Project Management Maturity by Industry Group and Knowledge Area KEY: 1= LOWEST MATURITY RATING, 5= HIGHEST MATURITY RATING KNOWLEDGE AREA ENGINEERING/ TELECOMMUNICATIONs INFORMATION HI-TECH CONSTRUCTION SYSTEMS MANUFACTURING Scope 3.52 3.45 3.25 3.37 Time 3.55 3.41 3.03 3.50 Cost 3.74 3.22 3.20 3.97 Quality 2.91 3.22 2.88 3,26 Human Resources 3.18 3.20 2.93 3.18 Communications 3.53 3.53 3.21 3.48 Risk 2.93 2.87 2.75 2.76 Procurement 3.33 3.01 2.91 3.33 Ibbs, C. william and Young Hoon Kwak. Assessing Project Management Maturity, Project Management Journal (March 2000) 2021/2/21 IP
2021/2/21 6 Project Management Maturity by Industry Group and Knowledge Area
What is Risk? a dictionary definition of risk is the possibility of loss or injur Project risk involves understanding potential problems that might occur on the project and how they might impede project success Risk management is like a form of insurance it is an investment 2021/2/21 IP
2021/2/21 7 What is Risk? ◼ A dictionary definition of risk is “the possibility of loss or injury” ◼ Project risk involves understanding potential problems that might occur on the project and how they might impede project success ◼ Risk management is like a form of insurance; it is an investment
Why Take Risks? Because of Opportunities Try to balance risks and opportunities Risks Opportunities 2021/2/21 s△|P
2021/2/21 8 Why Take Risks? Because of Opportunities! Risks Opportunities Try to balance risks and opportunities
Risk Utility a Risk utility or risk tolerance is the amount of satisfaction or pleasure received from a potential payoff Utility rises at a decreasing rate for a person who is risk-averse Those who are risk-seeking have a higher tolerance for risk and their satisfaction increases when more payoff is at stake The risk neutral approach achieves a balance between risk and payoff 2021/2/21 △|P
2021/2/21 9 Risk Utility ◼ Risk utility or risk tolerance is the amount of satisfaction or pleasure received from a potential payoff ◼ Utility rises at a decreasing rate for a person who is risk-averse ◼ Those who are risk-seeking have a higher tolerance for risk and their satisfaction increases when more payoff is at stake ◼ The risk neutral approach achieves a balance between risk and payoff
Risk Utility Function and Risk Preference Risk-Averse Risk-Neutral Risk-Seeking utility utility utility potential payoff potential payoff potential payoff 2021/2/21 sOAP
2021/2/21 10 Risk Utility Function and Risk Preference