A Lesson in Risk Management: 7 Steps to Properly Managing Project Risk

The benefits of risk management in projects can be substantial. Properly managing risk in a project can help project managers minimize the impact of project threats, thus allowing them to deliver projects on time, on budget and with the quality results demanded by project sponsors. The 7 steps below provide a good framework for effectively managing project risk.

Step 1- Outlining Objectives

Outlining objectives is a key step because it sets the foundation for all risk management exercises on a project. It is crucial that project goals are recorded and comprehended by all team members. This includes identifying project necessities and creating an understanding of the achievement criteria for the project. Requirements must be reviewed and tested early on to guarantee they are practical and understood by all team members. Base assumptions associated with the project and key project tenets should also be evaluated.

Step 2 – Risk Management Plan

The motive behind the Risk Management Plan (RMP) is to formalize the risk management process for a project. The RMP is a report that maintains the definition of the selected risk management methodology. It incorporates the goals of the risk process; the organization, roles and obligations of team members; the tools and strategies to be actualized; deliverables; review and reporting cycle.

Step 3 – Identification

The identification of project risks is accomplished using an assortment of methods including conceptualizing, questioning, fishbone outlines, and brain mapping. It should be comprehensive with identified risks being given names that are meaningful to everyone involved. It is difficult to evade all risks on any given project- however, the key goal of comprehensive risk identification is to ensure that risks are known and not a surprise.

Step 4 – Evaluation

Risks must be evaluated objectively so that they can be prioritized and managed effectively. Evaluation techniques include:

Qualitative evaluation – provides a detailed result and enables the relative positioning of risk issues. This is material to projects of any size.

Quantitative appraisal – gives a scientific depiction of risk and produces a numerical consequence (risk estimate). Quantitative appraisal is embraced to address issues that merit a thorough investigation.

Step 5 – Planning

Once risks have been identified, it is critical to develop appropriate mitigation strategies. Risks should be assigned to team members best positioned to manage the issue.  Each person must then prepare an action plan with commitments and milestone dates.

Step 6 – Management

Risk mitigation plans must be continually audited throughout the life of the project. This audit includes ongoing analysis of the current risk profile as well as identification of a best plan B.

Step 7 – Feedback

Constructive feedback is an important vehicle for learning from successes and defeats. Throughout the project, this feedback helps with constant re-assessment of the circumstances concerning risk and enables the team to react to guarantee an effective result. Throughout the life of numerous projects, feedback permits organizations to consistently enhance their execution, their arranging and evaluating, and the risk management process itself.

The Litcom approach

Litcom provides project management expertise and skilled resources to assist our clients in a variety of project management capacities including:

Rescuing troubled projects

Often projects ‘come off the rails’ for many reasons and it takes a seasoned, skilled Project Managers to bring things back on track. Our seasoned Project Managers have deep knowledge of process and business to accompany their technical expertise.  They are skilled at finding problems and bottlenecks and implementing solutions. We have the right people with the know-how and experience to take the appropriate steps and to make the right adjustments to put a project moving in the right direction.

Coordinating multi-vendor implementations

Complex projects, with several vendors (software, hardware, implementation, etc.), can become unwieldy to manage, especially for unseasoned project managers. Litcom’s project managers are deeply aware of the challenges balancing the agendas of many groups including the client’s management group, the project team and the vendors.  Each of our project managers have many years of experience and have the right balance of expertise and temperament to ensure successfully delivery.

Establishing and launching PMOs

For organizations looking to take their planning and management of IT-related projects to the next level, a PMO is a critical piece of the puzzle.  Litcom’s project management team has the depth of experience and has been involved in numerous strategic projects where the establishment and operation of a well-running Program Management Office is the linchpin for the success of the IT function.

Contact Litcom for additional information: info@litcom.ca.