Anticlue

Project Risk Management

Project Risk Management involves conducting risk management planning, engaging in risk identification, completing risk analysis, creating a risk response action plan, and monitoring and controlling risk on a project. Project Risk Management is a continuous process to be engaged in through out the entire project. A key point to remember is that risk is not always bad. There are opportunities and there are threats. The opportunities are the good risks. The treats are the bad risks. The purpose of project risk management is to increase the likelihood and impact of positive events and to decrease the probability and impact of negative events. The six risk management processes are:

1. Risk Management Planning – Risk Management Planning is the process where decisions are made on how to approach, plan, and execute risk management activities. This is completed as a part of the planning process group.
2. Risk Identification – Risk Identification determines the risk which can affect the project's objectives, and identifies the characteristics of those risks. Risk Identification is commonly first engaged in the planning process group.
3. Qualitative Risk Analysis – Qualitative Risk Analysis prioritizes risk for future analysis by analyzing the probability of occurrence and impact. Qualitative Risk Analysis is commonly first engaged within the planning process group.
4. Quantitative Risk Analysis – Quantitative Risk Analysis assigns a number to risks as a part of determining the impact on overall project objectives. Quantitative Risk Analysis is commonly engaged within the planning process group.
5. Risk Response Planning – Risk Response Planning ascertains the options and action plans to enhance the opportunities and mitigate the threats. Risk Response planning is normally first started in the Risk Response Planning Group.
6. Risk Monitoring and Control – Risk Monitoring and Controlling is an ongoing process. It involves overseeing the effectiveness of risk responses, monitoring residual risks, identifying and documenting new risks, and assuring that risk management processes are followed. This is done throughout the Monitoring and Controlling Process Group.

Each Risk Management process results in a specific deliverable which is used as the foundations for the subsequent process. Combined the risk management processes provide a best practice pattern for managing risk on a project.

Ways to Improve Communication

Since communicating is about 90% of a project managers time, there is a reason to improve communications on a project. To overcome communication barriers, project managers must establish clear lines of communication and keep stakeholders constantly informed about the development of the project. The following techniques can help:

• Keep a thorough knowledge of stakeholders' needs - Once people or organizations with a stake in the project are identified, you could invite those stakeholders to meetings or conference calls designed to elicit information regarding their needs. You might ask them about the format that best meets their needs, as well.
• Use stakeholders' preferred method of interaction - It is important to find out from your stakeholders what communication channels they prefer--face-to-face, telephone, online, or hard copy. You can ask them in a meeting, by phone, or in a questionnaire. At the same time, you should gather relevant contact information.
• Keep an open-door policy - To strengthen information sharing, tell stakeholders--via their preferred method of interaction--when you are available and invite their comments and questions. You could suggest the best time or way to reach you, or set aside particular times for them.
• Interpret and clarify policies and procedures - Once you've consulted with stakeholders and developed communications policies and procedures, you must be sure they're understood. You can provide them in writing and then follow up by providing interpretation and clarification in meetings, on the telephone, or by e-mail.
• Motivate staff and foster teamwork - You can motivate stakeholders to interact with one another by reminding them that they require each other's contributions in order to succeed. You should convey this general message formally and informally, and reiterate it in particular situations where it applies.

Managing Stakeholders

Frankly, miscommunication can quickly derail a project. Miscommunication commonly takes place when people issues are mishandled. Stakeholder management illustrates how to manage communications with stakeholders focusing on the needs of the stakeholders and the issues that arise from the stakeholders. The project manager is normally responsible for stakeholder management.

The inputs for managing stakeholders are:

• Communications Management Plan - The Communications Management Plan outlines how project communications will be addressed. It describes the frequency and medium for communications, and identifies those responsible for communicating with stakeholders. It specifies stakeholders' requirements and expectations. This plan should contain the best methods for communication with the stakeholders that have been bought into, agreed, are realistic, and formal.
• Organizational process assets - Organizational process assets are any or all process-related assets which can influence the project's success. Team members need to know the company's processes and procedures in order to understand how these assets will influence and affect the project. Organizational process assets commonly include: documented lessons learned, policies and procedures, guidelines, and best practices.

The inputs to the Manage Stakeholders process provide critical information about what processes to follow when communicating with stakeholders.

There are two tools and techniques used in managing stakeholders. These tools and techniques are:

1. Communication methods - Communication methods are listed in the communication management plan. Commonly face to face meetings are the most effective way for communications after all body language is a very telling means of communication. However there are times when face to face meetings are a luxury which can’t be justified. In these situations possible communication methods are: traditional mail, electronic mail, phone calls, an extranet site, ftp site, Internet meeting, face-to-face meeting, or videoconferencing.
2. Issues log – The issues logs is a document which can be used to facilitate communication. An issues log documents project issues and relays how these issues get resolved. The project manager clarifies each issue, identifies a person accountable for resolving the issue, and sets a target date for resolution of the issue. This is a great reference tool that provides details that normally might get lost with the passing of time. Having an issues log will prove invaluable when communicating with others about their concerns. From a single source of truth perspective, it is best to have only one issues log per project. Having 3 people keep 3 different issues logs is just added unnecessary confusion.

