Seven Components to a Risk Management Plan

The Risk Management Plan describes how you will define and manage risk on the project. This document does not actually describe the risks and the responses. This document defines the process and techniques you will use to define the risks and the responses. The information in this plan includes:

• Roles and responsibilities. This section describes the leading and supporting roles in the risk management process. The project manager typically has overall responsibility for risk management, unless the team is large enough that this role can be delegated to another team member – perhaps a specialist. Third-party risk management teams may also be able to perform more independent, unbiased risk analyses of project than those from the sponsoring project team.
• Budgeting. Discuss your budget for risk management for the project. Since you may not know enough to request budget for risk management you can also describe the process that you will use to determine a risk management budget estimate.
• Timing. Defines when the initial risk assessment will be performed, as well as how often the risk management process will be conducted throughout the project life cycle. Results should be developed early enough to affect decisions.
• Scoring and interpretation. You should define risk scoring and interpretation methods appropriate for the type of the qualitative and quantitative risk analysis being performed. Methods and scoring must be determined in advance to ensure consistency.
• Thresholds. The threshold level is how you determine which risks are important enough to act upon.  The project manager, client, and sponsor may have a different risk threshold. The acceptable threshold forms the target against which the project team will analyze risks.
• Communication. Describe how the information on risk will be documented and communicated. This includes the risks themselves, the risk responses and the risk status.
• Tracking and Auditing. Document how all facets of risk activities will be recorded for the benefit of the current project, future needs, and lessons learned. Also describe if and how risk processes will be audited.

Five Project Management Mistakes

Mistake #3: Not Keeping Schedule Up-to-Date

Many project managers create an initial schedule but then don’t do a good job of updating the schedule during the project. There are trouble signs that the schedule is not being updated.

• The project manager cannot tell exactly what work is remaining to complete the project.
• The project manager is unsure whether they will complete the project on-time.
• The project manager does not know what the critical path of activities is.
• Team members are not sure what they need to work on next (or even what they should be working on now).
  

It is a problem when the project manager does not really understand the progress made to date and how much work is remaining. When this happens, the project team is not utilized efficiently on the most critical activities.

There are a couple other common scheduling problems.

• Infrequent updates. Sometimes the project manager updates the schedule at lengthy intervals. For instance, updating the schedule every two months on a six-month project. This is not often enough to keep control of the schedule. The schedule should be updated every week or two.
• Managing by percent complete. All activities should have a due date. As you monitor the work, keep focused on whether the work will be completed by the due date. It is not very valuable to know that an activity is 70% completed. It is more valuable to know if the due date will be hit.
• Assigning activities that are too long. If you assign a team member an activity that is due by the end of the week, you know if the work is on-track when the week is over. However, if you assign someone an activity that does not need to be completed for eight weeks, you have a long time to go before you know if the work is really on schedule. Keep the due dates within a reasonable timeframe. 

It is not easy to catch up a schedule once the project is started. Typically, by the time you realize you need to update the schedule, your project is already in trouble. Updating the schedule at that point only shows how much trouble you are in. The much better approach is to keep the project up-to-date, and ensure that it contains all of work necessary to complete the project. 

Be Proactive Managing a Project with Unrealistic Budget

If you are a project manager dealing with what you perceive to be an unrealistic budget, the first thing you will want to do is discuss this with your sponsor to see if there are any factors that are driving the project budget. For instance, there may be budgetary restrictions. If you are a vendor, it is possible your sales people committed to a fixed price for the project. In some cases your manager or sponsor might set an arbitrary budget without much justification. It does not necessarily make your challenge any easier, but you may find that by better understanding the reason for the fixed budget, you may have an easier time getting yourself and your team members motivated to achieve it. When you have a full project management methodology you will have tools and techniques to respond to these concerns.  There are a number of responses to a project with unrealistic budgets.

• Reduce scope. Talk to your sponsor about reducing the project scope. See if there are features and functionality that he can live without for now so that you can deliver the project within the budget specified.
• Identify and manage the budget as a project risk. Utilizing risk management will help better manage expectations early in the project and also be a way to gather input and ideas for ways that you might be able to hit the budget.
• Manage scope with zero tolerance. On many projects, you start with an aggressive budget and the situation gets worse because the project manager does not effectively manage scope. If you are on a project with an unrealistic budget to begin with, it is absolutely critical that you manage scope effectively and do not increase scope without an approved scope change request. Disciplined scope management will ensure that you only have to deliver what was originally promised, and that any approved changes are accompanied by a corresponding increase in budget and timeline.
• Look for process improvement opportunities. Lastly, take an honest look at your budget and your approach for executing the project. Talk to your team, clients, and manager about any ideas they may have for executing the project at a cheaper cost. This will get everyone thinking about being part of a solution. For instance, perhaps you could buy used equipment that will still meet your needs instead of new equipment. Perhaps you can change the process for gathering requirements so that they are competed earlier. This may result in budget savings as well.

Although it appears that you are being held accountable for budgets that are not within your control, you do have control over the processes you use to manage the project. Look at all aspects of project management to see if the unrealistic budget can be achieved.