The Importance of Risk and Recovery During Times of Uncertainty

In the world of project and portfolio management, it is no secret projects often do not go according to plan, making risk management an integral component of project delivery even in the best of times. However, for many teams across the globe, the impacts brought about by the COVID-19 pandemic have highlighted the absence of strategic risk practices for some, while others have realized they are not as prepared to deal with these setbacks and uncertainties as effectively as they thought.

This new reality has created a climate where risk and recovery are at the forefront, but with so many variables and unknowns how can project teams strategically move toward a future that may be anything but normal?

Importance of Schedule Risk Analysis 

According to the 11^th Annual Deltek Clarity Government Contracting Study, about 16% of respondents indicated they do not preform schedule risk analysis and only 28% of companies plan to develop formal risk management programs in the next year. These statistics are alarming given the benefits both at the project and business level afforded by strategic risk management.

To start, a proper risk analysis validates your economics, quantifies risk exposure and provides true insight into what is actually driving the project through an objective lens. With this information, it is then possible to determine if mitigation is worth the investment.

Additionally, at the project level, risk analysis provides stage gate insight, highlights hidden critical paths and gives your forecast realism, which in turn allows you to manage contingency and handle risk exposure. As a result, project teams are able to make the shift from being reactive to truly proactive.    

Avoid Common Pitfalls

To get the biggest return on your risk analysis, it is important to consider the following technical and human-centric best practices:

Technical

#1 At the onset, you need to confirm the desired probability value, is cost or schedule driving the project and what is the price tag per day?

#2 Valuable risk analysis is not possible without a truly sound schedule, which serves as your project’s foundation. You must have solid mechanics as well as complete and correct logic in your schedule to start.

#3 Your risk register should be done upfront with clear, specific language. Resist that natural urge to pre-choose the risks that need mitigating. Instead, brainstorm and make certain you have a complete list first, then map those risks into the project.  

#4 Lastly, be sure the analysis is complete before decisions are made – no cheating! And, do not forget that schedule feeds cost.

Human

#1 Selecting the right input team is key. Make certain they know the work best, understand the process, are honest and can be calibrated.

#2 Pull in someone to facilitate this process who understands the technical side, but is also skilled in the human aspects. This person should be trusted and committed to driving toward realism, even if the outlook is less than ideal.  

Tools of the Trade

While technical and human elements are important aspects of a strategic process, do not underestimate the power of software to facilitate risk analysis and schedule optimization. And, using the right tools is paramount to success.

Project teams around the globe are utilizing Deltek’s industry-leading Project & Portfolio Management (PPM) solution, Acumen, to improve schedule quality and increase project confidence during these challenging times. With Acumen they are able to:

• Simulate the current impact of project delays
• Re-baseline projects considering possible future impacts in a variety of ways
• Analyze schedule acceleration scenarios to recover time

Delivering the Risk Message

Even when you think the hard part is over, there is one more step. Once you have completed the risk analysis and determined the best path forward you will need to successfully communicate these findings to your stakeholders. This requires a compelling risk message, but there is not a one-size-fits-all approach. To be effective, you must first determine exactly who your stakeholders are and tailor the message appropriately in an easy to understand format.

And, remember, the “message” is not truly complete until the project is closed, especially in today’s rapidly evolving environment. It should continue to evolve based on actions or inactions taken by the team until the project is finished. For this reason, it is essential to keep the risk message alive in the consciousness of the project team and key stakeholders throughout delivery.  

To learn more about why effective risk management is crucial for today’s project teams along with additional best practices and tangible actions from thought leaders, industry experts and Deltek customers check out the Adapting to Uncertainty: Project Risk & Recovery Webinar Series.