The effects of risk management on the success of a project

M.Ing.In all companies, there exists many opportunities. With these opportunities comes benefits as well as uncertainties and therefore risks. To expedite these opportunities, it is crucial that the expected monetary value associated with the gain of the opportunity exceeds the expected monetary value associated with the loss due to the risk impact. It is therefore imperative that all projects with associated risks be carefully identified and assessed, with mitigation steps to reduce or eliminate the impact of the risks, if possible. The management of identifying, assessing and mitigating risks with mitigation and contingent plans or allowances, is known as risk management. Risk management identifies strategies and the relevant stakeholders to best handle risks by seeking innovative but practical solutions, based on experience and sound judgements. Risk management forms a vital part of project management since risk is present throughout the life cycle of any project. Risks are present in all project management functions. These risks arise due to changes in scope also known as scope creep, unrealistic cost or time estimation and factors influencing quality, etc. It is believed that risk management is an influencing factor that determines the success of a project. According to the literature review, the success of a project is defined according to a time - budget - performance model, where the project is regarded as successful if it is completed within the projected timeline and budget and meets all the quality requirements. This research paper explored the definition of project success at Sasol1 in Secunda and the influence of risk management on the success of a project. A questionnaire 1 Sasol in Secunda, will from hereon be defined as and referred to as the organization survey was distributed to selected persons using email at the organisation to investigate their opinions towards risk management. From the findings of the study, it was found that this research study is fitting to the theoretical belief that effective risk management is an important influencing factor on the success of a project and that a successful project is defined as a project completed within the projected schedule and budget and meets all requirements. It was also an objective to determine which of the project management functions should be focussed on to improve project success at the organisation. The project management functions believed to have most risk attached to it, was further compared to the actual project management functions with most risks attached to it during the actual project execution. This has proven to be an opportunity to optimise on which project management functions should be the focus areas, by comparing the belief, to the factors that actually have major risk impacts. The risk management process at the organisation was further investigated to ensure that it was the most efficient risk management process. Following the research, it can be concluded that the risk management model at the organisation is the most optimised model in accordance with that of literature. The scope of this dissertation includes risk classification, the process of risk management, risk management techniques based on theory and an investigation into a case study. This theoretical understanding is then compared to the actual research findings based on the questionnaire conducted, on the effects of risk management and its effects on the success of a project