A project’s risk management strategy is subject to two main constraints:  time and documentation effort.

As every PM knows, time is the scarcest resource they have in their project.    To be effective, the Risk Management process must be efficient and require only a minimal attention.

riskmp project manager running out of time

Risk Management for Construction – Project Management time and documentation

An additional constraint is the effort expended in documentation. Any process in project management that requires significant resources for documentation will normally remain on the shelf.

A successful project’s risk management process is governed by the parameters of ‘limited time’ and ‘minimal documentation’

The goal of any risk management system is to

  1. Get PM’s thinking about Risks and ways to mitigate them in advance
  2. Get PM’s to understand their Plan B, C and D intuitively
  3. Encourage PM’s to investigate opportunities and options
  4. Facilitate follow up on PLAN B and C and D as things change.

There are two distinct steps to implementing Risk Management in your company practise.  The first is get the PM’s thinking about risk and uncertainty in the project; essentially to ensure that everyone understands the conceptual framework.  The second is to provide simple tools for developing the risk management plan during the planning and scheduling stage of the project, and communicating, recording, following up on Plan B, C, and D during the project execution stage.    Another important component of the system is the ability to communicate actuals from the site and assess their impact.  Again, this communication must be simple and efficient.

So here are the recommendations:

  1. Training and refreshers — Every PM should have a solid understanding of Risk Management and how it applies to project management and the benefits of Risk Management to the project and the company.
  2. Tools – In this age of computers, software that allows the project manager to
    • Formulate a project plan easily
    • Communicate that plan to the team
    • Incorporate changes, especially as the project progresses
    • Incorporate communication from remote sites and team members.

Our solution to the tools question is  RiskMP 

  1. Management leadership. With management support for the time and attention spent on risk management, the process can succeed and open the company up to the benefits of Risk Management including decreased costs and improved processes.

 

Advertisements

HOW TO IDENTIFY RISK

“There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.” – Donald Rumsfeld

During the development of the project plan, during the estimating process and during scheduling, experienced personnel can predict risk based on previous projects.  Risk is inherent in the development of estimates in terms of time and cost, in scheduling in terms of cost and in the plan overall in the determination of scope and resource requirements.  Risk stems from current and known circumstances.  What is required then, in conjunction with an estimating and project planning tool such as MS Project, is a tool to collect and record this risk information as it occurs to estimators and planners. knownknowns

Known Knowns:   The things that we know about are, for the most part, mitigated for in the project plan.  We know from experience or circumstance that these issues will come up and we plan for them in our estimates of time, costs, resources and materials.  It is relatively easy to plan these things as we know that we will be addressing them in the future.  A good project plan will already incorporate these risks into it.  Sometimes, the variability is significant, and we incorporate these into an initial risk management plan.

Unknown Knowns: There are risks that we mitigate and plan for unconsciously.  They can be built into our company processes, ‘the way things have always been done’;  things that we know about and have mitigated for in the project plan but are unrecognized as risks.

Known Unknowns: There are areas in a project estimate, plan and/or schedule, that have uncertainty associated with them.  These areas of uncertainty are the known unknowns and are the most significant part of the risk management process.  We know we do not know what will happen, but we want to plan for the eventualities, to minimize bad consequences and maximize benefits.  Risk management allows us to do this.

Unknown Unknowns :  What you truly do not know about as so cannot mitigate against generally  comes back to bite.  These are outside our realm of experience and therefore ability to predict and mitigate.

For more information on how to identify risk and creating a risk management plan, go to riskmp.com   or join us in a workshop … across Canada ….  Risk Management Workshop.

Risk and Large-Scale Projects

Risk is an incontrovertible factor in any project. It only stands to reason that, the larger the project, the more room there is for risk. Risk-causing issues within large-scale projects may occur at any level of the process and (as there are far more people/businesses/trades involved in a large-scale project than a small one) as a result of the actions of any of the entities involved. Let’s explore how issues may arise at the hands of the client, the architect (or designer), the project manager and, of course, external forces.  largescale projects

The client (proprietor – or proprietors – there may be more than one in the scheme of a large-scale project) can unwittingly up the risk factor from the get-go in numerous ways – especially if he is inexperienced and unknowledgeable with respect to what goes into a construction project. The client may have an idea of what he wants, but may lack the insight to fully understand the ramifications of achieving optimal results. In other words, his expectations might not be in line with the reality of the undertaking of the process. Furthermore, it’s not unheard of for a client to change his mind repeatedly throughout the process – what he thought he wanted doesn’t actually measure up to what he sees as things progress. He might be completely disorganized and in turn, cause chaos to ensue on the project site.

An unrealistic timeline is most often a significant risk factor precipitated by the client. It’s therefore crucial that a suitable, realistic timeframe is worked out between the client, the architect (or designer) and the project manager. It is the job of the architect and/or project manager to let their client know what is achievable and what is not. That said, it’s the responsibility of the client to define (to the best of his ability, based on his own research as well as market requirements) the expected performance and quality of the project.

It’s imperative that everyone be on the same page!

Risks relating to the architect or designer are not uncommon. Design variations, inaccurate cost estimates, inadequate scheduling and insufficient site information can all incite unexpected risks. A skilled architect will do his homework – inspect the site to ensure that its conditions are agreeable and talk at length with the client to ensure that all expectations are doable.

Risk-causing factors may also be attributed to the project manager if he underestimates time or cost, or if he fails to hire appropriately capable team members and subcontractors. All it takes is one rogue cog in the wheel for a project to derail. And again, it’s the job of the project manager to ensure that he is fully in tune with his client’s vision and to ensure that his client is fully aware of exactly what part of that vision is in the realm of possibility, given the budget and allotted timeframe.

Lack of coordination between any of the project participants can lead to risk. Continuous communication between highly skilled parties is essential to the success of any project – especially one that is large-scale.

There are also associated risks which are often out of the control of the above-mentioned stakeholders. Excessive government approval procedures and government bureaucracy can be unforeseen but disastrous to a project. It’s therefore in the best interests of the project team members to maintain an ongoing, affable relationship with government officers to increase the likelihood of a friendly environment and therefore more uncomplicated approval procedures and shortened approval timelines.

Risk in any large-scale project is a given. The more you can do to mitigate risk, the better chance you have of completing the project on time and within budget. Risk Management can help you do that. Let us show you how to leverage industry best risk management skills and how to use RiskMP software to facilitate risk management for all of your future projects. To join one of our hands-on workshops, please visit:  https://escomputertraining.com/courses/details/industry/9/course/43