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Manage Project Risks

August 27, 2008 | Author: PM Hut | Filed under: Project Management Best Practices, Risk Management, Risk Response & Control

Manage Project Risks (#10 in the series 21 Project Management Success Tips)
By Karl E. Wiegers

If you don’t identify and control project risks, they will control you. A risk is a potential problem that could affect the success of your project, a problem that hasn’t happened yet—and you’d like to keep it that way. Risk management has been identified as one of the most significant best practices for software development. Simply identifying the possible risk factors isn’t enough. You also have to evaluate the relative threat each one poses so you can focus your risk management energy where it will do the most good.

Risk exposure is a combination of the probability that a specific risk could materialize into a problem and the negative consequences for the project if it does. To manage each risk, select mitigation actions to reduce either the probability or the impact. You might also identify contingency plans that will kick in if your risk control activities are not effective. Suppose you are concerned that your top developer might move to Australia to be with her new boyfriend. Consider the following actions:

  • Pay her more money, offer to hire the boyfriend, or give her more vacation time to fly to Australia periodically (reduces probability).
  • Keep her on as a telecommuting employee or contractor, have her document her work, or have her impart her specialized knowledge to other employees (reduces impact).
  • Line up a consultant or contract specialist to replace her if she leaves anyway (contingency plan).

A risk list does not replace a plan for how you will identify, prioritize, control, and track risks. Incorporate risk tracking into your routine project status tracking. Record which risks materialized and which mitigation actions were effective for reference on future projects.

Adapted from “Practical Project Initiation: A Handbook with Tools” (Microsoft Press, 2007). A condensed version of this paper was published in Software Development magazine.

Karl Wiegers, Ph.D., is Principal Consultant with Process Impact, a software process consulting and education company in Portland, Oregon. Karl’s most recent book is “Practical Project Initiation: A Handbook with Tools.” Karl is also the author of four other books and 170 articles. Karl is a frequent speaker at software conferences and professional society meetings. You can reach Karl through www.projectinitiation.com or www.processimpact.com.

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