How many projects do not effectively manage risk? Many projects start with some form of risk assessment. Then populate a risk register with the risks that have been found. Too many feel that is the job done.
In parallel it is true that many projects build project plans never to track them. This approach leads to a short term comfort. Everyone believing the project will deliver the expected objectives on time and to budget. The truth is very different.
Project risk management too often is seen as an evil. Something to be policed by the PMO, quality control or central risk management. If project team members do not value or understand risk management then projects can fail. Also many stakeholders will see risk as a blocker to progress and not an enabler of quality delivery.
Consequences of not managing project risk
There is a range of consequences for not managing project risk correctly. All of which can impact the quality, time scale and cost of your project. The most significant impact is total project failure. Where issues have become too significant to resolve to make the continuation feasible, failure is a likely outcome. But even in situations where projects are able to complete poor risk handling has an impact on how well customers adopt the solution.
Good risk management does not need to consider only negative impacts. Solid risk management should highlight opportunities to enhance benefits. Neglect of your risk management process means that opportunities will not even be considered.
As well as these considerable impacts from missing risk management lack of attention to risk can result in:
- discontent among stakeholders
- change of project manager or the team
- extra spending exceeding budget
- project taking more time than expected
- damage to reputation for project manager, project team or the organisation itself
- poor quality result
- project cancellation or closure
Reasons to consider a better approach
Organisations are increasingly embedding the management of risk to improve safety, quality and reduce costs. The more mature environments are actively seeking opportunities to not just avoid cost but realise better revenue and profit.
With better tools like PPM solutions, specialised risk recording tools and collaboration tools like SharePoint the time required to administer a risk log is greatly reduced. The level of reporting and analysis available is more comprehensive and increasingly ease to provide..
Consider transferring of paper logs and static excel spreadsheet to better tools. This will aid the management of risks for projects as well as provide audit trails. Applications can also provide alerts and some automation (depending on the tool used).
Risk management for a project is not optional extra; tools can help. but the project manager and their team need to own and drive active risk management. Even stakeholders can help the process. People need to drive the process.