Project selection should be done in a manner that address external risk before the project commences. Consequently the personnel selecting the project should also understand the deferral risk before making the decision of deferring the project. In many projects of organizations, they neither simply avoids risk since if it is not properly managed can result to a great loss. However taking risk is a necessary condition in creation of wealth. Most projects take risks deliberately especially when it is their advantage.
Risk can affect a project negatively if the selection of the project can not manage, understand, and price it. Before selecting project, there is need to recognize, accept and understand the risks involved that can lead to the project failure or have little potential of going up. When risks evaluation is poorly done, it can lead to unrecognized and high risk projects that have potential of endangering the whole enterprise. Selecting a project wisely can lead to taking advantage of low risk and thus benefiting much from the project.
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Most projects usually fail because of lack of consideration of important risk factors that can ruin the project. A good model of selecting a project is supposed to be put in place so as to avoid frustrations in the project when things turn out to be worse. Every thing proposed in a project may be implemented as well as people put more efforts in the project but at the end the project fail if the selection did not take into account the risks that may be involved in it. Senior officials may make their decisions but if they do not understand the risk which may be involved, the project may not be able to do better.
In order to reduce loss after selecting a project, there is need to have knowledge of the project so as to make a sound plan and also understand on the right or appropriate technology that should be used in the project. Before selecting the project you have to understand on the problems that may encounter it and also there is a need to first discover what you do not know about the project to reduce the risk of failure. Risk can be reduced by identifying it and understanding on the specific impact that can affect the project so as to take action and address the risk.
If the risk has been understood and identified, ideas should be generated to modify the plan of project to reduce the risk. Furthermore, identifying risk of the project can be useful in reducing risk for any similar project that may be conducted in future. In order to reduce risk in selecting a project the process of selecting the project should be reputable in that the project proposal needs to be clear with high level statement in the scope, objective and expected success measure.
The project should have estimate of high level and magnitude needed in the implementation of the project and there should be discussion of the alternative risks and approaches in each approach. The process of selecting the project must also be cross-functional in that senior representatives must be part of it in the selection. It further has to be multidimensional by recognizing the set of the viable project. The selection process also must also recognize that there is no single or obvious metrics based on better results in picking any one project to operate and this can prevent the optimistic approach.
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Project Selection and Risks. (2016, Jul 05). Retrieved from https://phdessay.com/project-selection-and-risks/