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Figure 7.6: Daily project activity checklist

CONTROLLING PROJECT RISK

Risk control is the process of continually assessing the condition of the project and developing options to permit alternative solutions (see Figure 7.7). Project managers should take care to identify consequences that are likely to occur and any indicators of the start of the problem. The following are some suggestions for risk control:

Continually update the risk management plan. Implement risk avoidance actions. Implement risk contingency actions. Report on each risk issue.

Monitor and analyze the effectiveness.

Figure 7.7: Control issues to monitor Updating the Project Risk Log

Risk quantification involves the process of evaluating risks and determining the effect the risk will have on your project. One of the easiest ways to determine risk quantification of project risks is to multiply the potential impact (I) of the risk's occurrence with the probability (P) of it occurring. The probability of occurrence is the degree of belief that various events will occur. The potential severity of impact is the significance of the event if it happens. Once quantified, each risk needs to be prioritized by the project manager onto a risk matrix. This action ensures that efforts are focused on only the most significant ones. The formula commonly used is r = I ????????? ? Risk (%) = Impact ??????????????????? ?

I = Assign a value between (1-10) the impact it will have. P = Assign a value between (1-10) the probability of it occurring.

Once the value(s) have been determined, the project manager allocates a percentage (%) to the risk, and this then allows him or her to categorize and prioritize the identified risk. Table 7.4 gives an example of a risk and issue matrix. The risk (%) is tabled as follows:

 ID Project Area Description of Risk I P Score Solution 1 Client Need URS signed offâ€” ver 1.0 9 9 81 Begin negotiations 2 new database 7 7 49 Review change req. 3 Design Hardware spec to be finalized 6 5 30 Finalize by 10/1

The risk matrix primarily works extremely well and lets project managers proactively document and resolve all identified issues and risks made during the project life cycle. As the project continues, risks identified early on in the planning phase will be resolved and the eventuality of new ones being raised during the later phases is good. Project managers need to be prepared for risks and the difficulty and rate at which they surface. Each risk needs to be documented, irrespective of the rating it is given.

The risk matrix should form the basis of a working project document, and it needs to be formally communicated to all project stakeholders in order for these stakeholders to obtain a current perspective on the project. I once observed a project manager trying his very best to resolve project risks in total isolation, and this led to communication problems and the eventual cancellation of the project by executivesâ€”all because they could not see a visible project leader and had no assurance as to the project being in control.

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