Every project begins with a unique set of risks that may affect the project throughout its timeline. Risk is a consequence of uncertainty, and project managers well know that all projects have a number of conditions and elements that will likely not remain static throughout the project.
A risk is defined as any uncertain event or condition that if it occurs will have a positive or negative impact on a project. Experienced project managers identify risks as part of the project planning process and then roll the Risk Management Plan into the project plan or charter.
At Boost Midwest, our project management experts can help you create and implement a risk management process and plan by using best practices to identify risks before and throughout the project life cycle.
According to the Project Management Institute, “Project risk management is not an optional activity: it is essential to successful project management. It should be applied to all projects and hence be included in project plans and operational documents.”
However, in order to create and implement a Project Risk Management process, the risks first need to be identified:
Early in the project. Even though uncertainty may be high in the initial stages, identifying inherent risk at the outset may affect key decisions and change the project strategy.
Using an iterative approach. As all risks can’t be known at the start, risks should be assessed at predetermined points in the project timeline.
In a consistent manner. Potential risks may arise at unexpected times in the project, so be ready to identify them on an as-need basis throughout the project life cycle.
At change control times. If the project baseline changes, so do the risks. Therefore, identifying risks at change control times is critical.
As crucial milestones are reached. When a project reaches a major milestone, it also provides valuable information for future milestones, requiring a fresh look for potential risks that may lie ahead.
For agile projects — projects that are broken into smaller, manageable tasks — risks may also be identified during:
Sprint planning. When your team addresses its task backlog, identify risks that may arise during the sprint.
Release planning. As agile project management is often used for IT and product-centered projects, the release planning stage is a critical time for identifying risks that can hurt a successful release.
Daily standup meetings. These 15-minute team meetings are an ideal time to identify new risks.
Prior to each sprint. Before your team begins its sprint, identify any risks that may have been overlooked at other stages of the project.
Once a framework is established for when to identify risks for a specific project, the next step is to identify the risks themselves. This is a critical step each time it is taken, as the project manager and team can only assess and plan for known risks to the project objectives and goals.
Boost Midwest knows that not all risks can be identified at the project’s start. Some risks only become apparent once a project is underway. Alternatively, new risks may appear if the scope of the project changes. So, it helps to use a fluid approach to project risk management, understanding the risk management plan may change throughout the life of the project.
Project managers should be creative, using several techniques to identify risks. Here are seven ways to identify risks recognized as best practices:
Stakeholder interviews. Bring in more than the project team members, since different perspectives bring different issues and risks to light.
Brainstorming. Plan brainstorming questions in advance that address the different aspects of the project.
For the project objectives: What are the most serious risks related to schedule, budget, quality, scope, and so on.
For the project tasks: What are the most serious risks related to the individual tasks, such as requirements, testing, implementation, and the like.
Historical review. While every project has its own tasks, milestones and objectives, reviewing past risk management processes will likely help you identify risks in your current project. In addition, your company may already have a checklist of common risks available for review. If it doesn’t, consider creating one during post-project review processes to capture the most significant common risks.
Assumption analysis. An assumption is a fact or factors considered as true, real or certain without any proof and therefore is a source of risk. An important question for project managers to ask all stakeholders is what assumptions they have concerning the project. Then, document these assumptions and their related risks.
Current assessment. This method analyzes all of the project characteristics against an accepted framework or model in order to highlight any areas of uncertainty. Current assessments don’t rely on reference points outside of the project (unlike historical review) and are solely based on examining the current project.
Cause and effect diagram. Visually mapping out causes and effects are a simple yet powerful way to help identify factors that may lead to risks. By identifying the causes, the project manager can then reduce the potential risks.
Categorize risks. During brainstorming sessions, ask team members to write each risk they identify on an index card or sticky note. Then sort them into risk categories to help identify in which project areas major risks may lie.
Project management means planning ahead, so taking the necessary steps to assess and document potential risks will help project managers lead their project and team to its desired outcome.
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