Understanding what communication methods to use and knowing how to monitor and document issues helps project managers effectively manage stakeholders and keep their projects on course. Can you imagine being on a project where everyone communicates every which way with no formal issues system? Shivering yet?

The result of managing stakeholders will be actions, documentation, and updates to existing documents or procedures. The resulting process outputs are:

• Resolved Issues – Resolved issues are the stakeholder requirements which have been identified and resolved.
• Approved Change Requests – Approved change requests are derived from the resolution of stakeholder issues which lead to changes in the project plan and activities. These changes have all gone through the formal integrated change control process.
• Approved Corrective Actions – Approved corrective actions are actions which will brng the project back to task with expectations and objectives detailed in the Project Management Plan.
• Organizational Process Assets – Organizational Process Assets that are updated due to outcomes from stakeholder management. These commonly are lessons learned documentation including the root cause of the issue, the reasoning behind the corrective action chosen, and other types of lessons leaned during stakeholder management.
• Project Management Plan (updates) – Updates to communication management plan are reflected in the Project Management Plan.

The most critical output of the Manage Stakeholders process is that the issues get resolved and that solutions are put into place effectively. Issue resolution means project progression.

Performance Reporting

Performance reporting is the process of collecting all baseline data and distributing performance information to stakeholders and the project. An aspect of this report is to clarify how resources are being used to obtain the objectives of the project. This should be done in conjunction with providing information on scope, schedule, cost, risk, procurement, and quality. In my experience this is normally a good activity to complete with regular frequency.

The inputs to performance reporting are:

• Work performance information - Work performance information details the work that is being executed, recently completed, and next steps. This information is gathered from the Direct and Manage Project execution process.
• Performance measurements – Performance measurements are the earned value indexes: Cost Variance, Schedule Variance, the Cost Performance Index, Schedule Performance Index, Planned Value, Earned Value, and Actual Cost. Performance measurements assist in reporting unbiased and quantifiable information – an excellent mechanism for accountability.
• Forecasted completion - Forecasted completion is the predictor of potential project roadblocks. Commonly, forecasted completion is expressed through two factors: estimate at completion (EAC) and estimate to complete (ETC). These are useful tools to predict completion and the expense to get to that state.
• Quality control measurements - Quality control measurements result from activities comparing the results to the quality standards and processes. This is the true check to assure a quality product or service has been provided
• Project Management Plan - The Project Management Plan contains the Performance measurement baseline which contains the approved measures for management control.
• Approved change requests - Approved change requests are requested changes that have bee that have been approved and are ready to be implemented. They are used to determine project changes that have been formally approved and must be communicated to stakeholders through integrated change control.
• Deliverables - Deliverables comprise the quantifiable actions, results, products, or capabilities that will be produced in order to complete the project.

The inputs to performance reporting are absolutely necessary to providing an accurate quantifiable performance report. Without this information your report may sound like it was created by Captain Fluff.

Once you have all the inputs to the process, let’s look at some common tools and techniques used with the performance reporting process. The tools and techniques for performance reporting are:

• Information presentation tools - Information presentation tools enable the project team members to present project performance data. Most organizations have software packages which can be used to paint a picture with a graph or a spreadsheet analysis.
• Performance information gathering and compilation - The performance information gathering and compilation technique is the organizing of all pertinent project information.
• Status review meetings - Status review meetings are regularly scheduled meetings to exchange information about a project. Commonly there is a team level status review meeting and then an executive over site review meeting.
• Time reporting systems - Time reporting systems record and provide information about the time spent for activities on a project.
• Cost reporting systems - Cost reporting systems record and provide the costs expended for the project.

Using these tools and techniques help to have an efficient reporting process. Imagine if the only way to obtain time spent on a project was to review every team members time sheet and then sum up the parts. What an archaic way to manage a business! Also this would truly eliminate the efficiency of the project manager.

The Performance Reporting process provides pertinent and verifiable documentation of project performance. The outputs of the Performance Reporting process are:

• Performance reports - Performance reports are presentations and documents that summarize work performance information in the form of bar charts, S-curves, histograms, and tables.
• Forecasts - Forecasts are predictions of what will occur based on the project performance to date. Forecasts are updated and reissued as new work performance information is available during project execution. A project manager might want to conduct a trend analysis of cost and schedule variance to see how on budget and on time the project is likely to be.
• Requested changes - Requested changes are project changes affecting scope that are submitted to the Integrated Change Control process. These must be reflected in performance reporting to stakeholders.
• Recommended corrective actions - Recommended corrective actions are documented suggestions affecting project execution designed to ensure that expected future project performance will conform to the Project Management Plan. Once a project manager is made aware of a schedule or cost variance, he needs to take action to get the project back in line with original objectives. To do so, recommended corrective actions may be offered.
• Organizational process assets updates - Organizational process assets updates are changes or updates to formal and informal policies, plans, guidelines, organizational best practices, and lessons learned from project experience.