Training objective
The objective of this practical and simplified mini-training video is to enable you to effectively identify and manage project-related risks and issues.
What you’ll learn
After watching this training video, you will understand the key difference between project investment and delivery risks, why it is important to manage these two types of project risks in an investment lifecycle, and what are the common project investment and delivery risks faced by project managers and teams.
Transcript
[Slide 3] Putting into perspective and the investment lifecycle
Project management occurs after the assessment and approval of the opportunity or investment and the development and approval of the proposal or business case as the project progresses through the investment lifecycle. These review gates are important to ensure that projects are sufficiently evaluated and approved before they progress to the next phase of the investment lifecycle.
An investment logic map and concept brief could be developed and approved before proceeding to the writing of the business case. These documents provide the necessary information and foundation for the development of the business case.
During the proposal stage of the investment lifecycle, a business case and benefits management plan could be developed and approved to give sufficient clarity to the project.
The project is approved and implemented during the third phase of the investment lifecycle. Upon the successful completion of the project, an evaluation of the project is conducted to determine whether the project has delivered its intended benefits. At this evaluation phase, a benefit report is produced and approved.
[Slide 4] Two key elements of a successful project
As such, project success can be measured in two ways:
1. Project efficiency – This element of project success is measured against the widespread and traditional measures of project performance of meeting timeline, budget, scope, and requirement goals.
2. Business results – As projects are initiated for business reasons and are expected to deliver business results from an investment perspective, this element of project success is measured against the alignment of project objectives with strategic objectives and the delivery of business results as defined or expected by key stakeholders.
Project risk management is the process of:
1. Identifying risks and issues related to the efficient delivery of the project and the achievement of business results.
2. Assessing their causes, likelihood, and consequences taking into account existing mitigations.
3. Developing and implementing plans for maximizing opportunities or minimizing any negative effects or threats.
From a project risk management perspective, the project manager and team members must identify and manage two different types of project-related risks:
1. Delivery risks that relate to project efficiency.
2. Investment risks that relate to business results.
[Slide 5] Six common project investment risks
As projects are undertaken to deliver specific business results or investment outcomes, project objectives must also be aligned with strategic objectives. This is where the project team must effectively translate and clearly link project deliverables to investment outcomes.
At this business results level, project team members must identify and manage investment risks and issues that impact the achievement of both the project objectives and business results.
When the team has efficiently delivered the defined project objectives that are also aligned with strategic objectives, the realized project deliverables can be translated and linked to business results.
The six most common project investment risks faced by project teams.
1. Objectives – A lack of direction and unclear project goals, objectives, and milestones are among the largest reasons why projects fail. It can be the result of poor stakeholder management or a lack of understanding of what is required to be delivered.
2. Alignment – There is no alignment of project objectives to strategic objectives. Benefits realization management is a powerful way to align projects to the overarching organizational strategy, where projects are undertaken to implement a strategy. It can be the result of the lack of clarity of the strategic objectives to be achieved.
3. Executive sponsorship – The lack of an actively engaged executive is one of the key causes of project failure. Clarifying who that accountable officer is will be crucial for the project’s success. It can be the result of poor governance and the lack of personal accountability.
4. Accountability – Project team members may not understand what is expected from them. Role clarity ad responsibilities are important elements of good project management. It can be the result of unclear expectations and a lack of clarity over roles and responsibilities.
5. Communications – Ineffective communication can negatively impact project execution. It can be the result of the lack of understanding of business benefits for doing the project or who are the key project stakeholders.
6. Talent – An under-trained or inexperienced project manager or member who has insufficient understanding of the processes, tools, and disciplines of project management, can have negative consequences on project outcomes. It can be the result of hiring the wrong people or not having the right quantity of qualified or skilled team members.
[Slide 6] Six common project delivery risks
At the project efficiency level, project managers and team members must identify and manage delivery risks and issues impacting the project’s scope, cost, time, quality, stakeholder satisfaction, and resources.
The level of certainty should progressively increase as the project moves through its life cycle towards the completion date. Project managers seek to minimize unnecessary change, risks, and issues. They should be focused on producing optimum deliverables or outputs efficiently.
The six most common project delivery risks faced by project teams.
1. Scope – Scope creep refers to changes, continuous or uncontrolled growth in a project’s scope, at any point after the project begins. It can be the result of poor change control, lack of proper initial identification of what is required, weak project manager or executive sponsor, or poor communication between parties.
2. Cost – Cost overruns can lead to reductions in project scope or quality. It can be the result of inaccurate estimates, design errors, administration errors, poor site management, or not hiring the right team.
3. Time – Failing to plan or schedule or staying on schedule can lead to project failure. It can be the result of financial problems, unrealistic contract durations, poorly defined project scope, variations, or underestimation of the project cost.
4. Quality – The delivered products and services may not be fit for their purpose or do not meet specifications. It can be the result of underestimation, lack of stakeholder engagement and communication, or poor project management.
5. Stakeholder – These risks include the failure to identify stakeholders; failure to understand stakeholder expectations, needs, and concerns; failure to engage or consult stakeholders; and failure to keep stakeholders updated. It can be the result of a lack of engagement and communication.
6. Resources – The lack of resources can impact the quality and completion of projects. Resources can include financing, time, and skilled workers. It can be the result of poor planning, new technology, or unforeseen events.