Recognizing risk factors

A risk factor is a situation that may give rise to one or more project risks. A risk factor itself doesn't cause you to miss a product, schedule, or resource target. However, it increases the likelihood that you'll miss one.

The fact that you and your organization haven't undertaken projects similar to the present one is a risk factor. Because you have no prior experience, you may overlook activities you need to perform or you may underestimate the time and resources to perform them. Having no prior experience doesn't guarantee you'll have these problems. However, it increases the chance that you'll have a problem.

Start to manage risks at the outset of your project and continue throughout its performance. At each point during your project, identify risks by recognizing your project's risk factors. Your plan and your current project phase can both suggest risk factors.

All projects progress through the following five phases:

1 Conceive: An idea is born. 1 Define: A plan develops. 1 Start: A team forms. 1 Perform: The team does the work. 1 Close: The project ends.

(See Chapter 1 for a detailed discussion of these phases.)

Table 8-1 illustrates risk factors related to managing your project through these phases.

Table 8-1 Possible Risk Factors during Your Project's Evolution

Life-Cycle Phase

Possible Risk Factors

All

Insufficient time on one or more phases

Key information not in writing

Move to a subsequent phase without completing one or

more of the earlier phases

Conceive

Some background information and plans not in writing

No formal cost-benefit analysis

No formal feasibility study

Unknown originator of project idea

Define

Plan prepared by people unfamiliar with similar projects

Plan not in writing

Missing parts to the plan

All or some aspects of plan not approved by all key

audiences

Start

Plan not prepared by people on the project team

Plan not reviewed or questioned by team members who

didn't participate in its development

No effort to establish team identity and focus

No team procedures to resolve conflicts, reach deci

sions, or maintain communication

Life-Cycle Phase

Possible Risk Factors

Perform

Change of primary client's needs

Incomplete or incorrect information regarding schedule

performance and resource expenditures

Inconsistent project-progress reporting

Reassignment of one or more key project-supporters

Replacement of team members

Change of marketplace characteristics or demands

Changes handled informally, with no consistent analysis

of their effect on the overall project

Close

Project results not formally approved by one or more

project drivers

Workers assigned to new projects before completion of

this project

Table 8-2 depicts risk factors that different parts of your project plan may

suggest.

Table 8-2

Possible Risk Factors

Planning Information

Possible Risk Factors

Project audiences

New client

Prior problems with your client

Only mild interest in your project by upper manage

ment or other key drivers (see Chapter 3 for a defini

tion and discussion of project drivers and supporters)

No project champion

Unidentified project audiences

Project background

Project derived from a spontaneous decision, not a

well-thought-out assessment

No conclusive proof that your project can eliminate

the problem it addresses

Your project's beginning preceded by other, completed

activities

(continued)

Table 8-2 (continued)

Planning Information

Possible Risk Factors

Project scope

Unusually large project

Variety of skills and knowledge required

Different organizational units involved

Project strategy

No declared strategy

New, untested technology or approach

Project objectives

Missing objective(s)

Unclear or missing performance measures

Difficult-to-quantify performance measures

Missing performance targets or specifications

Constraints

No identified constraints

Vague constraints

In general, risk factors in all constraints

Assumptions

Vague assumptions

Risk factors in all assumptions

Work packages

Insufficiently detailed work packages

Work package descriptions not developed by some or

all team members

Roles and responsibilities

Roles and responsibilities not developed by all

supporters

Overdependence on one or more people

No primary responsibility for one or more activities

Two or more people with primary responsibility for

same activity

No one person with overall responsibility for project

Schedule (activity-duration

Time estimates backed into from an established

estimates)

end-date

No historical database of performance times

New procedures or technologies for part of project

Activities performed by team members unfamiliar

to you

Planning Information

Possible Risk Factors

Schedule (activity

Interdependencies not specifically considered during

interdependencies)

schedule development

Partially related activities scheduled simultaneously

to save time

No formal analytical approach to assess effect of

interdependencies on schedule

Personnel

No estimates for actual work effort to perform

activities

No formal consideration of availability and efficiency

No planned work schedules for people working simul

taneously on two or more tasks

New or inexperienced team members

Other resources

No plans to identify the type, amount, or timing of nec

essary nonpersonnel resources

Funds No project budget

Funds No project budget

,PLE

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Project Management Made Easy

Project Management Made Easy

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.

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