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6 Project Risk Tools to Ensure Project Management Success

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Effective Risk Management Tools for Successful Project Outcomes

In the world of project management, risk is an inevitable factor that can significantly impact project success. Effective risk management is crucial in navigating these uncertainties. In this article, we explore six powerful tools and techniques that every project manager should consider when addressing risk. These tools will help identify, assess, mitigate, and monitor risks throughout the lifecycle of a project. Let’s dive into each of these risk management strategies.

1. Risk Assessment Matrix

The Risk Assessment Matrix is an essential tool for identifying and evaluating risks based on their probability and impact. It helps project teams to prioritize risks and decide on appropriate actions for risk mitigation. By rating risks from low to high, teams can calculate a risk score by multiplying the likelihood of a risk occurring with its potential impact. This process highlights critical risks that require immediate attention and control measures, allowing teams to focus their efforts where it matters most. Once mitigation actions are applied, the risk levels can be re-assessed and brought under control, reducing their potential impact on the project.

2. SWOT Analysis

A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is an excellent brainstorming tool for identifying risks. In the context of risk management, weaknesses represent internal risks within the project, and threats refer to external factors that could pose risks. For example, if a project depends heavily on the business owner’s brand, this could be considered a weakness. External threats could include competitor dominance in the market or economic downturns affecting consumer spending. The SWOT analysis helps teams analyze internal and external factors that could affect the project’s success and create proactive strategies to manage those risks.

3. PESTEL Analysis

Similar to SWOT, the PESTEL (Political, Economic, Social, Technological, Environmental, and Legal) analysis helps project managers assess external risks. This analysis provides a broader view of potential risks that could affect a project, such as changes in laws, political instability, or technological advancements. For instance, if a new AI-driven technology emerges, it could represent both an opportunity and a risk for a mobile app project like Pet Buddy. Identifying these risks early on can allow teams to take advantage of opportunities while mitigating threats before they materialize.

4. Decision Tree Analysis

Once risks are identified, it’s time to explore quantitative measures to understand the costs and benefits of various decisions. A decision tree analysis is a powerful tool for visualizing different decision paths, outcomes, and probabilities. By assessing various decision scenarios—such as choosing between two marketing strategies—project managers can determine the most cost-effective and impactful decision. For example, aggressive paid marketing may have a 60% chance of success, but a sponsorship approach might yield better returns with a higher probability. This tool helps project managers make data-driven decisions that optimize project outcomes while mitigating risks.

Decision Tree Analysis

5. Force Field Analysis

Force Field Analysis is another technique used to assess the driving and restraining forces for a particular decision or change within a project. In risk management, it helps teams evaluate the pros and cons of a potential risk or opportunity. For example, when considering the development of an AI-driven matchmaking algorithm for the Pet Buddy app, the driving forces may include technological innovation and market demand, while the restraining forces might involve high development costs and potential algorithmic errors. By ranking these forces on a scale of 1 to 5, teams can assess whether the potential benefits outweigh the risks and make an informed decision.

Forcefield analysis

6. Sensitivity Analysis (Tornado Chart)

The Sensitivity Analysis, often depicted as a Tornado Chart, is used to evaluate how sensitive a project is to certain variables. For example, the Pet Buddy project could look at how changes in the commission rate for pet sitters affect overall revenue. By adjusting different variables (such as the percentage of commission), a project manager can visualize the positive and negative impacts on revenue. This analysis allows teams to identify which factors are most critical to the project’s success and prioritize actions that will minimize risks associated with those factors.

Tornado Chart - Sensitivity analysis

Conclusion

Risk management is a crucial part of project management, and these six tools—Risk Assessment Matrix, SWOT Analysis, PESTEL Analysis, Decision Tree Analysis, Force Field Analysis, and Sensitivity Analysis—help project managers stay ahead of potential issues. By leveraging these techniques, teams can identify risks early, quantify them, and implement controls to minimize their impact on the project. The Pet Buddy mobile app project is just one example where these tools can be applied to ensure success, but they are equally effective in various industries and project types. By incorporating these tools into your risk management plan, you can navigate the uncertainties of any project with confidence, ensuring a smoother path to success.

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Crowdstrike and Quality Management on a Project

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Why is Quality important in your project?

You probably heard about the Crowdstrike outage on the weekend of July 2024 that disrupted airports, banks and stores all around the world. It was caused by Crowdstrike pushing a system file full of zeros to production.

How can we avoid this sort of disaster as we manage our own Projects? There are many ways:

➡️ Peer review & Code Inspections: Checking the requirements with a user or reviewing the code with another Developer.

➡️ Continuous Integration: Merging changes into the main test system (often daily) with automatic tests.

➡️ Test Driven Development: Tests are written first, failed, then run again and passed after the solution is coded.

➡️ Unit Tests: Testing each small piece or User Story.

➡️ System Testing: Testing the integrated system as a whole.

➡️ User Acceptance Testing: Testing the system from the User’s point of view.

➡️ Regression Testing: Testing the existing system with the changes to see if they’ve impacted normal operations.

➡️ Production Verification Testing: Testing the change in the live environment after go-live then rolling the change back if it goes wrong.

➡️ Sprint Review: Demonstrating the actual change to the customer or senior users before release.

Quality is one of the 10 Project Management Knowledge Areas for a reason.

⭐ What are some of the ways you manage Quality on your own projects? ⭐

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Meetings and Meeting Management

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Meeting Management - PMBOKMeetings and meeting management

Face-to-face or virtual meetings are used for decision making, and they’re used for responding to stakeholder requests, having discussions with suppliers, vendors and other project stakeholders. Meeting management is taking those steps to ensure that meetings meet their intended objectives quickly and efficiently, so that we’re not all stuck in meetings that we don’t want to be in.

