Risk Analysis in Project Management by John Raftery

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Risk Analysis in Project Management by John Raftery

Postby satisfactionuk » Fri 28 Jan 2011 11:16 pm

I thought it would be useful if we all reviewed books that we have read on project management and business in general.

We all buy and read business books and some are really good and others a complete waste of money, so dont by shy let us know what you think about the books you have bought or just read. Your reviews could help others in their careers or save them time and money by avoiding the bad ones that are out there.

I have decided to do a chapter-by-chapter approach so that you have a good idea of the books contents.

This is a rather short but powerful book that looks at the soft issues surrounding risk analysis and touches on but is not heavily dependent on highbrow mathematical formulas. The book looks at the subject matter from the perspective of the civil construction and building industry and gives clear examples to support the outlined theories.

Chapter one defines risk and uncertainty in projects and goes on to look at risk exposure and attitude and how this is applied to projects. After taking a more in-depth look at risk management the author discusses the associated advantages and limitations associated with the practice.

Chapter two provides a comprehensive but concise discussion of probability. I found the discussion to be highly readable and interesting and was surprised that it was not too challenging from a mathematical perspective.

Chapter three follows this simple but very informative theme in presenting psychological aspects of forecasting such as rules of thumb and personal and reporting biases that could influence project risk management.

Chapter four looks at risk attitude and associates this to game and utility theory. He uses interesting examples such as card counting to highlight significant perspectives. I found the Allais paradox to be interesting since I have not come across it in other areas of study. He sums up the chapter nicely with a lively discussion of the practical implications of the various methods.

Chapter five is dedicated to risk exposure and the techniques of risk analysis. This chapter contained the most tables which were clear and concise and the plain English explanations put forward by the author made them easy to understand and learn.

Chapter six presented some very useful and interesting case studies that covered the usual EMV, NPV, ENPV, RTS etc. The case studies were short and to the point and adequately covered the topic under discussion.

Chapter seven provided a brief but highly useful discussion as to whether risk management software is an essential tool for project managers and whether it is worth paying a premium price for the added complexity.

The final chapter a brief discussion on the human aspect of project management and highlights key points for good project management practices.

The chapters are laid out well and follow a logical progression with clear figures and tables to support the author’s arguments.

I personally like his writing style that looks at what could have been a very dry subject from the perspective of a non-statistician and presents it in a manner that encourages the reader to delve deeper into the managerial and psychological aspects of probability and game theory and relates this to bounded rationality in management decision-making.

On the whole a very good book that is a worthy addition to any project manager’s reference library.
Kind regards

Stephan Toth

The next book review is: The Definitive Guide To Project Management by Nokes and Greenwood.

The book claims to be a complete project management guide and focuses on the Critical Chain Method.

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