned that there are varieties o f IT projects. We categorized it as follow. computer software DevelopmentE-BankingDisasterInformation SecurityE-Commerce lucre BusinessWhen we categorized these topics, we found that some fields are ambiguous to group them. Some fields are software performance testing and fields emerged after the development phase. We sorted these fields were in the Software Development part. We assort Networking security and other Internet security fields into the Information Security part. We create a group for the Internet Banking as a E-Banking. In the Disaster group, we put the some disasters in the Disaster parts.These disasters sometime can be seen when process some tasks in IT such as software error, hardware crash, and scathe information usages. We collected the potential security risks and group them into the Information Security group. Internet Business can be confused with E-Commerce and E-Banking. We intended the Internet Business to group the fields of the some businesses which are using Internet and make transactions via internet such as Online Registration.We found that Software Development risk analysis is most famous. In 2006, Software Development trend is the more than year 2005 and 2007. But year 2007 is not ended. So we cant make any decision for that year.Figure 6 Risk management processes in different information technology fieldsInternet Business is the second thing to be learned. But Information security is down in 2006. Internet Business is coming up.ConstructionConstruction group has the fields of which are architectural fields and wrench works. We learned that in 2000 and 2001, there are some interests upon that field. In 2001, the spin field can be seen as a hottest field.EducationWe grouped the some fields in to Education group that fields are Education fields, learning methods in Education. The research related with the Education can be seen in the year 2004 only.FinanceFinance group is wide. We formed the Finance group for some fields that are Cost Estimation, Accounting, Management Accounting and Banking. The finance is most famous in 2004. In the posteriority year, trend for the finance is running down to bottom.HealthcareWe collected the data for the healthcare. But it is difficult to collect for the healthcare. We learned that in 2005, healthcare was appropriate level. But later, we cannot see it until 2007.MarketingIn 2002 and 2005, marketing was in habitue level. In 2003 and 2006, it was high up to 2. So, we learned that marketing was the regular level.OrganizationIn the organization group, we combine the Oil Field, NASA, and some other organization-oriented fields. There are some researches for the organization in every year. There are some researches in the organization group within 2002 and 2006.TerrorismTerrorism was the new emerging fields after 9/11 problem. But later, we were not available for that field later years. This group is an exception for the risk management. But it is one thing to be considere d later.MaritimeMaritime was the individual fields. We did not combine any fields to that group. This category can be seen in only 2001.InsuranceInsurance is the same as the Maritime. We learned that that group is only one field. We learned that the field was in the 2004 and 2005. But Insurance can become an interesting topic in future. superior general In General group, we combine other fields such as some theory approves and lecture views.Before conclusion section, we intended to present the findings as summary of data collection and analysis. Risk management is the sub-set of Project management. In academic field, risk management researches are becoming increasingly. According to our analysis, risk management researches related to Information Technology are highest topic of the research filed. But one of our exceptional cases is that we need to learn many research papers from many databases. We studied only three databases and 113 research papers. If we learned more papers, we ca n get more perfect result. In this paper, we categorized only 11 fields. It is general for the risk management. To get the kick downstairs result, we also need to categorize the exact fields out of many fields. We can also categorize the risk management fields more according to the PMBOK guide.Conclusion and recommendationBusiness organization and industries suffer from befogged and harm because of poor handling in risk management. They have been stable the agonizing outcomes of failure in the form of unusual delays in project completion, with cost surpassing the budgeted cost and sometimes failed to meet quality standards and functional requirements. Competition among rivals makes the companies to deliver projects in less time and cost with cave in functionality.Risk management is a predefined and structured approach for identifying and analyzing potential risks associated with a project so that effective risk treatment can be done at the lowest cost. It is not impossible to el iminate all risk and costly to overdo risk management, but it is also inexpedient to think of eliminating risk. There will be, sometimes, positive risks those will lead to profit if properly analyzed and identified.Our term paper provides an analysis on papers and articles and conduct bibliographic study by particular risk management process and business category. Risk management researches are mostly done in mission critical environments and risky projects. As internet booms, information security and e-business issues are associated with a lot of risks. We found that majority of research papers are related to information technology in last decade. Risk in credit portfolio management, supply chain, pricing and insurance fields are also researched as they are related to financial muddled and harm.Though risk management can offer significant benefits to a project in order to reduce nasty surprises and identify and act upon opportunities, it is, however, not a panacea for the problems and surprises which befall many projects and should not be seen as the silver bullet of project management (Pavyer, 2004) as murphys Law is the governing law of project management if something can go wrong, will go wrong.As we collected from three databases, in general from ACM, our result can be a little affected by other finding and papers. Results will be slightly different as we go though several databases. Even thought we titled to 2007, we intrust that other findings and papers will come out during this year. But based on our analysis, some inferences and emerging trends can be seen.RecommendationsAs pack and management are aware of the importance of risk management processes, it would be more affective and appropriate to put more emphasis on formal and or informal education and training to further upraise their awareness of risk management. Formal education could be graduate studies in financial project management, software project management and construction project ma nagement etc. Informal education and training could be in the form of career development programs or workshops within organization or organized by academic institutions or professional seminars.Each organization should have own risk management plan, risk response plan, and kind risk factors plan. Risk management team should be formed according to project managers guidelines and organizational goals. Project manager must(prenominal) aware of current risk management trends and technological trends for long term strategic planning. Researchers on risk management should cooperate and conduct on research areas which have been done less like autonomous gene systems, spacecraft systems, information security management. vermiform appendix A. ReferenceBurke, R. (2003). Product Management. Biddles Ltd, Guildford.Brandon, D. (2006) Project Management for Modern Information Systems IRM PressCooper D., Grey S., Raymond G., Walker P., (2005) Managing Risk in Large Projects and Complex Procurem ents.Chapman, R. J., and Ward, S. (1997). Project Risk Management Processes, Techniques and Insights John Wiley Sons, Chichester, UK.Flanagan, R., and Norman, G. (1993). Risk Management and Construction, Blackwell, Oxford, UK.Pavyer, E. (2004). Evaluating Project Risk. Strategic Risk Management, Auguest 2004, 24-25Project management institute (2000). A Gide to Project Management Body of Knowledge Project management institute, 6Raftery, J. (1994). Risk Analysis in Project Management, E FN SPON, London, UK.Snider, H. W. (1991). Risk Management A Retrospective View. Risk Management April, 47-54Schwalbe, K. (2006). Information Technology Project Management. Thomson Course Technology, 425Yee, C. W., Chan, P., and Hu, G. (2001). Construction Insurance and Risk Management- A Practical Guide for Construction Professionals, The Singapore Contractors Association Ltd., Singapore.Appendix B. List of papersResearchersTitleDatabaseRisk CategoryYearBusiness CategorySub CategorySteven L. Cornford , Martin S. Feather,John C. Kelly, Timothy W. Larson, Burton Sigal,James D. KiperDesign and Development AssessmentACMRisk Assessment2000ITMary SumnerEnterprise Wide Information Man