RISK MANAGEMENT

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Risk Management is an art in the area of Project Management and Project Manager is to be intuitive enough to identify the risks right from project inception, elaboration, construction till transition phases of project life cycle. Dependencies & Assumptions has direct impact on the risks of the projects. As priority and criticality varies from phase to phase, the skills of Risk Management too varies accordingly, hence its critical to illustrate the risk management during various phases of project life cycle

       1.       Risks Management during Inception Phase

Project Manager who has great insight only can identify the risks during the inception phase of the project. However its a good practice that all unknowns are to be considered as one of the known risks.

Consider the below scenario during the inception (during Scope Definition Phase)

Unknown - Unknown (Scope not known; Out of Scope not known) à Critical

Unknown - Known (Scope not defined; Out of Scope defined) à High Risk

Known -Unknown (Scope defined; Out of Scope Unknown) à High Risk

So considering the above, not only one SCOPE but  we need clarity on Out of Scope as well. Similar exercise needs to be done on Non-functional Requirements (NFRs) of  the projects when we define the scope of the project.

Definition for Success criteria:

Another good practice is to list out all the driver points for the success of the project. List down the criteria that ensure  project as successful. Similarly define the same for failure which needs to be reviewed periodically to ensure that project is steered in the right direction and steady path.

Roles & Responsibilities in success criteria

Define the RACI (Responsible, Accountable, Consulted, Informed) Matrix for the project organization for each of the milestones and important deliverables. These are key drivers for the success of the project

      2.       Risks Management during Elaboration Phase

During the elaboration phase, projects get more structured  and all the risk identified during inception phase should be reviewed thoroughly and redefined. Based on the clarity created during this phase, the impact of the risks stated in inception phases may reduce.

Ideally during elaboration phase, there should not be any unknowns in the scope definition which is most critical to the success  during the elaboration phase.

Few things to be noted during elaboration phases

a.       Scope definition à There should not be any unknown here any more with respect to Scope or Out of Scope

b.      Re-define the acceptance criteria à Review and re-define the RACI Matrix if required

c.       Plan (Milestones, Schedule  & Readiness on Construction phases)

• This the key deliverable of this phase in which we need to identify all the risks around the resources (People, hardware/software readiness, Knowledge readiness etc)
•  Any assumptions & Dependencies on the plan to the listed by all the respective stakeholders

     3.       Risks Management during Construction Phase

When we are clear  about the above two phases, we have already reduced the Risks/Impacts in the construction phases.  However there are few areas which we need to continuously track

•  Resource related risks (Unplanned leaves & Environment related ) which could lead to

                o   Schedule variance

                o   Quality related issues

• Scope Creep

                o   Effort Variance

• Quality KPIs (More issues reported by QA may lead to the below listed attributes)

               o   Effort Variance

               o   Schedule Variance

    4.       Risks Management during Transition Phase

At the end of the construction phase we may have less room for Risks as by then most of the acceptance criteria would have been met.  However its worthwhile to consider the

• Customer feedback
• Project Closure (Lessons learnt, Retrospection on Good & Bad experiences)

Risk Mitigation

In all above phase, communication plays key role as in some of the cases by having good frequent exchanges dispenses the risks across the stakeholders and indirectly ownership of the risk gets transferred or distributed.

It’s always a good practice to have the Risk register and log the Risks identified in every phase and respective initiated with owner’s details. This will transform as lessons learnt for futuristic projects.

Risk Management is one of the 10 knowledge areas of PMP® Training. For more details, do click http://goo.gl/MPBy1r