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Sunday, February 19, 2012

Risk Management – The Overlooked First Process of Project Planning - Part 4 of 6

Some examples of risks are given in this Part. The primary reference for this part is John E. Martin & Pierre-Francois Heaulme, “Risk Management: Techniques for Managing Project Risk”, AMA Handbook of Project Management, American Management Association, pp. 171-172 with additions by Charles Moone.  This is an excellent reference book for all aspects of Project Management. 

To some, it may seem odd that I would choose a book published by the AMA (American Management Association), a business management group, as a reference for this Blog.  The reason is that while there are excellent references on the PMI site, we should always look for other sources in order to broaden our knowledge of factors affecting how we work.  After all, projects are pursued to achieve business goals and our profession contains the word Management.

Note that portions of the list may not apply to the current situation; however, the list should be presented as examples of looking at the overall environment that affects projects:
·        “Business Environment
o   Multi-National subsidiaries are involved.
o   Organizational restructuring or the departure of a project champion
o   Project has not been budgeted
o   Project funds have not been allocated
o   Project has not been justified
o   Senior executives have not endorsed project
o   Project is critical to the business
o   Plan for Organizational Change has not been developed and implemented.
o   Jurisdictional disputes between business entities.
o   Business Case with defined impacts, costs, and benefits has not been accepted by affected communities.
·        Political Environment
o   Formation of a new government
o   Jurisdictional disputes between states, provinces, or countries
o   Regulation and taxation changes
·        Project Environment
o   Project objectives are not clear, or have not been identified
o   Project scope is incomplete or is not defined in detail
o   Scope includes performance requirements
o   Estimates and costs have not been validated
o   The completion criteria are not well understood
o   Project has a fixed completion date with no contingencies
o   There are project team health and safety issues associated with performance of the project
·        The Customer
o   Competitors introduce a superior product
o   Management restructuring causes change in strategy
o   Customer does not understand a project environment
o   Customer does not have the ability and authority to make decisions
o   Customer staff will not be involved in the project
o   Customer does not have prior experience with projects like this
o   The customer is not a stakeholder in the project
·        The End User
o   End User was not involved in development of the Business Case.
o   End user was not involved in generation and approval of requirements
o   End user will not be involved in project
o   End user does not understand the impact of changes that project will bring
o   End user does not have prior experience with projects like this
o   End user does not understand a project environment
o   End user is not a stakeholder in the project
·        The Technical Solution
o   Architecture is unstable or inadequate
o   Solution is not known; i.e., has not been done before
o   Development will use unproven methods, tools, or techniques
o   User interfaces are not intuitive (user-friendly)
o   Users have not been trained in use of the interface
·        Subcontractors and Other People Resources (Sub-contractors may be employed by the client on projects that have an impact on the project or program under discussion)
o   Project will use subcontractors
o   Subcontractors have a major role on the project
o   Subcontractor is not known in the industry
o   Subcontractor has not done projects for the company before
o   Subcontractor is not financially stable, or financial base is unknown
o   Staff will not have the required skills
o   Staff with required skills are generally not available in the labor market
o   Strikes and work stoppages are a factor
·        Quality
o   Quality requirements have not been documented
o   Quality requirements are not understood
o   There is not a quality assurance function that will monitor the project
·        Project Management
o   Project Champion or Sponsor retires
o   An experienced project manager has not been assigned to the project
o   Assigned project manager has no experience with a project of this scope and size
o   A formal project management methodology will not be used
o   Project management will be handled solely by the subcontractor or general contractor
·        Contracts and Legal Issues
o   Dispute over ownership of licenses
o   There are warranties or guarantees associated with this project
o   There are performance penalties associated with this project
Part 5 describes the Risk Workshop.  See you then.

1 comment:

  1. To manage the risk successfully one should have scum in their projects .With high competition, companies have to develop products faster and innovatively always adding value and greater customer satisfaction. In Scrum, it is important to learn agile through one of the at Agile Training Providers and practice its basic principles which collectively and naturally help in the effective management of risk. As a project manager I follow a SBOK guide from