Project Risk Management
How can job risk management differ from another sort of risk management? Well in many regards it does not. However, since this is a project focused activity it will help simplify the total focus by looking only at the core project fundamentals of extent - that are cost, time and quality. Bear in mind that, I will test you later!
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There are a number of superior training videos available on YouTube that cover this particular principal. I have added a few below to help bring home the point of the report. I find watching a presentation often easier to take in than reading some else's thoughts.
Project Risk Management
So what is project Risk Management is all about? In an earlier article I talk about what risk and risk management are all about. If you are still confused about exactly what risks are and what risk management is about then read this article, it should bring you to the picture. On endeavors we talk about risk as any event that could cause an unplanned change to the jobs scope - i.e. affect the job costs, deadline or quality of the deliverables, or any combo of those three.
What isn't always obvious when talking about project risk management is that we also need to think about the positive impact a risk may have on a job - i.e. reduce expenses, reduce the time line or boost the quality of deliverables. In fact it is not so often that job risks present favorable chances. Never the less, as project managers we've got a responsibility to recognize and act on such risks positive or negative. That is Project Risk Management.
David Hinde wrote a good post back in 2009 about using the Prince 2 Risk Management technique. Without getting imbedded in any Specific methodology, the general approach to project risk management should follow a similar framework and this is as good as any for the purpose of this article:
David talks by way of a Seven Step process,
Step 1: Having a Risk Management Strategy
This means setting up a process and procedure and receiving full buy-in from stake holders in how the company will handle risk management for your job.
Step 2: Risk Management Identification Techniques
Where do you start in the identification of dangers around a project? There are many risk management techniques and David suggests a few which are excellent. However, I like to take a step back and make a list of all of the critical elements of a job on the grounds of "if this task doesn't happen will it be a show stopper?" . This will help be build a prioritized list of critical activities against which I will then consider the dangers - what might go wrong to affect this task.
Here is my thought process on hazard identification outlined:
Step 3: Risk Management Early Warning Indicators
Do not rely on basic functioning of the project as an indicator that everything is going nicely. Status reports showing a steady conclusion of jobs could be hiding a potential risk.
In risk management lots of different aspects need to be about the project managers radar on daily basis. Things that I constantly search for are shipping dates from sellers - the way confirmed are that they, is there a movement in delivery dates (you will only see this if you regularly request confirmation updates from the seller), resource problems - key individuals taking sick leave or personal leave more often than usual.
Delays in getting particular approvals signed-off by the steering committee or other governance bodies - will this impact orders going out or conclusions being made on crucial tasks? Obtaining qualified folks in for inspections and certificate (new buildings by way of instance call for a lot of local regulatory reviews). These are only a few of the daily challenges a Project Manager will confront and all may be indicators of trouble to come.
As you gain more expertise in risk management you begin to automatically recognize the early warning signs and challenge the offenders sooner in the procedure. You'll also finds the a great project manager will build-in mitigation for the common project ailments at the very start, occasionally seeing the tell-tale signs when selecting vendors or suppliers will be sufficient to select better choices and that is what I call dynamic risk management on the job.
Also keep your eye on the world around you - economic or geological events elsewhere can have a dramatic effect on local suppliers and supplies of crucial project materials. For example, flooding in Thailand has impacted the delivery of different computer components that are manufactured there, causing impact in both distribution prices and lines. (Yes, I work in Asia so see this type of impact first hand. .)