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Helpful Risk Mitigation Principles for Projects

Updated: Oct 26, 2018


Assumption

  1. You have identified a potential opportunity to improve your business by taking on a project

  2. The project most likely requires some significant Supplier costs (e.g. Software platform and services)

  3. There are uncertainties with all projects from both learnings around the Supplier offerings and the Customers environment and detailed requirements understandings.

  4. These uncertainties become more certain through the project

  5. As the uncertainties become certain, they may have a big impact on the expected benefits i.e. the business case it as risk

  6. You acknowledge the risk but what steps should you take to manage risk and limit the damage


Principles

Studies show more than 60% of IT projects fail. There are common mistakes and reasons. There are a few key principles that I believe in strongly. These Principles can save your business enormous pain:


1. You must conduct a solid Business Case. This should include:

  • As Is Measures - Analyse and document “As Is” current state Time and Costs

  • To Be Model Measures - Same for proposed “To Be” state

  • Document the scope (what needs to be done) and transforming from “As Is” to “To Be” state (so you can share with potential suppliers for costing)

  • Assess suitable suppliers and ask for estimate costings

  • Document a Business Case – It should demonstrate that the project is Feasible

  • List all the significant risks to the project as part of the original Business Case


2. Start with a small Commitment – Trust must be earned, Risks must be managed, uncertainties must become more certain

  • Your Project Sponsor (e.g. CEO) should know your broader vision and targeted Business Case benefits but your first request is only to seek approval to take a small next logical step on the project (NOT full commitment). You are only asking for approval to sure up the assumptions, uncertainties and risks so you can review the business case again and move it from a feasible state to something more solid

  • Your supplier must have a Pricing model that enables you (without penalty) to start small with low entry point and scale as confidence grows and Risks are addressed

  • If a Supplier is not willing to engage this way, be prepared to walk away

Note: Trust in the Business Case, the Supplier and even your own background work must be earned and confirmed throughout engagement. As the project progresses, you quickly learn valuable insights and lessons, some of which may have significant impact to business case benefits and continued feasibility of the project



3. Phase 1 (version 1) - Document a version 1 mini project, ensuring all the scenarios of major risks are part of the scope. It is important this phase 1 scope is agreed before seeking full sponsorship approval

  • After the Phase 1, review the success and the lessons in relation to risk and review the business case

  • Assess whether the project is still feasible

  • If so, outline version 2 scope, outlining the second level of risks that could put your project and business case at risk

  • Scale Up to the next increment of commitment with Supplier and overall project costs

  • Perform the next iteration of project and once again review success and business case confidence

Note: After this point, you should still be able to Cancel the project limiting the damage if outcomes and benefits or risks realisations have not gone the way you needed


4. Continue to Incrementally build and Incrementally scale Investment

  • Eventually you will scale to full commitment and related Supplier costs (e.g. full license costs) but now you have confidence, trust has been established and confirmation in the quality of your analysis and confirmation in the Suppliers products and services


5. Requirements Analysis – A huge risk – Get the right team and approach

  • Keep the initial requirements team small – the business people chosen must have significant knowledge to represent what the business does and needs

  • Get a great Senior BA on the project – The questions they ask are more important than the answers. A good BA will think with operational, commercial and technical consideration and will challenge everything they hear with another great question. They will pull out the true requirements efficiently and have the skills to translate this to technical language

  • They will naturally review each requirement in terms of the benefits it will bring and determine if this should in fact should be a requirement of the solution at all


6. Project Management should focus more on Business case benefits than low level project Tasks. The Project Manager and the Project board must identify what needs to measured and seen to ensure they really know the state and health of the project. Performance Visibility is crucial

  • We often get absorbed with managing the tasks of a project. However, the most important thing to manage and measure is the realisation of the business case and benefits

  • You must identify the measures you need from various parts of the project/teams to govern the project and measure the overall performance and related Business Case

  • The measures you get from various teams involved in the team must be factual and not open to subjective opinion measures


7. Communication & Co-ordination – A project manager with great communication skills is crucial

  • Regular Project Team Updates – People are busy, make it sharp and clear. Highlight achievements last period, plans for next period and use Traffic Light Indicator in terms of project performance v’s expected (normally in terms of Time, Cost, Quality and Risk). Leave a section for highlighting Risks

  • Agree with Project Board the Measures and Indicators and Exception Thresholds at which Escalation should be triggered


Please feel comfortable to share your challenges with me. My e-mail is: stuart@4gm.com.au.

Stuart Popplewell

4GM Managing Director


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