Risk Management on Large Capital Projects

The three major processes of project risk management are risk identification, risk quantification and risk response. This paper provides guidelines for using these processes on large capital projects. Risk identification consists of determining what risks could have a positive or negative effect on the project and documenting them. Risk quantification requires that a risk evaluation procedure be established to measure potential risk. Risk response involves creating a risk management plan that allows for rapid responses to risk. The paper provides examples of various risk elements and outlines how to document, respond to and mitigate each one.