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Common Project Manager Mistakes: #2 We Don’t Have Time for Risk Management

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

Risk Management… The What, Why, and How

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

10 Habits of Highly Effective Project Managers

10 Habits of Highly Effective Project Managers
By Harry Hall

“Risk comes from not knowing what you are doing.” – Warren Buffet

Just because you’ve been a project manager since the days of “Gilligan’s Island” is no guarantee that you are getting better.

As a matter of fact, you may be stumbling about trying to get off your island. Even the Skipper and the Professor can’t seem to help…encouraging…huh?

I have audited many projects through the years. Without exception, the projects in troubled waters have one common factor – a lack of basic risk management.

Why do project managers resist risk management? Don’t have time. That’s like saying you don’t have time to sleep.

Tried it but no one seemed to buy in? It’s time to apply risk management in a way that demonstrates the value.

Here are ten ways to improve your project risk management and improve your chance for success. Read the Complete Article

How to Audit Project Risk Management

How to Audit Project Risk Management
By Harry Hall

Are your project managers consistently meeting the objectives set by your management team? How do you know if your project managers are following the appropriate project processes?

A few months ago, I conducted a Project Risk Management Workshop for a PMI Chapter. I recently received an email from a class participant inquiring about how to audit the project risk management processes.

I scheduled a conference call with three of the organization’s team members. These team members worked within a Project Management Office that was less than three years old. The PMO had implemented project risk management approximately one year ago.

Assumptions

An audit provides management assurance that their objectives are being met using efficient and effective processes. Therefore, there is an assumption that processes have been established. That is to say, the project managers have been taught the project risk management processes such as:

  1. Planning for Risk Management
  2. Identifying Risks

  3. Evaluating Risks

  4. Responding to Risks

  5. Controlling Risks.

Read the Complete Article

The Cone of Uncertainty – The Basics

The Cone of Uncertainty – The Basics
By Michelle Symonds

The Cone of Uncertainty is a well known theory which was developed by Mr Barry Boehm in the early 1980’s. This concept was introduced in the book titled Software Engineering Economics.

The Cone of Uncertainty relates to the aspects of uncertainty within project management and how they evolve throughout the process. Often when a project is in its infancy, it is impossible to accurately predict how the work will progress, estimations cannot be precisely predicted and so the project is subject to uncertainty. As the project develops, research is undertaken in various areas and more details can be obtained allowing those involved to gain more information therefore decreasing the overall level of uncertainty. This reaches 0% when the continual risk has been accounted for or eliminated with risk management strategies.

The closing of the project should involve these risks being eliminated or responsibility for management of these risks transferred to a group dedicated to the ongoing maintenance of the project. Read the Complete Article

Project Management: How Much Contingency Do I Need?

Project Management: How Much Contingency Do I Need?
By Wendy Isaacs

Unless you’re managing a project with zero risk (unlikely) then before you can commit to budget or timelines you’re going to need to do some contingency planning.

How do you know what the right amount of contingency on a project is? The short answer is you don’t.

If you’ve worked with the client, team and technology before then you can use your previous experience to give you a good idea of costs and the level of contingency you’ll need.

If it’s a new project for a new customer or you’re using new technology or you’re working with a new team or external suppliers/dependencies then the project comes with a higher risk factor and any calculations or knowledge you’ve previously gained are unlikely to apply.

Many Project Managers start off by adding a blanket contingency e.g. 20% to the costs and time of any project however it is hard to articulate the idea/cost of contingency to a business stakeholder (especially in a pitch) using this approach. Read the Complete Article

Risk for Today’s Fast Paced Projects

Risk for Today’s Fast Paced Projects
By Kevin Engler

Short-term fast-paced projects face unique risks that are very different than those faced in longer term projects. Today many projects require hitting market windows of opportunity that have short lives but, offer huge profits and paybacks. However, if tardiness is the most significant project risk, then missing the window would constitute a failure and result in a catastrophic economic impact to the business. These risks, associated with short-term projects, need to carry high weight and visibility by the team and must be well understood by the team members to ensure success. Moreover, fast moving projects need to show results quickly to satisfy management, especially for projects that are similar to those attempted in the past. This form of management pressure may force the team to take approaches similar to those past projects, only because of their successful history. This can be good if the approaches are current and apply properly to the project or they can be troublesome if past mistakes are unknowingly repeated. Read the Complete Article

Project Management: Identifying Risks

Project Management: Identifying Risks
By Luke Miller, Northwest University

Identifying and planning for risks should occur at the beginning of a project and be continuously revisited throughout the project. Risk is defined, as an event or condition that may or may not occur, if it does happen, the outcome will positively or negatively affects the project. There are several techniques to help identify risks.

One of the most widely used and effective ways to identify risk is through brainstorming sessions. A brainstorming team should consist of all major stakeholders on the project. There should be a facilitator that keeps the group moving and gives everyone involved an equal chance to be heard. The point of this exercise is to list as many potential risks as possible. Do not hold back, name risks big and small. There is no need analyze and worry about how likely or unlikely the risk during a brainstorming session. Read the Complete Article

Risks: Not Always Negative

Risks: Not Always Negative
By Christian Bisson

A common thinking about risks is that they are all negative and should be mitigated or avoided as much as possible. That common thinking is wrong!

A negative risk is a threat, but a risk can be positive and considered an opportunity so instead of mitigating or avoiding, you’ll want to exploit or enhance.

A good example is the risk of having too many visitors on your brand new website on the day of the launch. Having lots of visits is positive, so it’s not a threat unless it’s poorly planned and can crash the server, so you have to take it into consideration.

You may want to enhance the risk (plan a marketing blast to attract even more visitors) or exploit (use cloud hosting that can adapt resource accordingly, or have more resources ready for the server so you can welcome more visitors). Read the Complete Article

Risk Allocation in Construction Industry

Risk Allocation in Construction Industry
By Tricia Corcuera

This week we are focusing on key considerations in managing risk in industrial construction projects. First and foremost, it is important to realize that risk is unavoidable in the construction industry – there are no perfect engineers, no foolproof project plans, and mother nature is definitely not perfectly predictable (this will not be a great revelation to anyone working in construction). Therefore, it becomes important to consider that there are a range of possible outcomes and each outcome has a possibility of occurrence. Negative outcomes can frequently be minimized or avoided if their root cause can be identified and managed before the event occurs.

Risks are present in construction projects in different ways:

  • Pre-project risks – site access, inaccurate estimation bid, sourcing raw materials and heavy equipment, project delivery of choice, faulty architect design and poor contract management.
  • Project execution risks – This is a wide area which consists of risks in contractor and subcontractor conduct and performance of work, experience and performance, site management and safety risks.

Read the Complete Article

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