Project Financial Risk Management followed in IT industry enhances the Research Paper

Project Financial Risk Management followed in IT industry enhances the success rates of Projects delivered - Research Paper Example Financial Risk Management in IT Introduction Risks management is in many ways the process of identification, assessment and prioritization of risks, which is then followed by the coordination of all economic resources necessary for the elimination or minimization, monitoring, and control of the probable impacts of uncertain events. It has been found that, risk can come from uncertainties in financial markets, legal liabilities, project failures, accidents, credit risks (Macomber 2003, p. 2). Studies indicate that, there are various project management standards, which have been under development in the project management institute, actuarial societies, ISO standards, and the national institute of standards and technology (Hodgson 2003, p.1). The approaches and objectives of hazard supervision vary greatly dependent on the hazard administration technique applied in the setting of a scheme administration.. In other studies however, hazard administration includes the ranking of the essen tial developments; hazards with the extreme loss are handled first and then the other hazard are handled in a descendent mode in order of precedence. It is pointed out that intangible management usually identifies new types of risks that have about a hundred percent probability but the management ignores because most organizations lack identification capabilities to handle such cases (King 2003, p. 2). It is recorded that relationship risk emanate when inefficient ways of collaboration is experienced. This type of hazard is known to reduce the efficiency of information workforces, effectiveness, service, excellence, product value, and excellence of earnings at the end. Thus, risk management is a subject or process that needs all manner of care to be successful. Literature review From organizational perspective, risks arise most often when businesses pursue opportunities in face of uncertainties, while being compelled by capabilities and cost. In most cases, a challenge comes when it comes to the process of finding a position based on the two dimensions, as it represents in essence itself a risk profile that may be appropriate for the initiative; acceptable to both internal and external stakeholders of the business in question. Studies affirm that, hazard and hazard administration are premeditated in nature. Regarding, information and technology studies show that, software projects have been recognized to be high-risk ventures, which are prone to many failures. Some studies argue that there are mainly two classes of risks; generic risks that are common to all projects, and project specific risks. In many cases, some of these hazards are easy to recognize and regulate or accomplish. However, in some cases, other risks are less obvious and thus very difficult to make predictions on their likelihood to occur and the impact they may cause at that time (Levine 2004, p. 32). The complication and difficulty in predictions comes because of numerous project proportions; structure, size, complexity, composition, novelty, long planning, and execution horizons. All these have a common influence on the modest of the scheme at the end; hus, any indeterminate discrepancy in this has fiscal implications. Therefore, risk management in information technology, especially software