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Project Management Risk
A simple way to avoid confusing project management uncertainty vs risk is to recognize that risk primarily deals with future events that can be foreseen and their probabilities calculated while uncertainty deals with the present.
The fundamentals of project risk management consist of three important activities: identifying risks, assessing the severity of threats, and responding appropriately in ways that prevent risks from derailing the project. Because of the significance of risk, every project manager must have a risk management plan in place that will preserve the project from internal and external threats.
The collection of data concerning risk may vary depending on the nature and scope of a project, so addressing risk in the planning stage is essential to achieving desirable outcomes.
Image Credit: Wikimedia Commons/Marine Institute
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Although they present grave threats to the project as do risks, uncertainties - unlike project risks - stem from factors that cannot be anticipated or measured. Uncertainties are introduced into project management when some present factors are not properly understood and therefore are not as easily prepared to be dealt with by team members.
Project managers are cautioned to guard against preoccupation with performing risk assessments because uncertainties are equally important. A statement of uncertainties along with a statement of risks must be included in the project plan to keep stakeholders properly informed.
Some examples of uncertainties include (but are not limited to) unforeseen tasks, unexpected resource requirements, and faulty allocations of time. These factors affect the project in the present and - if not rapidly and effectively addressed - can derail the project before any of the assessed risks come into play.
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Project Management Uncertainty vs Risk
There are some in the project management community that seek to combine risks and uncertainties together in preparation for factors that can affect the project in both positive and negative ways. After all, it is conceivable that both known and unknown factors could affect a project in a positive way.
Such a unified approach may help project managers deal with relevant factors in a more circumspect manner. Practical experience, however, seems to suggest that negatively affecting the project are most common, meaning that project managers are likely applying their time most appropriately by preparing for them.
Furthermore, by understanding project management uncertainty vs risk, managers can deliberately seek to address both. By gathering as much information as possible about the project and its environment, uncertainty can be minimized while a thorough consideration of the threats that lie ahead can result in adequate preparation.
Risks and uncertainties both threaten the project, and a careful approach to both can maximize the chances for success.