There are numerous risks that have the potential of causing a project to be looked upon as a failure. The primary categories of these risks according to the PMBOK are: Technical, External, Organizational, and Project Management. (Project Management Institute, 2008, p. 280) Within each of these primary categories reside many subcategories. Within the Technical risk type we have the subtype of Requirements, Technology, Complexity and Interfaces, Performances and Reliability, and Quality. Within the External risk category we find the sub types of Subcontractors, Regulatory, Market, Customer, and Weather. We find under the Organizational category sub types like: Project Dependencies, Resources, Funding, and Prioritization. Lastly, within the Project Management category we find the sub types of Estimating, Planning, Controlling and Communication. (Project Management Institute, 2008, p. 280) There are several other categories and sub categories that you may find within other Risk Breakdown Structures (RBS), however this is the list that he Project Management Institute has deemed noteworthy for general project management risks. Creating and RBS is almost a necessity to any project. It reminds those involved what Risk Identification areas to think about. (Ritter, 2008) Now let’s describe these a little more.
One of the primary risk categories are technical risks. Again these include risks such as technology its self not being able to perform the way we had expected. Another example would be the technology that is required to complete a project like a router to setup a network may be found as dead on arrival to the new site. Yet another example that we find within this category would be potentially a system not being able to meet all the requirements as expected and needed to complete the project.
External factors may, and should, also be viewed as risks. These include factors such as subcontractors not showing up for work or not having the real experience and knowledge in order to fulfill the requirements of the project within a timely manner. Another example that I personal ran into two weeks ago for a site more in NYC was that in NYC there are many property codes that needs to be signed off by larger property managers that move very slow. In order to work with them in a timely manner often times requires knowing the right people that can get the job done. Another factor that would fall into this category that we could have faced during this move would have been weather conditions. Often it is not a good idea to move computer equipment between sites in the rain. Luckily, it did not rain until the day after the move.
The next category we will discuss more in-depth is that of Organizational risks. An example of an organizational risk that many of us find within project is that of needing a deliverable from one project for the current project. If that project is running behind with their timeline, that will affect your project’s timeline, unless it is properly accounted for. Another example we find within this category is that of funding. A manger or CEO may decide due to poor financial status of the company that your project now only receives 70% of the projected funds and yet you are still required to produce the same quality results. Most often in order to accomplish this you may be required to take more time.
The last main category that the PMBOK discusses is that of project management itself. This categories is a big one if not properly accounted for and that about the project may be doomed from the start. Within this category we find tasks such as estimating of budgets, time, materials, etc. We also have tasks such as controlling and monitoring the status of the project and the scope of the project that fall into this category. Proper planning of these and other tasks as well as proper communication with the project team members and stakeholders are some of the most critical sub categories we find within this category.
These risks need to be managed by first accounting for them. Secondly, after you have accounted for the risks you need to decide the potential risk that they bring to the project by ranking them by first how likely they are to occur and secondly how much the impact to the project they will cause if they occur. Then we will create contingency plans for those risks that are more likely to occur and more likely to cause a great deal of trouble for the project if they occur.
There are many methods to deal with risk. These are first to avoid risk. In order to accomplish this it requires to typically change the project plan. If we cannot fully avoid the risk we may wish to at minimum mitigate the risk so that it is less likely to occur or will be less likely to fully disrupt the project. Another option would be to transfer that risk to an outside organization via consultants. This method in my opinion is not always a good option as the end result still may be you without a completed project and you do not have control any longer over those consultants. The last option that you have it to not avoid or mitigate or transfer, simply accept the risk and plan for it to happen if it does. (Project Management Institute, 2008, p. 304)
Project Management Institute. (2008). A Guide To The Project Management Body of Knowledge. Newtown Square: Project Management Institute, Inc.
Ritter, D. (2008, October 11). Risk Breakdown Structure (RBS). Retrieved August 22, 2010, from Project Management: http://certifedpmp.wordpress.com/2008/10/11/risk-breakdown-structure-rbs/