As your project progresses, it is essential to evaluate whether risks have become too substantial for the project to proceed. This video takes a look at an overall view to the risks present on your project and provide tips for working with management to e
- If you aren't careful, you can create a substantial risk while managing risk on your project. While you deal with risks that are tied to tasks, you can forget what you're really here for: to deliver an entire project. We need to step back and see, as they say, the forest through the trees. We need to assess overall project risk. There are two major considerations when evaluating overall project risk.
First, your ability to deliver the project with the risks you know about, and then controlling the various directions the project can take to reach a conclusion. Let's take a look at each of these. Risks, should they come to pass, will have an impact on your project outcomes, along with the money and time it takes to deliver those outcomes. If the impacts of your risks or the cost to address those risks outweigh the benefits you'll get from the project, you probably shouldn't proceed.
For example, if you work in an insurance company developing new products, you need to watch insurance regulations to be sure you can legally sell the products you design. Let's say the government starts discussing new regulations and your experts determine there's a 70% chance a law change will make your new insurance offering illegal to sell. You might want to reconsider your project as being too high risk until you know more about the regulations that are put into law.
This was a very high risk example. It isn't always that obvious. So, the viability of your project should be examined frequently. As your individual risks change, so will your overall project risk. This should be reviewed with your sponsor on a regular basis. Then, your ability to control the various directions your project takes is the other major factor to consider when addressing overall project risk. As your project unfolds, unexpected discoveries may surface.
So, let's say the technical approach planned for your project turns out to have more variables than you expected. I had this happen on an IT project I managed. After starting the project, my company bought another small company as a means of expanding their product offerings. This new scope created many complications. What started as a straightforward technical solution was going to have to interact with three other systems. So I had a larger number of variables to consider.
I could no longer reliably predict what course of action was best to deliver the project. This introduced significant risk, and we canceled the project to allow us to study our options and launch a new project. Other examples of overall project risk are in the exercise files for the course. Overall risk is the key to determine if a project is appropriate. Surfacing concerns with overall risk isn't a failure on your part.
Rather, it's the smart thing to do to protect your organization. Though many might see big healthy trees around you, making sure you're in the right forest is one of your jobs as a project manager.
Note: This course follows the latest guidance from Project Management Institute, Inc., as outlined the PMBOK® 6 Guide.
- Explore why dealing with risks needs to be part of the everyday process used to manage a project.
- Learn to outline the most common, pragmatic approaches to identifying risks specific to a project.
- Recall methods for qualifying and quantifying your risks to determine specific risks and manage their costs.
- Examine the primary considerations for a project risk plan and what components should be included in every plan.
- Assess techniques that help you identify the overall risk a project presents to your business.
- Examine several risk analysis and filtering examples that help ensure you've addressed individual risks properly on your project.