Chain Goldratt, Eliyahu M. 1997  Term Paper

Thus risk management in its various guises must be present in the scope, schedule, and spending, and management of any given project. Careful management is necessary for such successful project management and for maximizing the value of our project-based efforts. Above all the management of uncertainty and risk by accepting that spending, scope, scheduling, and management in general may go awry is better than simply ignoring this possibility in today's volatile business climate.

Some of the pitfalls, as discussed in the Critical Chain, of using traditional cost accounting to manage project costs and project investments are a failure to appreciate the impact of a multi-project environment on single project success, and thus a minimization of risk. Also, total risk avoidance can result in projects of too limited a scope that does not do justice to today's business environment. A lack of task dates that are replaced by time buffers are more realistic and elastic, without allowing a project to potentially spiral out of control, in response to today's environment and an individual business' needs. There is an allowance for more speedy response times towards uncertainty, and a project need not progress perfectly for it to be accounted a success.

But critical chain-based project management is more than just adherence to the particulars of critical chain scheduling and buffer management of a project's timeline. The genesis of critical chain theory comes from the theory of constraints. This theory provides a holistic view of project management. It has a realistic and risk-focused approach not only to scheduling and control, but also demands initial planning of resources and participant behaviors, thus minimizing cross-project impacts. Critical chain basic risk management processes and outcomes, the identification and assessment of risks, response development and risk avoidance, mitigation, or acceptance, all provide needed guidance for response control in today's environment where flexibility must rule all aspects of project…