Identifying Risks in Project Management

Jul 12, 2024

Identifying Risks in Project Management

Overview

  • Project Management Body of Knowledge (PMBOK) recognizes 6 tools and techniques for risk identification, though this lecture covers 14.
  • Effective risk identification involves expert judgment, data gathering, data analysis, interpersonal skills, prompt lists, and meetings.

1. Expert Judgment

  • Frequently used tool in project management.
  • Experts with specialized knowledge of similar projects or business areas contribute to risk identification.
  • Important to consider expert bias.
  • Can be used alone or in conjunction with other tools (e.g., interviews, focus groups).

2. Brainstorming

  • Data gathering technique to generate a comprehensive list of project risks quickly.
  • Multidisciplinary teams and external experts often participate.
  • Categories like the Risk Breakdown Structure (RBS) can guide the process.
  • Facilitates rapid idea generation but needs clear descriptions to avoid incomplete ideas.

3. Checklists

  • Used as reminders, not exhaustive or standalone tools.
  • Developed from historical information, Lessons Learned, and organizational process assets.
  • Should be reviewed and updated regularly.

4. Interviews

  • Conducted with experienced project participants, stakeholders, and subject matter experts (SMEs).
  • Environment of trust and confidentiality is essential.

5. Root Cause Analysis

  • Typically used for discovering underlying causes of problems and developing preventive actions.
  • Can identify threats and opportunities.

6. Assumption and Constraint Analysis

  • Projects are based on assumptions and constraints found in the scope baseline and project estimates.
  • Analyzing these can reveal potential risks if assumptions are found to be invalid.

7. SWOT Analysis

  • Evaluates Strengths, Weaknesses, Opportunities, and Threats.
  • Identifies risks from internal organizational strengths and weaknesses.

8. Document Analysis

  • Involves a structured review of project documents to identify risks.
  • Reviews plans, assumptions, constraints, previous project files, contracts, agreements, and technical documentation.

9. Facilitation

  • Interpersonal skill enhancing the effectiveness of risk identification techniques (e.g., brainstorming, interviews).
  • Ensures focused, unbiased, and clear risk identification.

10. Prompt Lists

  • Pre-determined lists of risk categories that can generate risk ideas.
  • Examples: PESTLE (Political, Economic, Social, Technological, Legal, Environmental), TECOP (Technical, Environmental, Commercial, Operational, Political), VUCA (Volatility, Uncertainty, Complexity, Ambiguity).

11. Meetings

  • Specialized risk identification sessions, like risk workshops.
  • Often facilitated and include necessary stakeholders (e.g., project sponsor, SMEs, customer representatives).

12. Cause and Effect (Ishikawa/Fishbone) Diagrams

  • Diagrammatic representation of causes leading to a risk impact.
  • Identifies sub-causes and categorizes risks.

13. Influence Diagrams

  • Shows relationships between events and decisions in a project.
  • Can identify risk sources when combined with sensitivity analysis or Monte Carlo simulation.
  • Similar to System Dynamics models.

14. System Dynamics

  • Application of influence diagrams to represent entities and information flows in a project.
  • Shows the impact of risk events on overall project outcomes (e.g., cost, schedule).

15. Force Field Analysis

  • Identifies driving (positive) and restraining (negative) forces affecting project objectives.
  • Adapts change management context for risk identification.

16. Failure Mode Effects Analysis (FMEA)

  • Methodology for analyzing potential reliability problems early in the development cycle.
  • Used to assess potential operational impacts and identify mitigation actions.

17. Pre-mortem

  • Meeting to predict project failure reasons and identify resulting threats.
  • Group imagines project failure and success scenarios to identify threats and opportunities.

18. Affinity Diagrams

  • Groups risk ideas into similar categories to uncover missing risks.
  • Useful for visualizing and identifying overlooked risks.

19. Risk Breakdown Structure (RBS)

  • Hierarchical breakdown of project risk sources.
  • Serves as more than just a risk database, helping to categorize and identify risks.
  • Used with meetings, interviews, and brainstorming sessions.

20. Critical Path Analysis

  • Identifies risky activities on the project schedule with zero float.
  • Important to focus on these activities as any delay will directly impact the project completion date.

21. Delphi Technique

  • Reaches consensus among anonymous experts to identify risks.
  • Prevents bias and is used for both risk identification and requirements collection.