Project Risk and Procurement Management

It is impossible to mention the phrase ‘project management’ without introducing the concept of risk management. As Hillson (2016, p.11) states, “risks [are] particularly relevant to projects” suggesting that effective management of risk is an integral ingredient for project success. The close link that exists between projects and risks may be deduced by the definition of the word ‘project’. In simple terms, projects refer to unique endeavors undertaken with the aim of achieving desired outcomes. These endeavors typically have specific start and completion dates, and involve resource, time and cost constraints. These characteristics imply that projects are intended to deliver identifiable benefits to the organization; these benefits, however, are not enjoyed immediately even if the project is completed.On the contrary, projects commonly create capabilities that call for operation or utilization for the actual gains to be generated (Hillson, 2016 p.11). The interpretation of this is that projects have a risk element in that they contain a potential reward and possibility of loss. For this reason, project managers must be well-versed in risk management