Many companies try to do schedule risk analysis calculations within their existing, limited set of tools like the scheduling tool or Excel, rather than in a dedicated risk tool. This is because, historically, a scheduling tool is what schedulers have been trained in. They understand scheduling but risk, however, is typically owned by someone else in the organization—possibly in project controls or even higher up in the organization as part dedicated group responsible for managing enterprise risk where knowing how mitigating risks across their organization directly affects ROI. Even though they understand this connection exists between risk and business, many leaders overlook the main way that risk affects the execution of their business—which is through projects.
The most effective project managers start identifying risks at the beginning of a project—but they don’t stop there. Risk evaluation needs to be done in an ongoing, continual, basis. When this is done, organizations fully realize the importance of maintaining a standard of continuous risk analysis throughout the project. Savvy organizations have begun to understand that even when they have a solid plan, that plan will change throughout the course of a project. For that reason, there is a need to step back and look at the project plan at critical points throughout the project’s lifecycle. They see the value of updating risk analysis as they go, re-evaluating schedule and cost contingency. They are able to ask: What new risks have we seen occurring? How has that changed our schedule? As the scenarios evolve, using a risk program, project managers can review, evaluate and adjust accordingly.
The effect of this approach is a better and deeper understanding of the project. This detailed approach to project management improves your overall understanding of the risks that might pop up and how they may affect the schedule. You are able to better calculate contingency. As a result, you can be more fiscally responsible, which helps the organization overall. You can execute projects more flawlessly, which frees up the organization’s capital to execute other projects.