Identifying and Managing Project Risk
Risks are inherent in every project, whether it be PeopleSoft ERP or Business Intelligence (BI). Risks are present before the project begins, all throughout the project and even after the project is officially closed. There is
no way there aren’t risks, nor is it advisable to minimize or ignore them, for if they are not properly managed, they will negatively impact the success of the project. Howbeit, if one were to take advantage of the fact that technology has indeed come a far way, then effective utilisation of it would deem you worthy of your resources. And since we are talking about risks, and their ramifications that can impact a company’s growth if went unchecked, it is imperative to inculcate modern solutions to get effficacious results. Human Risk Intelligence is a concept which makes use of a novelty in the tech world, known as EsRM. Read from above the advantages of enforcing this system. We all know this, right?
So how should these risks be managed?
One of the earliest activities we perform in our implementation methodology is to execute a joint risk mitigation workshop with our customers. This workshop is a facilitated event designed to identify historical project risks specific to the current customer. Our ability to sort through these risks stems from the great number of projects from our years of implementation experience.
During this risk mitigation workshop, potential risks are identified and agreed upon, the likelihood of their occurrence is calculated, the impact to the project if the risk occurs is quantified and finally an initial mitigation plan to prevent each risk from occurring is created. While we may not be able to eliminate every risk from occurring (clients get overly hung up on this), by conducting this workshop up front at the start of the project, we are able to create a mitigation plan which allows us to manage the risks. At a minimum, a key variable (risk) as it relates to project success is identified.
A simplified example of identifying and classifying these risks into a chart is below. Note that you can also assign numbers to the likelihood and impact to create an actual risk score – whichever method is preferred.
So what do we do with this risk mitigation plan once we create it? Our first recommendation is to include this within the project charter itself. The project charter will be read by the entire team and read and signed off on by the executive steering committee. It will be very important for the steering committee to understand the potential risks present in the project as well as the role it may play in mitigating those risks.
Our second recommendation is to align the risk mitigation plan with the project plan. The mitigation strategy will do the project little good if it is not proactively managed and in sync with the project plan. Risk can and does change as we move through the various phases of a project.
The third recommendation is to report on the risks to both the project team and the steering committee in regularly scheduled status reports and status meetings. If we commit to report on these risks, we will commit to properly manage them. We keep them in the spotlight.
In our next post about risk, we will discuss our Project Progress Assessment Workshop which further supports the concepts of risk identification, management and mitigation.
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MIPRO Consulting is a nationally-recognized consulting firm specializing in PeopleSoft Enterprise (particularly Enterprise Asset Management) and Business Intelligence. You’re reading MIPRO Unfiltered, its blog. If you’d like to contact MIPRO, email is a great place to start, or you can easily jump over to its main website. If you’d like to see what MIPRO offers via Twitter or Facebook, we’d love to have you.
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