Integration of Project Risk Management (PRM) into Enterprise Risk Management (ERM)

Abstract

Integrating Project Risk Management (PRM) into Enterprise Risk Management (ERM) is a multi-year journey and has long term value. ERM provides a holistic view to existing risks and overcomes the disadvantage of risk being managed in silos in PRM. The main aim of integration of two approaches is to mange risk from both macro and micro perspectives by exploiting opportunities while balancing the downside of risk. The chapter provides a fundamental understanding of what ERM is and its components and shows how PRM is a subset of ERM. Issues and opportunities in integrating PRM into ERM are discussed using real life examples. Furthermore, the chapter brings attention to formal and informal ways of integration and concludes by making six recommendations.