Steps in effective risk management it may be sufficient to determine a "sense of riskiness", so some equally high-level mitigating action may be identified or an amount of contingency set aside.
These questions help not so much to identify specific risks but to establish the inherent riskiness in a project:
e Impact on business as usual
- How long is the benefits realisation phase likely to last?
- Will the project significantly affect the organisation's business-as-usual commitments, especially sales and operations?
- Are any working practices expected to change as a result of the project?
- Will roles and responsibilities change? e Stability of requirements
- What is the current burden of change within this business area?
- What history is there of changing requirements in this business area?
- Is this business area subject to external regulation? e Governance
- Will a systemised approach to the management of the project be applied?
- Will a systemised approach to the development of any it components be applied?
- Will structured requirements-gathering and closure procedures be applied?
- How agreeable are senior executives to this project?
- How dependable is the relationship between the developers and customers?
- How long have those involved in the project worked for the organisation?
- How well is the business understood by those working on the project?
- What level of technical competence exists in the project team? e Novelty
- How new are any technological components of the project?
- Has anything like this project been undertaken before? e Complexity and size
- How many customers or users are involved in the project?
- How many suppliers will be needed?
- How many interdependencies will there be between this project and any others?
- How complex a technological change does this project represent?
- How long is the project likely to take?
As more becomes known about the project, the level at which risks are identified and articulated should become more detailed.
One or two people may have to create a high-level examination of a project's risk, but it is sensible to consult more widely when developing a more detailed risk register. This helps to make sure that specific risks are identified and are considered from an appropriate range of perspectives.
This calls for a risk workshop involving people from all parts of the project. No one should be excluded as the objective is to turn "unknown unknowns" into "known unknowns". Participants should be given a clear introduction and background from the project's sponsor. The project manager usually sets up the session, but if the project manager wishes to take part, an external, impartial organiser should be used.
The project manager should provide any relevant documents, including project management documents and reports on lessons learned from previous projects. It is helpful to highlight areas in which risks may be identified, such as:
e funding; e timing;
e scope of requirements; e customer expectations; e supplier capabilities; e roles and responsibilities; e technology; e methods; e politics.
Participants write down as many risks as they think relevant on "reminder" notes. It is also helpful if they describe a mitigation, but this can be included later.
The way in which detailed risks are articulated matters a great deal. This note is neither helpful nor illuminating:
Risk: No resources Mitigation: Tell management
A risk should be articulated as a combination of cause and effect like this:
Risk: Key people from the legal team will be unavailable during the summer due to their engagement in other projects ... resulting in an inability to make critical purchase decisions. Mitigation: Secure the services of an external legal representative. Obtain portfolio management team authority to use legal team in precedence over other projects during the summer.
The underlined sentence shows the cause and its effect.
Many such notes should be produced during the risk workshop. When participants have had time to identify and articulate as many risks as they can, it should be possible to qualify them.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.