Risk Management In Projects

Every project has risk. There is always at least some level of uncertainty in a project’s outcome, no matter what the Microsoft Project Gantt chart on the wall seems to imply. High-tech projects are particularly risky, for a number of reasons. First, technical projects have high variation. While there are invariably aspects of a project that resemble earlier work, every project has unique aspects and has objectives that differ from previous work in some material way. Because the environment of technical projects evolves very quickly, there can be much larger differences from one project to the next than may be found in other types of projects. In addition, technical projects are frequently staffed “lean” and may also do their work with inadequate funding and equipment. To make matters worse, there is a pervasive expectation that, however fast the most recent project may have been, the next one should be even quicker. Technical projects chronically accept aggressive challenges to execute ever more rapidly. Risks on technical projects are significant, and their number and severity continue to grow. To successfully lead such projects, you must consistently use the best practices available.

Good practices come from experience. Experience, unfortunately, generally comes from unsuccessful practices and mistakes. People learn what not to do, all too often, by doing it and then suffering the consequences. Experience can be an invaluable resource, even when it is not your own.

Projects that succeed generally do so because their leaders do two things well. One is to recognize that, among the unique aspects of a new project, some parts of the work ahead have been done before and that the notes, records, and lessons learned on earlier projects can be a road map for identifying, and in many cases avoiding, the problems of earlier projects. The second thing that these leaders do well is to plan the work thoroughly, including the portions that require innovation, in order to understand the challenges ahead and to anticipate at least some of the potential problems. Using this plan, they guide and monitor the work.

Effective project risk management relies on both of these ideas. By looking backward, managers may avoid repeating past failures, and by looking forward through project planning, they can eliminate or minimize many future potential problems.

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