Why do a lot of organisations start high-risk projects without demanding robust project assurance?
Projects fail for several reasons. Recent global reports say that inadequate risk management is a very common cause.
Successful project managers make an effort to resolve high numbers of exposure before they occur, via systematic risk management processes.
Many projects are inherently encountered with myriad risks and they are often significant in scale, complexity and ambition. Delivering large-scale projects is usually adversely suffering from a bias towards being over-optimistic.
Imperfect, insufficient or inadequate data increases exposure very often results in over-estimating benefits and under-estimating costs.
Managing macro and micro-level events linked to achieving project deliverables, whilst balancing the requirements of many stakeholders, happens to be increasingly important.
Assessing risks at both portfolio and work-stream levels speeds up confidence that risks are understood.
Projects in many cases are prioritised strongly related their amounts of perceived exposure and something has its own risk profile.
Project Risk Management
Project risk management concentrates on identifying, analysing and answering project events.
It needs to be designed to systematically identify and manage numbers of uncertainty and potential threats to delivering project objectives successfully.
Risk management processes needs to be iterative on top of a project’s life-cycle and baked into project management planning and activities. Smaller projects often require minor work and periodic monitoring.
Complex projects need formalised methods to analyse, manage and report risks.
Good reporting depends on clear descriptions coming from all exposure, their affect on the projects, and potential costs for mitigation and inaction.
This ensures project personnel be aware of the potential impact risks might have on projects’ success and have absolutely prepared ways of minimise negative consequences.
Problems occur individuals limited visibility of risks at project and portfolio levels or methods to risk-management are ad-hoc and inconsistent.
Further problems can arise when risks are identified but recorded for a very high level associated with highly subjective risk ratings, in lieu of being the consequence of more substantive risk assessment.
When these issues arise, an organisation would make use of clearer, more formal and wide-spread systems for capturing and monitoring risks.
Project and Portfolio Risk Assessments
Project and portfolio risk assessments really should be undertaken to know their risk profiles and associated threats in achieving business objectives.
Assessments should identify the action promises to address the potential risks identified and allocate executive responsibility to regulate them. Additional risk assessments really should be carried out on selected projects (perhaps by prioritising them by value or complexity).
Risk management processes ought to be on-going and monitored after a project’s life-cycle.
Regular risk reports gives you Project Sponsors, Senior Responsible Officers and Steering Groups with better visibility of projects’ risk profiles.
Whether you’re liable for overseeing or building a project, robust project assurance can help you address the potential risks that threaten its success.