Managing the Risk Factor - Part 2
By Brad Egeland | minute read
In Part 1 of this two-part series on managing risk factors, we began by looking at a high-level view of the risk management process by discussing risk avoidance and risk mitigation. Let's now turn our attention to some outside factors that can introduce risks to our project engagements and how we might work to handle those.
The customer is a part of the solution, but they can also be a part of the problem. Influences and issues on the customer side can throw a wrench into project progress. Risks, such as losing key customer personnel, funding issues, and slow decision-making, can cause you major project delays if not managed properly. Make sure the customer is aware of the potential risks they can cause and that they are working continuously throughout the project to help make sure that those issues do not arise and negatively affect the project.
Outside Vendor Risks
Any time you rely on outside vendors - no matter what the project is and who those vendors are - you are automatically introducing risk. There is just no avoiding risk factors there. Why? Because you can never directly control those vendors. What you can do is make them very aware of risk concerns, include them in a risk planning process, and make them go through the proper paces to identify how they'll deal with potential risks. In fact, it's a very good idea to come up with backup vendors should major problems arise.
Internal Management Risks
This may be a hard one to swallow, but we have to look at our own management infrastructure and consider the possible risks. At any given time, management can deem other competing projects to be of higher value to the organisation. This can mean the loss of key resources that other higher-priority projects might need. This can mean a funding shift leaving your project in a difficult or impossible situation of trying to deliver on a project that is basically limping along. This can also mean a work stoppage or lack of access to non-personnel resources that you were planning on getting. All of these can seriously injure your project and affect your position with your project's customer, whom you are trying to keep engaged and satisfied. This list can go on and on, and most project managers have experienced some issue on one of their projects from an internal management decision that they weren't expecting sometime during their PM career.
The bottom line is this - we can't capture and plan for all risks all of the time. It just isn't possible no matter how much time we spend planning for these annoying and damaging potential issues. However, by using best practices and making sure that the proper time and effort is put into risk definition, analysis, and management early on in the project, then we can at least be confident going forward with the knowledge that we, our project team, and our customer are somewhat prepared to avoid or mitigate risks. Additionally, we can be confident that by spending time on the risk planning process we will be better prepared to handle even those issues that arise that we never planned for, just by incorporating those best practices into our overall project management process.