Tuesday 1 February 2022

Quickly establish Project Risk Management

only by properly controlling the risks can the project be carried out as planned to meet the target requirements. the article systematically shares the project risk management and hopes to be beneficial to you.

"a project risk is an uncertain event or condition that, when it occurs, affects the scope, schedule, cost, and quality of one or more project objectives. project risks may have one or more causes and, if they occur, may have one or more impacts. we believe that project risk stems from uncertainty in any project. ”

"the cause of the risk may be a known or potential need, a hypothetical condition, a constraint or a condition. the team should be committed to active and continuous risk management throughout the project. throughout the project process, all levels of the organization should intentionally and proactively identify and effectively manage risks. ”

the above two paragraphs come from the pmbox book. in many small and medium-sized companies, pms often also play a project management role, so how to control project risks has become one of the skills that a pm must learn. only by properly controlling the risks can the project be carried out as planned to meet the target requirements.

before carrying out risk control, we must first know which nodes the risk mainly comes from, and comb it into a document form for use in project risk analysis.

basic documentation required for the project risk management process:

a directory of documents required to identify project risks

risk management plan

the risk management plan is an integral part of the project management plan and describes how risk management activities will be organized and implemented.

the risk management plan should include:

  • identify the methods, tools and data sources that will be used in project risk management.
  • identify the leaders and supporters of each activity in the risk management plan, as well as the members of the risk management team, and clarify their responsibilities.
  • funds are estimated on the basis of allocated resources and incorporated into cost benchmarks, and a programme for the use of contingency and management reserves is developed.
  • determine the timing and frequency of implementing the risk management process during the project life cycle, develop a plan for the use of the schedule contingency reserve, identify risk management activities and incorporate them into the project schedule.
  • the risk management plan is the main basis for our risk management, so we should write a plan before the start of the project, and in the project and the project acceptance stage, we must carry out risk control according to the plan.

risk deconstruction:

The Risk Breakdown Structure (RBS) helps project teams identify multiple causes of risk as they identify them.

the risks of a project can be divided into four categories: technical, external, organizational, and management.

cost management planning

describes how project costs will be planned, scheduled, and controlled.

the cost management plan includes:

  • units of measure
  • precision
  • accuracy
  • organize program links
  • controls the threshold
  • performance measurement rules
  • report format
  • process description, a written description of each other cost management process.
  • other details

Usually PM rarely touches on the issue of design project costs, as this is mostly considered by the boss. However, because when the project is risky, it may affect the cost of the product, so we also need to control the cost of the project. In the project management manual/book, we are usually given multiple cost management items, and the PM needs to find out the projects that need to be managed according to the actual project.

schedule management planning

helps to understand project time (schedule) goals and expectations that may be affected by risks (known and unknown).

as a project manager, the most worrying thing is that the project extension cannot be delivered on time, the extension of self-developed products may miss the opportunity to go online, the extension of outsourced products may cause breach of contract or even compensation, and the impact on the schedule will undoubtedly cause cost changes, so schedule management is particularly important.

quality management plan

defined quality measurement and measurement benchmarks.

when the pm is developing the project, it should also start to pay attention to the testing process at the time of project acceptance. most products will continue to revise the development plan during development, so the pm needs to constantly adjust the acceptance criteria under the framework of large quality benchmarks. clarifying quality standards before development also helps developers to exercise quality self-control during the development phase.

human resources management plan

provides guidance on how to define, staff, manage, and ultimately demobilize human resources for a project. this also includes roles and responsibilities, project organization charts, and staffing management plans.

in product development, changes in project team personnel will undoubtedly have a more or less impact on cost, schedule, and quality. to avoid uncertain impacts, pms need to manage the assignment of project team personnel. clarifying the responsibilities of each person can quickly carry out the handover work when the personnel leave the company, ask for leave, etc., and it is also convenient for the new team to take over and minimize the risk of personnel changes.

scope benchmark

what-if conditions for the project.

