Managing and Modelling Project Risk Dynamics A System Dynamics-based Framework

The fast changing environment and the complexity of projects has increased risk exposure. The PMBOK proposes a structured risk management process, integrated within the overall project management framework. However, unresolved difficulties call for further developments in the field. In projects, risks take place within a complex web of numerous interconnected causes and effects, which generate closed chains of feedback. Project risk dynamics are difficult to understand and control, and not all types of tools and techniques are appropriate to address their systemic nature. System Dynamics (SD), as a proven approach to project management, provides this alternative view. A methodology to integrate the use of SD within the established project management process has been proposed by the author. In this paper, this is further extended to integrate the use of SD modelling within the PMBOK risk management process, providing a useful framework for managing project risk dynamics.