When evaluating your forecast economic equation and hence profitability in a development, always be sure to evaluate risk thoroughly.

In order to know risk you must understand all the variable parameters in your model and externalities that could compromise time, quality, cost, reputation, market etc.

A relatively straight forward risk management approach enshrined into the DNA of your operating system and culture will serve you well and could quite possibly give you one the the greatest returns on your investment from a systems perspective.

Remember, Risk = Probability x Impact

Using a risk register that is built up over time will allow you to rapidly understand risk, assess its probability and impact and establish appropriate risk mitigation measure to bring the risk level to an appropriate level.  Always measure your pre mitigation score v your post mitigation score to understand the downward risk profile.

Risk is not necessarily a bad word – quite often risk and reward sit either side of a very narrow line.  Your calibre of systems, people and accountability and assurance mechanism in your business will allow you to measure, adjust and manage the constant dynamic equation of Risk v Reward.