Steps for Effective Meeting Management

What are the steps for effective meeting management? First of all, it’s ideal to prepare and distribute that agenda, stating the objectives of the meeting. What are we trying to achieve? Send this out to everyone involved, so everyone’s on the same page.

We should ensure that the meetings start and finish at the published time. Sometimes meetings drag on and it’s not ideal for other people – we’ve all got other things to do.

We should ensure the appropriate participants are invited and attend. If they can’t attend, can we change the meeting time or can we ask them to reach reshuffle other things? Sometimes we have to shuffle these things around.

We should stay on topic, and as we go along on that intended topic we should manage the expectations, issues and conflicts during the meeting. Sometimes it’s best not to promise the world, and instead we’re managing those expectations. It is quite an important thing, maybe it can be done but by ensuring we don’t promise that upfront we’re under promising and over delivering in that way.

Lastly, record all actions and those who have been allocated the responsibility for completing any actions. This usually comes from the meeting minutes at the end, or it can be in the form of just a follow-up email or an actual professional proper document. But what was discussed, what actions came out of it, and what do we need to do to follow up for next time?

And that is meeting management.

– David McLachlan

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Resource Smoothing and Resource Levelling

Resource Leveling versus Resource Smoothing

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Resource Smoothing and Resource Levelling

Resource leveling versus resource smoothing

The reason we’re looking at this topic is sometimes these items you can get confused when you’re doing the PMP exam, so it’s a good idea to understand it out before going into the exam in case you get a question on these two items on your project schedule.

What is resource optimization in general? It is used to adjust the start and finish dates of activities, we’re adjusting the planned resource use to be equal to or less than the resource availability – because we don’t want to be using more resources than we actually have. We might need to level or smooth those resources out.

Resource Leveling and Resource Smoothing

These are the two techniques used. Leveling focuses on moving the resources themselves while smoothing focuses on moving the activities within your critical path, using any existing float.

You might be familiar with some of those terms but we’ll go into a few examples and that should make it a little bit more clear.

Resource Leveling versus Resource Smoothing - PMBOK

Resource leveling can be used when shared or critically required resources are over allocated, such as when a resource has been assigned to two or more activities during the same time period. So obviously unless you can clone that person, if the same person is assigned to two activities in one time period then they probably can’t get one of those things done. So we just need to level that out.

When we’re resource leveling it can often cause the original critical path to change. As you can see in the first example, we’ve got Sue and Tom performing activity A, but we’ve also got Sue again performing activity B in the same time period. So again, unless we can clone Sue (which I don’t think is possible quite yet) we may have to shift that activity so that Sue is not doing those two things in the same time period. Then we’ve got the the third one over here that seems to be clear – it’s just one person doing that activity.

After resource leveling during day one we’ve got Sue and Tom doing their activity A, then we’ve got Sue doing her activity B on day two, and then Tom moving his out to day three, and this is why we say that the critical path may or will change during resource leveling, because we are leveling out the resources but we’re also extending out the time to suit. We’ve had to level out those resources, so the critical path may change now.

Resource smoothing adjusts the activities of a schedule model within their free and total float. Because of that the critical path is not changed because we’re just using up the available wiggle room in our schedule. Let’s have a look at an example of a schedule network diagram, where you’ve got early start, the duration and the float. Those are the two things that we’re really looking at here. As you can see we’ve got no float on this on this activity, no float on this activity, but we have got five days worth of float or wiggle room on this particular activity, so maybe we can push this back by five days and it will still be okay – things can be smoothed out and it won’t adjust the critical path or our overall schedule.

And that is the idea of resource leveling versus resource smoothing.

– David McLachlan

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The Nominal Group Technique

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Nominal Group Technique - PMBOKThe Nominal Group Technique

You might need to use the nominal group technique as you’re gathering requirements in your project, and also arranging requirements and arranging solution ideas within your scope management process.

What is the nominal group technique? It’s basically a structured form of brainstorming which helps us gather ideas. It also helps us see what the most important ideas to work on, as it enhances brainstorming with an anonymous voting process used to rank the most useful ideas for further brainstorming or prioritization. Our most important ideas are the ones that receive the most votes during this anonymous voting process.

The nominal group technique consists of four steps. The first one is we pose a question or a problem to the group. For example “How do we solve this problem?” or “What are the requirements that you have out of this particular project or process?” Each person silently generates and writes down their own ideas. And this is a really important because it just stops one person or two people who everyone looks up to from being copied or followed. This is a way of getting around that so everyone gets a more even say, no one has influenced it in any way before they get to generate their own ideas.

So it’s a much more pure form of brainstorming. Now the moderator or the facilitator role that you’ll see come up in Agile a lot – and it’s a very important part of almost all of these processes – he or she will write down those ideas on a flip chart, on the wall, on a whiteboard or whatever until all of those ideas are recorded. Now then each idea is discussed until all group members have a clear understanding.

Some of the ideas might be the same or very similar, maybe a few relate to one particular idea. We can start to group the similar ones together. Now once we’ve got those groups then individuals vote privately to prioritize those ideas.

So you can either close your eyes and put your hand up, or you can just write down on a slip of paper and give it to the moderator or facilitator. Maybe this one gets four votes, this one gets two votes, this one gets five votes, then we might go with those ideas with the most votes.

It’s easy to do, if you just look at a scale of 1 to 5, one might be the lowest and five might be the highest priority that you could put during the voting process. You might do it in many rounds to reduce and focus in on ideas. So if you’ve got lots and lots then you can reduce them down. You’ve got 20, then you do another voting process and now you’ve just got one main one of the end after each round of votes are tallied and the highest-scoring ideas are selected.

And that is the nominal group technique.

– David McLachlan

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