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.
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.
Some examples of risk in a digital project:
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.
First, by understanding the types of risks that exist.
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.
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.
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.
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:
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.
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