PRINCE2 has constantly had a solid, but basic way of dealing with risk. With the most recent version, released in June, numerous superb ideas and concepts have been introduced. Here are the best seven:
1. Having a Risk Management Strategy
In my expertise risk management is something which is talked about a lot but rarely performed. One issue is that people don’t know who must be doing what. To help with this PRINCE2 2009 introduces a Risk Management Technique. It outlines the way in which risk is going to be identified, evaluated and dealt with in a project. It shows who ought to be responsible for carrying out the various risk management roles. It also sets out just how much risk an organisation is willing to bear. The technique is put together at the outset of the project; everybody reviews and signs up to it.
2. Risk Identification Methods
Where do you commence with regards to identifying all of the potential risks within your project? The new manual gives quite a few approaches. These consist of reviewing lessons learned from prior projects, carrying out a risk brainstorming session, using an business certain prompt list showing likely areas of risk or creating a risk breakdown structure. The latter is a hierarchical diagram like an organisation chart. It can be sub-divided in a range of methods, for instance by product, by team or making use of PESTLE (political risks, economic risks, social risk, technological risks, legal risks, environmental risks). It could be utilised as a focal point for a workshop to identify all risks in each and every area of the project.
3. Early Warning Indicators
It’s all too simple for a project manager to myopically focus on a modest set of performance areas for example work completed to schedule. The new manual suggests a range of other early warning indicators that identify how the project is performing. For example percentage of approvals accomplished, number of issues being raised and number of defects becoming captured in top quality inspections. Reviewing all aspects of a project increases the likelihood of identifying more vital risks.
4. Assessing the Overall Risk Exposure
PRINCE2 2009 gives an approach to show the overall risk scenario of a project. Every risk is given a likelihood in percentage terms and an impact ought to it happen in monetary terms. By multiplying 1 by the other an expected value could be calculated. Totalling the expected values of all of the risks gives a monetary figure that quickly shows the exposure of the entire project to risk.
5. Considering the Effect of Time on a Risk
PRINCE2 has usually suggested recording when each and every risk will occur. It calls this the proximity of the risk. But in this latest release it gives examples of how you might categorise proximity, like imminent, within the next stage of the project or right after the project. It also recommends taking into consideration whether the probability of the risk occurring and/or the impact on the project if they do occur, may possibly vary over time. Having this information can assist focus on risks that are of a a lot more pressing concern.
6. Giving a Clearer Approach to help Define Risks
Rather than just thinking about the event that might or may not happen for example a road collapsing underneath a heavy load, the new manual considers what could cause the event. This enables for a deeper analysis of any individual risk. If the road collapses it could be caused by heavy rain, poor driving or initial poor construction of the road by the council. Understanding what are the most likely causes for each and every prospective risk event, can support implement much better mitigation plans to deal with them.
7. Focus on Opportunities
Risks could be opportunities. For example a new technology may well appear to speed the programming of a software module. PRINCE2 2009 gives 3 approaches of approaching an opportunity: exploit it by doing something that ensures it occurs, improve the probability or impact of the event occurring or just reject the chance. In practice a great project manager is often looking for opportunities to enhance their project, but making this explicitly part of the risk management procedure, improves the probability of spotting a lot more.