When you undertake any new project, there is always an element of risk involved, and finding ways of managing risk is vital if you want to help your project succeed. As aproject manager, it is important that you understand the risk factors of your project so that you can arrange your project plans accordingly, make your budget and take into consideration any contingency plans that might become necessary.
There are typically four factors that can increase the risk level of your projects. These are detailed below:
Strategic factors can include weaknesses that are a result of the operational strategy. If the objectives of a project and the goals of the company contain a link that is not as strong as it should be then this can have a detrimental effect on project risk. Project goals that are constantly in need of alteration due to issues as a project progresses, or poorly defined scope can both help to increase the risks to a project that have the potential to end in a failure.
If your project team do not have the relevant skills to do all the necessary work on the project, then even with the best-structured outline to your plan you are going to struggle. When it comes to the processes that you put in place for your project you need to make sure that you have strong project management skills, otherwise these processes will also add to the risk levels you will come up against. This is especially relevant if scaling these processes up, or down, to fit the size of your project is not an option. Any project needs a certain level of resources and if this is an area in which your team is lacking then this will almost affect the risk profile of your project.
Processes are important; they keep your projects running. Communication is one of the most important processes to the management of your project and issues with communication can cause a major impact on your project risk. But it isn’t just about communication between the members of your team. It is important to remember that all communication matters and that includes any communication that is made with other departments within the company. You need to make sure that any technology you use has been tested and that you understand how it works otherwise this can increase your project risk profile.
Even the way in which an organisation works can play a major role in influencing the risk levels of your project. If staff morale in the company is low then this can, in fact, make a project riskier, the same can be said when there is a significant resistance to change. It is important to look at how your company measures how something provides good value; if this is done by focusing on price and cost then this can also make your project risker. Buying can be a very risky area for projects but if the company has a poor organisational approach to the way in which they deal with procurement then this can, of course, be detrimental as well.
If you would like to know more about our project management e-learning, then please contact us.