Each week, project management veteran Tom Mochal provides valuable advice about how to plan and manage projects. Tom first describes a common problem scenario, based on real-life situations. He then offers a solution, using practical project management practices and techniques.

The dilemma
Meg is launching a project that involves the implementation of a construction cost-estimating package for the facilities department. When I saw her for the first time, she had completed most of the project definition, but she was stumped trying to gauge the level of risk on the project.

“I’ve been talking with the business customers and with my team members,” Meg explained. “They keep telling me that this is a low-risk project and that I shouldn’t be worried. But I’m very uncomfortable right now.”

I asked why this was considered a low-risk project.

“The people from facilities know their business very well,” Meg said. “They do estimating today using spreadsheet templates. They believe the package will be much better and that it can’t be that complicated. The IT project team just wants to get going. They think they can just overcome any problem that might pop up.”

“That’s the kind of approach that can get you into trouble,” I warned. “Sure, problems can be fixed, but at what cost to budget, schedule, and quality? Why, exactly, are you uncomfortable?”

Risk? What risk?
Meg explained that she had been assigned to the facilities group for six months, and the two members of her team were even greener. “This is also my first opportunity to manage a substantial project,” she said. “I’ve also read about other companies having problems with this particular release.”

Meg was right to be concerned about the overall project risk, but it seemed she was having a hard time isolating the risks and articulating them. I shared a risk-assessment form that I use, which contains characteristics of projects that bring with them inherent risks. Once she identifies all the high-level risks, Meg can put risk plans in place to mitigate them.

Mentor advice
Sometimes it’s easy to look at a project and see risks. For instance, you may have a fixed deadline that will be hard to achieve, or you may have a need for specialists that you know will be hard to find. However, there are some characteristics of projects that by their very nature imply higher risk. Take project size, for example. It should make sense that a project that takes 500 effort hours has less inherent risk than one that takes 5,000 effort hours. More effort hours mean more people to manage, more budget considerations to control, and more chances for turnover. In general, there is more of a chance for people-related problems.

With Meg’s project, we know that she and her team are fairly new to the facilities department and therefore lack a deep understanding of the business. This makes for more risk than if they had experienced people on their team. This is also Meg’s first opportunity to manage a substantial project. Her lack of experience could be a big risk. Lastly, although there are many benefits to utilizing package solutions, there are also inherent risks, as evidenced by the stories Meg has heard about other companies having problems with the new release.

There are certain characteristics that bring about risk—no matter what the project. These inherent risks can be placed in a checklist for the project managers to review when deciding what risks are applicable to their project. Having inherent risk does not mean that the project does not go forward. It simply means the project manager should focus risk plans on those areas to minimize the potential for problems during the project.

Project management veteran Tom Mochal is director of internal development at a software company in Atlanta. Most recently, he worked for the Coca-Cola Company, where he was responsible for deploying, training, and coaching the IS division on project management and life-cycle skills. He’s also worked for Eastman Kodak and Cap Gemini America and has developed a project management methodology called TenStep.

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