Part 3: Preparation and risk management
risk management
What meta-aspects of a project may impact its success? How are potential risks to your project’s success managed?
We’ve touched on identifying and planning for risks in the previous sections. This section will go more in depth about preparation and risk management.
This section of the module will discuss elements related to the triple constraint. The triple constraint consists of the time, cost, and scope of a project – all of which impact the project’s quality. If at any point the time, cost, or scope of a project change, the constraints (limitations or boundaries) of the project may also change.
Instruction: View the triangle on the left, and click on Time, Cost, or Scope on the right to see more details.
If the amount of time available for the project decreases, then the cost may need to increase (e.g., hiring more staff to compensate for lack of time).
All projects have a budget. If the budget changes (e.g., available funds decrease because something else costs more than expected) then the scope or the quality of the project will have to adjust to compensate.
Scope changes happen all the time! For example, with academic projects that are curiosity-driven, we may want to redirect our project when we find an interesting result or piece of information. If scope increases, we have to increase the timeline of the project so as not to overwhelm the current deadlines.
The triple constraints bind quality – sacrifices to any of the three boundaries can dramatically affect the quality of work, so we need to carefully consider all options! For example, if you decide to add a new project to your thesis work and add more research experiments (added scope), the costs associated with your thesis may increase and you will have less time available for other aspects of your research.
Sacrifices to any of these three boundaries can risk your project’s success.
Risk and Assumptions
A risk is any uncertain event that may occur that can impact your project’s success while assumptions are made about projects based on the knowledge and experience available about the project during the Initiation and Planning phase. Assumptions are often necessary to enable successful project completion. However, the more assumptions there are, the more risk there is to the project, and we need to plan accordingly for assumptions to fall through.
For example, we may assume that the budget allotted for a project will be available, but if that assumption is not accurate then the limited budget may limit the scope of work. Alternatively, we may assume that equipment will be available when we need it, but if it is booked, the project timeline may need to be extended while we wait. If both assumptions fail, quality and success of our project will likely decrease (recall the triple constraint). The risk is not the failure of the assumptions. The risk is the chance that these assumptions might fail and may impact our project’s success.
Source: Image by peoplecreations
The reality of research is that experiments can fail!
Therefore, when you have plans that deal with risk, they can be executed quickly if the risk ever becomes a reality (recall proactive vs reactive project management!). We can also allocate additional time in the schedule for tasks that inherently are at higher risk of failure.
Ideally, we make plans that help to prevent risk from occurring. However, some risks may be unpredictable or unavoidable. For example, your computer crashes, you can’t travel to collect data, supervisor or you is ill, or there is equipment failure. Even for risks that are not preventable, there are still things you can do to help mitigate or manage risk! Mitigating and managing risk includes creating a Risk management plan such as the one outlined below.
Risk Management Plan
Decide how to deal with the risk.
Accept it? Develop risk reduction strategies? Develop an alternate plan?
Part of the risk management plan is determining how likely a risk is to occur and how severe the consequences of this would be. This is called quantifying risk.
Quantifying Risk: Not every risk has the same consequences or the same probability! It is important to differentiate high risk and high probability items so that we can separate the large risks from ones that may not be as bad or damaging. A risk threat table, like the one below, can offer a convenient and visual way to assess the likelihood and consequences of a risk and helps prioritize risk planning.
| CONSEQUENCES | ||||||
|---|---|---|---|---|---|---|
| LIKELIHOOD | Insignificant | Minor | Moderate | Major | Catastrophic | |
| 1 | 2 | 3 | 4 | 5 | ||
| Almost Certain | 5 | 5 | 10 | 15 | 20 | 25 |
| Likely | 4 | 4 | 8 | 12 | 16 | 20 |
| Possible | 3 | 3 | 6 | 9 | 12 | 15 |
| Unlikely | 2 | 2 | 4 | 6 | 8 | 10 |
| Rare | 1 | 1 | 2 | 3 | 4 | 5 |
Based on this threat table, risks that have catastrophic consequences and are almost certain to occur would be ranked higher and appear red. Risks that are lower likelihood of occurring (rare) or have less significant consequences are ranked lower and appear green.
For example, a tornado coming through town and shutting off the power for three days is quite a major problem if you have food stored for your upcoming wedding. But the likelihood of this happening may change depending on where you live, the time of year, and whether you have a back-up generator that you could turn on if the power does go out.
Source: Image by upklyak
The level of detail contained within our risk plans often consider our risk quantification in order to prioritize our actions.