Today I want to talk to you about risk management and how you as a business analyst can help your project or help your company manage the risks that you see on a project.
How to Manage Risks on Your Project
This video I’m going to talk to you about the actual steps you should be taking when you’ve identified a potential risk that you see coming down the line.
Imagine you’re in this situation.
A situation where you see something that’s happening in the analysis world and your portion of the work is going to affect the project negatively in the near future.
Document the Risk:
1. The Risk
The very first thing that I’m going to do is to raise a risk. There’s a very clear definition of what the risk is and there’s an actual specific format that I’m going to talk about in which you need to document and raise that risk. The whole concept behind a risk is that it’s something that’s on your radar and you want to make sure that the project manager is monitoring it. So they’re taking mitigation actions to make sure that it doesn’t ever come about.
- What is the risk?
- Is it something that’s going to affect the cost of the project?
- Are we going to need more people?
- Is it something that is schedule-related so is it likely to push out the schedule if we don’t take some sort of action?
- Is it going to affect the scope or is it going to affect the quality of the product that we’re trying to deliver?
2. Likelihood of Risk
The likelihood tells you how likely it is that the risk is going to occur if you don’t take any further actions.
- How likely is it that the risk will occur?
- What is the likely hood that the risks I’ve described are actually going to happen?
- Risks don’t always take place.
The whole concept behind a risk is that it’s something that’s on your radar and you want to make sure that the project manager is monitoring it. So they’re taking mitigation actions to make sure that it doesn’t ever come about.
3. Impact of Risk
And so this is more of a gradient of impact.
- Whether it is a high, medium or low Impact?
- What is going to be the impact on the project?
- Is going to have a high impact on the schedule?
- Is going to have a medium impact on the cost?
I want to talk about the difference between the mitigation options and the contingency plan. Both mitigation and contingency are things that the project should be doing. There are options for what the project can do. But they are somewhat different for one another.
4. Mitigation Plan
On a lot of projects, you’ll have a status called for example it is imminent or it’s uncertain it’s a certainty that this risk is going to happen. So it’s almost a one hundred percent chance that it’s going to happen if we don’t take any mitigating steps.
And that is the next column which is the mitigation plan.
So far we have the Description, Likelihood Impact and then the next thing that you have to do for the risks that you’re raising is to provide the project manager with some Mitigation Options.
The mitigation options are the things that you have to do now in order to prevent the risk from occurring.
So for example, if I go to the project manager and I say; I don’t have enough time to perform the analysis on this project.
One mitigation action that I can suggest to the project manager is to say: allocate one analyst on to the project so that we can get the work done properly within the schedule that you’re looking for.
It’s up to the project manager at that point to decide whether they have the availability of resources or whether they can make a case for having an extra analyst on the team. But what you’ve done in that case is that you’ve made it clear what the action is so that the risk of certain deadlines are mitigated.
So all the mitigation actions are things that happen to prevent the risk from happening and they all have to happen before the risk actually comes about.
The contingency plan is the flip side of that.
5. Contingency Plan
The next column is what’s called a contingency plan.
Contingency plans are the things that the project should be doing when the risk actually materializes.
Now it is the job of the project manager to maintain what’s called the risk register and so the project manager has risks that are outside your portion of the work that was in development. They have risks that come about and pop-up.
What you’re doing as an analyst is that you are raising that risk to the project manager so that the project manager has it on their radar. They have better visibility and they have some options of things they can do to prevent things from happening.