12 Wonderful Ways to Improve Your Risk Management
By Harry Hall
John Smith was hired as a new project manager at a leasing company, and he was assigned a small project with a team of six people. The project goal was to reduce customer billing defects by 10% before the end of the year. How well did John use risk management to accomplish his goal?
He and his team completed a project plan and identified project risks. He captured the risks in his risk register and periodically conducted risk reviews. Things were going so well that he was assigned two additional projects.
John started his new projects like the first one. However, he was overwhelmed as his project sponsors pushed him to deliver the new projects quickly. He skipped capturing his risks and conducting the risk reviews.
Slowly, John saw the project performance decline; there was greater variance between his schedule baselines and the actuals. Read the Complete Article
What Is the Silver Lining for Projects?
By Marge Tam
The proverb “For every cloud there is a silver lining” can be interpreted as for every difficult situation there is some good to it. The proverb is of said to the person that would welcome such an encouragement during trying times, and the person is unable to see any positive way forward.
In the framework of Project Management, the Project Risk Management Process brings the silver lining to the uncertainties that come with managing anything that occurs in the future. Many people tie the word ‘risk’ with the negative connotation. However, according to the PMBOK, there are both negative and positive risks. The negative risk has potential impacts downstream to the overall health of the project projects such as project slip, budget overrun, and unsatisfied customers. While positive risks are essentially opportunities that brings about return on investment, increased revenue and overall process improvements. Read the Complete Article
Contingency Usage Is a Leading Indicator of Project Trouble
By Kiron D. Bondale
Contingency reserves are funds intended to be used to offset the negative financial impacts of realized risks. On schedules, we often use the alternate term buffer but we are really referencing the same concept.
Depending on the project funding policies of a given company, project managers may have the ability to directly authorize contingency drawdowns, as they are a component of your approved cost & schedule baselines.
But just because a project manager has the authority to utilize contingency without seeking additional approvals doesn’t mean that it shouldn’t be tracked and reported separately.
While contingency is supposed to be used to reduce impacts from realized risks, it can also be used to mask scope creep or to avoid going through project change management. I realize that there is often a very fine line between the realized risk of a missed requirement and scope change, but some project managers and sponsors treat contingency like a slush fund. Read the Complete Article
12 Sure-Fire Ways to Improve Project Risk Management
By Harry Hall
If you survey people involved in projects on the importance of risk management for achieving project objectives, a high percentage of the participants will say risk management is important or very important. I’ve seen survey results where 90% of the people thought risk management was important. So…why do few people employ and support risk management?
Many people have had a bad experience. Project managers have performed risk management poorly. Let’s look at several reasons why project risk management can become useless and what we can do to gain better project results through risk management.
Read the Complete Article
- Failure to lead by example. In order for organizations to mature and benefit from risk management, leaders including sponsors and project managers must walk the talk. People resist change. Without a consistent example by those in authority, people will likely seize opportunities to revert to their former behaviors.
How to Develop a Plan to Manage IT Risks
By Harry Hall
Want to know the secret to managing IT risks?
A Risk Management Plan.
So simple as to be, well, let’s say completely useless. Because if you knew the secret to consistently managing IT risks, you’d already be doing it, right?
But instead, you continue doing what you’ve always done with a gnawing apprehension that your worst nightmare is just around the corner. You are too busy to “add risk management” to your list of things to do.
The problem is that many CIOs – even the top-tier CIOs – lack an adequate grasp of their IT risks. Even these top dogs understand that they’re one event away from losing the farm. Which risks are greatest?
- Data security breach with reputational harm
- Regulatory risks
- Social media
- Recruiting and retaining qualified IT staff
- Improper balance of outsourcing
- Cloud technologies
- Transition to agile methods
- Disaster recovery
- Outdated operating systems
- Data on user-owned mobile devices
- Third-party risks
But there is a way to give you a better chance of not only surviving, but thriving in the face of great uncertainty. Read the Complete Article
Why Avoidance Should Be 1 of Your 7 Risk Responses
By Harry Hall
Earlier I wrote about seven ways to respond to risks. One of the risk responses is avoidance. The focus of this strategy is to ensure the risk does not occur…that is, we eliminate the cause of the risk.
My Personal Story of Stupidity
It was Fall, and I had raked leaves in my back yard into three piles. I was trying to decide what to do with them. I knew there was a ban on burning in my area. We had been extremely dry for months.
What were my options? I could bag the leaves. I could carry the leaves down into the woods…or I could burn the leaves.
I thought to myself – surely I could burn the leaves. No one will ever know. Later, I would soak the areas to ensure the fires were extinguished.
Before I went to bed, I checked the three areas again…no embers, no sparks, no smoke. Read the Complete Article
Get Rid of Your Project’s Contingency
By Christian Bisson
How many times have you heard this while creating estimates? Or how many times has the thought of doing this crossed your mind?
Regardless, contingency is needed in all your estimates, and it’s important to protect it.
A Few Typical Misconceptions About Contingency
Read the Complete Article
- It’s so we can give stakeholders added value throughout the project
Contingency is often seen as this bundle of money we can use to give stakeholders some freebies as the project evolves and they make requests. Although in some circumstances it can help improve or maintain the relationship with the stakeholders if used wisely, it is still scope creep at the end of the day and can have a larger impact on your project then you think.
It adds unnecessary costs
Some people simply do not know what contingency is and think it’s added costs that could prevent a potential contract to be signed.
Common Project Manager Mistakes: #2 We Don’t Have Time for Risk Management
By Samuel T. Brown, III, PMP, Global Knowledge Course Director and Instructor
This article is part of a series. The previous article can be found here.
I was recently working with a neighbor (I’ll call him Gene) to help him plan a project at their home. They live in the country and have a small dilapidated barn that they wanted to replace with a building in which they could indulge their favorite hobby — beer making.
When we first started talking about the project, they were full of enthusiasm and planned to demolish the barn over an upcoming weekend. As we talked, I asked questions like: Are there any hazardous materials in the barn? Have you inspected the barn to make sure it will support us as we remove the roof and rafters? Is there clearance around all sides of the structure so that we can get in close enough to work properly? Read the Complete Article
What I Learned About Risk Management from a Christmas Tree
By Harry Hall
My family has a tradition of going to a Christmas tree farm, selecting a tree, bringing it home, setting it up and decorating. This year was a disaster… Here’s my story (please don’t tell anyone) and the risk mitigation strategies I learned.
Normally, we get our tree the day after Thanksgiving. Not this year. We waited until the second weekend of December to make our tree trek. My wife Sherri and I took our dog Hobson with us (our son and daughter now live out of town). There were very few trees left.
We finally found one that didn’t look like a Charlie Brown Christmas tree. The trunk looked straight, and the tree looked fine (no gaping holes if you looked from the right side). I cut the tree. The tree farm owner shook the needles out, wrapped the tree in a net, and helped me tie the tree on top of our car. Read the Complete Article
Risk Management… The What, Why, and How
By Michael Stanleigh
What Is Risk Management?
Risk Management is the process of identifying, analyzing and responding to risk factors throughout the life of a project and in the best interests of its objectives. Proper risk management implies control of possible future events and is proactive rather than reactive. For example:
An activity in a network requires that a new technology be developed. The schedule indicates six months for this activity, but the technical employees think that nine months is closer to the truth. If the project manager is proactive, the project team will develop a contingency plan right now. They will develop solutions to the problem of time before the project due date. However, if the project manager is reactive, then the team will do nothing until the problem actually occurs. The project will approach its six month deadline, many tasks will still be uncompleted and the project manager will react rapidly to the crisis, causing the team to lose valuable time. Read the Complete Article