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Chrono™ Training Reference Guide

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Project Risk versus the Cost of Change.

A fundamental risk management concept to always keep in mind is the relationship between the project risk profile over the course of the project timeline and the cost of change profile over that same timeline.  Cost, in the context of this discussion could be any combination of Project Schedule, Cost or Product Quality/Technical Capability that is negatively impacted by a materialized risk (or issue).  A chart depicting this relationship is displayed in my book, “Project Risk Management: A Practical Implementation Approach,” and is taken directly out of the Project Management Book of Knowledge (PMBOK Guide®, fifth edition, p. 40), published by the Project Management Institute, Inc.  This is not a new concept, but a very important risk management fundamental – project risk is expected to decrease over time, as tasks are completed and uncertainty is eliminated – but the cost of change increases over time due to the progressive depletion of time, funds and resources available to meet overall project objectives.  My contention is that it is typically much easier to change the risk profile than the cost of change profile, thus, it should behoove the project stakeholders to implement as many proactive measures (i.e., risk responses) are feasible, to reduce uncertainty (i.e., risk) as soon as possible.  This basic strategy, if implemented in a smart way, can enable the team to ultimately “do more with less.”