Risk Management on Projects

Project Risk Management

How can project risk management differ from any other type of risk management? Well in most regards it doesn't. However, as it is a project focused activity it will help simplify the total focus by looking only at the center project fundamentals of scope - which are price, time and quality. Bear in mind that, I will test you afterwards!
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There are a number of superior training videos available on YouTube that pay this particular principal. I have added a few below to help bring home the point of the report. I find watching a presentation frequently easier to take in than reading some else's thoughts.

Project Risk Management

So what's project Risk Management is all about? In an earlier article I talk about what danger and risk management are about. If you're still confused about what dangers are and what risk management is about then read this guide, it must bring you into the picture. On endeavors we discuss danger as any event that could cause an unplanned change to the jobs scope - i.e. impact the job costs, deadline or quality of the deliverables, or some other combination of those three.

What isn't always evident when speaking about project risk management is that we also ought to think about the positive effect a risk may have on a project - i.e. reduce costs, decrease the time line or increase the quality of deliverables. In reality it's not so often that job risks present positive chances. Never the less, as project managers we've got a duty to recognize and act on such risks positive or negative. That is Project Risk Management.

David Hinde wrote a good article back in 2009 about using the Prince 2 Risk Management technique. Without becoming imbedded in any particular methodology, the overall approach to project risk management must follow a similar frame and this is as good as any for the purpose of this article:

David talks by way of a Seven Step process,

Measure 1: Having a Risk Management Strategy

This usually means setting up a process and procedure and receiving full buy-in from stake holders in how the organization will handle risk management for your project.

Step 2: Risk Management Identification Techniques

Where do you begin in the identification of risks around a job? There are lots of risk management techniques and David indicates a few that are excellent. However, I like to take a step back and make a list of all the critical elements of a job on the basis of "if this task doesn't happen will it be a show stopper?" . This will help be build a prioritized list of critical tasks where I will then think about the dangers - what could go wrong to impact this task.

Here's my thought process on hazard identification summarized:

• List out crucial deliverables


• List outside, against each deliverable, determined tasks


• List out against all dependent tasks and critical deliverables "any" possible event that may delay or block the delivery to plan.


• Grab a template hazard analysis matrix and fill out the first pass of evaluation - probability v effect for every risk.


• Take it to a project meeting and use it as the baseline for brainstorming.

Step 3: Risk Management Early Warning Indicators

Don't rely on basic performance of the job as a sign that what is going well. Status reports showing a steady conclusion of tasks could be hiding a potential risk.

In risk management lots of different aspects will need to be on the project managers radar on daily basis. Things that I always search for are shipping dates from sellers - the way confirmed are that they, is there a movement in delivery dates (you will only see this if you regularly ask for confirmation updates from the seller), resource issues - key individuals taking sick leave or personal leave more frequently than normal.

Delays in getting certain approvals signed-off by the steering committee or other governance bodies - will this impact orders going out or conclusions being made on crucial tasks? Obtaining qualified folks in for inspections and certificate (new buildings for instance call for a lot of local regulatory inspections). These are just a few of the daily challenges a Project Manager will confront and all may be indicators of difficulty to come.

As you gain more expertise in hazard management you begin to instinctively recognize the early warning signs and challenge the offenders earlier in the procedure. You will also finds that the a good project manager will build-in mitigation for the frequent project ailments in the very start, sometimes viewing the tell-tale signs when selecting vendors or suppliers will be enough to select improved choices and that is what I call dynamic risk management on the job.

Also keep your eye on the world around you - economic or geological events elsewhere may have a dramatic impact on local providers and supplies of key project materials. By way of instance, flooding in Thailand has impacted the delivery of various computer components that are manufactured there, causing effect in both distribution prices and lines. (Yes, I work in Asia so see this type of impact firsthand. .)

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