Risk management - Other issues
Other issues
Separate project
Depending on the size of the overall project it may be worth considering making the RISK MANAGEMENT PROCESS a project in its own right.
Project life cycle
The challenges facing the RISK MANAGEMENT PROCESS will differ depending at what point in the project life cycle it is implemented.
Concept
When the RISK MANAGEMENT PROCESS is instigated too early in the project life cycle there are advantages and distinct disadvantages.
- Information and supporting documentation is likely to be patchy.
- The scope of the project may be difficult to pin down.
- Many aspects of the project will be very fluid.
- The early approach leaves more opportunity to identify opportunities.
- There will be less detail leading to a more strategic approach.
- Opportunities may lead to a redesign of the product.
Conversely, too late in the project life cycle many aspects of the project are ‘in place’ and difficult to modify.
There may be opportunities here to examine the overall strategy and various outcomes of introducing a particular product.
Design
Uncertainty of the later stages of the project applies pressure on the RISK MANAGEMENT PROCESS. In particular, costs will be hard to pin down.
Plan
If the idea of a risk assessment is new to a company then you will need to introduce it in a manner that doesn’t alienate personnel.
The best place to start is probably utilising a project in the plan stage to minimise problems as discussed above.
You don’t want to step into a project that has been poorly managed to date or where there is too little time [see 'The Complete Time Management package'] to do the RISK MANAGEMENT PROCESS justice.
Allocate
Together with ‘design’ and ‘plan’ phase these generally are called the ‘planning’ phase. There are commitments of resources that are required for the next action plans towards the following horizon planning. Other aspects e.g. contracts will be developed.
If approvals are still required at this stage in terms of GO / NO GO / MAYBE decision these may not just be internal but may also rely upon external sanctions.
For example, costs my be a major concern to banks.
The role of the RISK MANAGEMENT PROCESS in this phase will be to challenge previous assumptions from earlier phases.
This process is also likely to include the efficiency of the project management [see ‘The Complete Project Management package’] and [see 'The Complete Project Management plus PRINCE2'] process and the quality of the personnel involved.
The danger of risk assessment at this stage is that it is seen as attacking all that has gone before and will require good management.
It can highlight missing insights that should have been gained earlier.
A well run project should really see the need for some sort of risk management at an earlier stage, preferably the ‘plan’ stage.
It is common for the detailed plans (schedules) to be generated from the bottom up. This will be a complete waste of time unless strategic issues have been reviewed thoroughly via a risk assessment.
It is also possible that a formal RISK MANAGEMENT PROCESS at this stage may review an earlier risk assessment process.
Execute
This is a dangerous place to introduce the RISK MANAGEMENT PROCESS. It is all a little too late. If the project is in trouble at this point then a change of key personnel may be the result.
At this point schedules that are too detailed and rigid can be a bad thing as flexibility is lost. It is better to encourage empowerment amongst the participants.
Time is often better spent earlier using the RISK MANAGEMENT PROCESS to examine strategic issues.
Deliver
Does the product do what it is supposed to in the field?
This is usually much too late to make any risk assessment worthwhile.
However, a particular circumstance may have lead to the product not performing as expected. As a contractor you may well be aggrieved and, for example, as a contractor may wish to justify certain fees. The use of a risk assessment in these circumstances to justify the contractor’s position may prove useful.
Review
By its very nature a review stage that is useful will already have had risk assessment in place at an earlier stage.
It is not possible to introduce the RISK MANAGEMENT PROCESS at this stage.
Any attempt to introduce anything here will be ‘closing the stable door after the horse has bolted’ and will be riddled with the wisdom of hindsight.
It may also be seen as an instrument to apportion blame.
Without the existence of a suitable risk assessment process valuable data may not be captured which allows you to compare the ‘overall performance’ of the project.
This may be valuable over a period of time when comparing against other projects.
Support
Introduction of the RISK MANAGEMENT PROCESS at this point is very unlikely.
Any problems here will be as a result of the failure to identify potential risks earlier.
Any problems here may lead to crisis management.
For example, a product may have to be withdrawn due to adverse affects found out only after considerable use.
This can happen in the pharmaceutical industry or may be the car industry where products may withdrawn for safety issues.