Reasonable sized (considering resource, cost, duration) projects have elements of risk, complexity associated with them. Given the way business ecosystems are changing, the challenges to deliver projects have become multi-dimensional. It is not rare to see that project delivery timelines are missed, the goals are not achieved through the agreed delivery in terms of triangular constraints of cost, timeline and quality. A lot of these deviations are attributed to the risks associated with the projects and inability of organizations to properly manage these risks.
Before we jump on to the main topic, let's talk about basics of project risk management and related challenges. Of course, project risk management is not a new phenomenon and practicing project managers knows the importance of risk management. Yet the risk management as a domain or as a practice is evolving and many project managers have limited understanding of risk management.
Well in other post, we looked at risk management and it mentioned that there are four basic steps for risk management:
involves risk identification, establishing context for the risk analysis, knowing reasons and organization's processes of highlighting risks.
looks at two aspects of risk (1) risk probability and (2) risk impact. These aspects combined together gives estimate of Risk Exposure as follows:
Here we have to understand that estimating the probability of risk is not easy like step-1-2-3 kind of task and moreover it can hardly be cent percent accurate. Why? Because if the risk can be estimated to such highest accuracy, then hardly it is a risk.
Yet companies are using techniques to use qualitative information and have mathematical models to estimate quantitative probability. Many organizations user Barry Boehm's list of risk item to help its project manager in analyzing risks. Though these risks items are in the context of software projects, nonetheless it will be useful to look at it.
Yet there are other such risk importance checklist/item list developed by other researchers. One can check risk management document for further reference.
The project risks identified in software kind of project from the paper 'Proceedings of the International MultiConference of Engineers and Computer Scientists 2011 Vol I' further identifies following risk items
Looking at the research paper and the list of risk items mentioned thereof, one would know that the list is not limited and it keeps evolving. Hence it is imperative for project managers and in turn companies to review risk analysis, risk control and risk response methodologies over the time.
There are certain ways that will help you to evolve your risk management processes considering existing and newly identified risk items. It is greatly influenced by the project management methodology, risk management processes, change management processes on one hadn and on the other hand easy identification and highlighting of risks, accessing historic information about risk & risk analysis.
There would be certain project management methodology and risk management processes adopted and practiced by organization. These can be improved, supplemented by right risk management tool. A right risk management tool will facilitate the second part of the risk management process as mentioned above.
This is a crucial step that lets you decide how are you doing to response to a given risk (be negative or positive aka opportunity). Project manager can decide to accept the risk, mitigate it, contingent, transfer or avoid.
Now let's see So why do organizations need online risk management software like ZilicusPM.
If one has to holistically manage projects, he certainly need to consider risk management such that