How to reduce project risk so you deliver on time and under budget
The SWWE Branch was very pleased to be able to organise a joint event with the Worcester and Malvern Chapter of the Midland Branch at the Thistle Hotel Cheltenham. In opening the event, SWWE Chairman, Martin Gosden, thanked Corporate Member Atkins who had arranged the room and contributed towards the buffet costs. Martin explained that the event was specifically aimed at an introductory level to meet the needs of newcomers to the profession. The Branch intended to hold a variety of events to meet the needs of both the less experienced and more experienced members.
Before the main event started, Martin Gosden was very pleased to present APM Registered Project Professional certificates to 4 members who had successful met this top project management standard during the pilot phase. Rob Boyden, Paul Jenkins, Paul Jonson and Mike Kimmins were congratulated on their very significant achievement. The RPP will be fully launched to members on 1 March, and there is a launch event in Bristol on 15 March.
Bryan Barrow is an independent project management consultant and Deputy Chair of the APM Risk SIG. Bryan set the context with the recession and challenging job market that professionals cannot afford to have failing projects. A key tool to ensuring project success is risk management:; managing risks to prevent them becoming issues. Good risk management lowers total cost, increases ROI and reduces project failure rates.
Bryan reviewed the PRAM guide risk process and challenged what steps would you not do? Therefore why do so many Project Boards allow PMs to cut corners?. Risk mitigation early can be cheap. Fire fighting issues costs time and money.
Bryan told the story of Tim who was handing over a failing project, where risks had not be identified or managed. He identified lessons for Tim: have a rick off meeting with stakeholders to agree the scope and goals; have a planning workshop with the team get them involved early; hold a risk workshop with the team and stakeholders, identify risks against project deliverables ask the question, is the project viable?. Quantify both the probability and impact, the cost of resolving the risk and the risk budget needed. Key risks to focus onare those which challenge the viability of the project, risks on the critical path, and catastrophic risks, low probability, high impact.
Bryan explained the importance of communicating risk to both the team and the project board. It is the duty of the PM to provide the right information to the project board so that they can make the right decision: the real risks, realistic plans and mitigation. It is important to recognise that the total budget includes the cost of in scope risks, in scope costs as well as contingency costs. Most project budgets are unrealistic contingency costs are often ignored! Bryan uses a simple rule of 2 to check project viability. If a project is twice as long, twice the cost, or only offers half the benefits, then it probably is not viable. As a PM you advise the Project Board, but they decide. The principle should be one of no surprises to build confidence, and to say it as it is.
Risk management should be part of everything you do. It is essential to get the teams engagement. Communicate risk, review risks with the team as core part of the team meetings. Review risks separately from issues. Keep looking for new risks as you progressively plan the project.
Risk management should be an integrated part of everything a project manager does, and must be honestly communicated to ensure no surprises, only then can projects be delivered on time and under budget.