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Risk Identification Tools (#3 in the series How To Effectively Manage Project Risks)
By Michael D. Taylor

To avoid the , the project manager can take advantage of any one of the following risk identification tools. Each of these tools enables the team to focus on parts of the project rather than the project as a whole. By doing this the focus is more concentrated and more likely to give better visibility of potential project risks.

Process Flowcharts. Focusing on project processes such as the schedule network diagram, communications, information flows, decision making, Intranet usages, documentation, e-mail, manufacturing, coding, testing, etc., will inevitably disclose potential project threats.

Analogous Project Comparisons. Previous similar projects, that have experienced certain problems, can be invaluable to the new project. Project managers of these previous projects can become a fountain of information regarding similar risks to be faced by those on the new project.

Risk Checklists. With project schedules becoming increasingly shorter, project managers must find ways to identify project risks rapidly. One means of accomplishing this is by developing a checklist of project aspects that might present risks. This checklist should be very generic and can be carried from project to project.

Work Breakdown Structures. Because the project WBS is a decomposition of project elements it can also enable project risk teams to focus on specific smaller areas within the project.

Brainstorming. The convenient practice of brainstorming can also aid in the identification of project risks. Any possible condition or event that might prevent reaching project goals should be presented without evaluation. It is the combination of ideas that often generate new ideas and views, a phenomenon that might be called “idea hopping.” Eliminating any ideas or suggestions prematurely can hamper this process.

Ishikawa Diagrams. The Ishikawa diagram (or fishbone diagram or also cause-and-effect diagram) are diagrams, that show the causes of a certain event. A common use of the Ishikawa diagram is in identifying potential factors that might present unfavorable events or conditions. Most Ishikawa diagrams have a box at the right hand side, where the effect to be examined is written. The main body of the diagram is a horizontal line from which stem the general causes, represented as “bones”. These are drawn towards the left-hand side of the paper and are each labeled with the causes to be investigated, often brainstormed beforehand and based on the major causes listed above.

Affinity Diagrams. The affinity diagram is a business tool used to organize ideas and data. The tool is commonly used within project management and allows large numbers of ideas to be sorted into groups for review and analysis. The affinity diagram was devised by Jiro Kawakita in the 1960s and is sometimes referred to as the KJ Method. These diagrams work best when sound brainstorming processes are followed.

Risk Breakdown Structures. The Risk Breakdown Structures (RBS) is a hierarchically organized depiction of identified project risks arranged by risk category and subcategory that identifies the various areas and causes of potential risks. An example is shown below:

Risk Breakdown Structure

Risk Breakdown Structure

MICHAEL D. TAYLOR, M.S. in systems management, B.S. in electrical engineering, has more than 30 years of project, outsourcing, and engineering experience. He is principal of Systems Management Services, and has conducted project management training at the University of California, Santa Cruz Extension in their PPM Certificate program for over 13 years, and at companies such as Sun Microsystems, GTE, Siemens, TRW, Loral, Santa Clara Valley Water District, and Inprise. He also taught courses in the UCSC Extension Leadership and Management Program (LAMP), and was a guest speaker at the 2001 Santa Cruz Technology Symposium. His website is www.projectmgt.com.

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