When you are young, risk seems like a fun preposition. It sounds like something that you might encounter while skiing or a car race. But when you grow up and reach the position of project manager, you understand that risks are something that you cannot take lightly.
As a project manager it your duty to ensure that the project that the company has entrusted to you goes well and that the client’s requirements are fulfilled But how do you assess if the project is completely safe? How do you know that there is nothing that can go wrong? Well, the answer to these and many more project safety related questions is project risk management.
Project risk management is a project management activity that comprises of identifying, assessing, measuring, documenting, communicating, avoiding, mitigating, transferring, accepting, controlling and managing risk.
But to carry out all of the above mentioned tasks, you need to know how to identify risks. You cannot be staring at a blank risk with no idea on what to do and what not do. You need to be familiar with the top 5 types of risk in project management and they are listed below.
A scope risk refers to the threats posed by the changes in scope that are caused due to many factors. The first is scope creep it means the project grows unnecessarily complicated because the clients keep on adding additional requirements and the developers start to take advantage of their position. Moreover, this risk can also be caused by other aspects like integration issues, hardware or software defects and another major reason for this risk could be a change in dependencies without the knowledge of the project manager.
It is often observed that the schedule of a project gets disrupted and it does not proceed as planned, there might be a number of reasons for this. Some of the main reasons can be delays at an external vendor, natural factors, errors in estimation and delays in acquisition of parts. For example a test team cannot begin its work until and unless the developers have done their job, a delay from even one member of the project can disturb the schedule of the entire project.
To avoid such scheduling risks you have to be smart and use tools such as Work Breakdown Structure and RACI matrix that will help you in proper scheduling.
The major reason behind this risk is outsourcing and personnel related complications. A big project may involve dozens or even hundreds of employees and it is crucial to manage the attrition issues and leaving of key personnel. Getting a new employee at a later stage in a project can have an adverse effect on the project and it may slow down the progress of the project.
Apart from attrition, a skill related risk may also pose a threat to your project. For example, if the project needs a whole lot of website front end work and you do not have a designer in your team, you will face a lot of unexpected risks.
Another major source of resource risk is the lack of the availability of funds. This can happen if you rely too much on an external source of funding and that source suddenly faces a cash crunch and is unable to pay you.
This risk includes delays that are caused due to software or hardware defects of the failure of an internal service of a platform. Say for example, halfway into the project you might realize that the cloud service provider that you are using does not live up to your current expectations. Furthermore, you could also experience issues in the platform you used to build your software. Hence, technology risks can also affect your project.
Inconsistent executive support
Inconsistent, weak or wavering executive commitment is often a project’s weakest link. But these issues can be resolved if you deal with them intelligently. You need to ask for specific commitments from your executives, if they deny that support, you can document the same as risk and carry out the required measures to correct the same.
Thus, knowing the top 5 types of risks in project management will help you make your project a super-successful one as now you know what to avoid!