especially in outsourcing companies, pms need to consider many assumptions when designing products. what are the assumptions? for example: we added 4 programmers when the project team was formed, and we thought that these 4 programmers could complete the project and calculated the working hours according to their work efficiency (assumptions); but after the project started, we found that one programmer was not skilled enough to complete the work on time, and the total working hours would become more (problems). at this time, we need to consider the treatment method when such a problem arises."

activity cost estimate

an activity cost estimate is a quantitative estimate of the costs that might be required to complete a progress activity.

differentiate between cost management and activity cost estimation. for example, in the past, most companies focused only on bidding and ignored the cost of bidding.

activity duration estimate

facilitates the identification of risks associated with the emergency reserve time of the activity or the entire project.

activity duration estimation is all about estimating the most likely time, cost, and resource requirements required to complete each activity.

register of stakeholders

stakeholder information can be used to ensure that key stakeholders, particularly sponsors and clients, are involved in the risk identification process through interviews or other means,

  • project file
  • project charter;
  • project schedule;
  • progress network diagram;
  • problem logs;
  • quality checklist;
  • other information useful for identifying risks
  • procurement documents

if the project requires procurement of external resources.

business environment factors

  • publicly available information, including commercial databases;
  • academic research materials;
  • publicly released checklists;
  • benchmarking data;
  • industry research materials;
  • risk attitude.
  • organize process assets
  • project documentation, including actual data;
  • process control data for organizations and projects;
  • the format or template of the risk description;
  • lessons learned
  • how to identify project risks
  • document review

conduct a structured review of project documents, including various plans, assumptions, past project documents, agreements, and other information. the quality of the project plan, and the degree to which those plans match the project's requirements and assumptions, can be an indicator of the risk of the project.

when the pm obtains the documents mentioned above, it should start a document review to find out whether there are any contradictions or omissions between the documents.

information gathering technologies

1. brainstorming.

this is a common information gathering technique for project teams, but the pm needs to pay attention to organizational processes. long periods of unorganized brainstorming are only a waste of time, do not get a solution to the problem, and even generate more problems. when we get multiple options, we need to finalize one, and others can disagree, but to ensure obedience to the outcome.

2. delphi technology.

delphi technology is a way to organize experts to agree. project risk experts are involved anonymously. organizers use questionnaires to solicit input on important project risks, then summarize experts' responses and feed back the results to experts for further comment. after a few rounds of this process, an agreement may be reached. delphi technology helps mitigate data bias and prevent any individual from having an undue impact on the results.

3. interviews.

interviews with experienced project participants, stakeholders, or subject matter experts can help identify risks.

4. root cause analysis.

checklist analysis

risk identification checklists can be prepared based on historical information and knowledge from similar projects and other sources in the past. during the project closure process, the checklist should be reviewed and improved in the light of new lessons learned for use in future projects.

what-if analysis

hypothesis analysis is the test of the validity of hypothetical conditions in a project and the identification of project risks due to inaccuracies, instabilities, inconsistencies or incompleteness.

schematic techniques

  • causal diagram. also known as ishikawa diagrams or fishbone diagrams, they are used to identify the cause of risk.
  • system or process flowchart. shows the interconnections and causal conduction mechanisms between the elements of the system.
  • impact graph. graphically represent causal relationships, chronological sequences of events, and other relationships between variables and outcomes.


This technique takes a closer look at the project from each strength, weakness, opportunity, and threat to take into account the risks that arise internally.

every project is not perfect, and the pm understands the disadvantages and threats of the project itself in order to avoid risks in a timely manner.

expert judgment

experts with experience in similar projects or business areas can directly identify risks. the project manager should select the relevant experts and invite them to point out possible risks based on past experience and expertise. attention needs to be paid to the biases of experts.

the above is only a preliminary introduction to project risk management, and each of them contains more information in practical applications. the pm does not need to apply the entire risk management process to a project, the pm can be adjusted according to the actual situation of the project, and unnecessary documentation is eliminated.

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