In project management, risk is the likelihood of something not going according to plan. Think back… How many digital projects has your team taken on that went exactly according to plan?
Without addressing risk in digital projects specifically, there is a high likelihood that they will run over-budget, over-time and not consistently deliver the intended value. Understanding and planning for these risks at the outset is a critical aspect of digital project management.
Risk is a reality
As with most aspects of business, digital projects rarely happen under ideal circumstances. They can require a broad convergence of people, systems and data. Despite your best efforts, it’s not always possible to have ironclad answers to every question from the outset. And even if you do, things can change in a heartbeat.
What could go wrong?
Some examples of risk in a digital project:
You begin a 6-month long website build project. Two months in, Apple releases a new version of iOS, and the site you have in development doesn’t work properly on the new iOS version.
Halfway through a project, your company merges with another company, which has a very different go-to-market strategy.
Three months into a website build project, a competitor releases a new site with a great new feature that could draw your customers away.
A key team member departs your company for another opportunity mid-way through the project.
The biggest risk is failing to plan
Risk mitigation is the term used for having a plan to address risk in a project. All projects, regardless of the size or nature of the project, should include risk mitigation during the planning process. By investing time upfront to address risks head-on, you’ll be better prepared to turn unexpected events into new opportunities, instead of spending your days putting out fires.
So, how do you plan for potential risks?
First, by understanding the types of risks that exist.
Known/Known (top left quadrant) – We are aware of these during planning and understand what to do should they occur.
Known/Unknown (top right quadrant) – We are aware of these during planning, but aren’t fully prepared to respond to them.
Unknown/Known (bottom left quadrant) – We are aren’t aware of these, but know how to handle them if they occur.
Unknown/Unknown (bottom right quadrant) – We aren’t aware of these and don’t know how we would handle them.
A good digital project planning process will have the “Known/Known” risks built in. This means creating risk mitigation plans (Plan B) along with timing, and budget contingencies.
A good planning process will also address the “Known/Unknown” risks; first, by identifying potential prevention measures, and second, by developing mitigation plans should prevention efforts fail to be effective.
Now comes the hard part: Planning for what you don’t know
These are the risks in the bottom two quadrants. Unfortunately, every project will have risks that fall into the bottom quadrant. A good planning process will attempt to identify as many of the unknowns as possible. Merely identifying the unknowns moves more factors from the bottom quadrants into the top (“Known”) quadrants, allowing you to put mitigation plans in place, and increasing the probability that your project will end on time and on budget.
The risk of optimism
Optimism is a great quality to have, but in project planning, optimism leads to blind spots. Optimists generally only cover part of the top left quadrant of the possible range of risks in their planning efforts. If you have ever been told a project budget and timeline represents a “best case scenario,” chances are that most of the potential risks are being ignored by the plan. This is the operating model of “We’ll cross that bridge when we come to it.” However, when you get there, you might find out that bridge doesn’t actually exist. Building a bridge takes time and money, and can significantly change the plan.
Expect the unexpected
In the digital world, the landscape can change quickly and unexpectedly. When the planning process recognizes the potential for change and allows for contingency planning, the probability of project success increases dramatically. Risk mitigation needs to be a key part of all project planning efforts and is especially critical for your digital projects. This means identifying and planning for potential risks as much as possible while also acknowledging that “We don’t know what we don’t know.”
As you approach your next digital project, ask yourself the following questions:
What could go wrong during this project?
What could happen that would have an impact on our ability to deliver this solution, or might change the nature of the solution we’re hoping to provide?
Are there actions we can take now to prevent or lower the chances of running into the risks identified?
What is Plan B for each identified risk and is there enough contingency in the budget, timeline and scope planning to allow for the team to move to Plan B if we need to?
Having these conversations with all members of the project team and openly acknowledging and planning for risks is one of the critical elements to project success.
In the world of advertising, endings can bring about better beginnings. The decline of cable in favor of streaming means the ability to target TV audiences at a more granular level than ever before. Learn how Connected TV (CTV) and Over The Top television (OTT) give you key advantages when trying to use your ad dollars as wisely as possible.
How do you mitigate the damage of a downturn on your business, or better yet, turn it into an opportunity to grow? Learn five important things to keep in mind from our principal and founder, Bill Rossiter, as we enter the second half of 2022 and face the distinct possibility of an economic recession.
Many companies are increasingly enamored with their earning numbers, reflecting the cocktail of low supply and high demand that’s taken hold recently in the building materials industry. But what are the consequences to your business when you become too content with the status quo? Read on to understand why this thinking is ultimately dangerous to the bottom line.