CIO Tools: Managing Project Risk

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Each year thousands of articles are written, countless books are published and as many hours as it took to create these works are spent in classrooms teaching people how to manage projects. Yet the end result of all this effort still leaves most businesses with a large void in effective project management capabilities.

Part of the problem is due to the hubris associated with project management. It is assumed that a great project manager can take any project and make it successful. If the project manager follows the proper procedures, documents risks and addresses them one by one, the project team should be able to mitigate the risks to an acceptable level.

In reality, however, even the finest project managers can’t patch enough holes to salvage a sinking ship. What great project managers will do, however, is be the first ones to spot the sinking ships and never set foot on them.

So the important lesson here is to understand the unwritten rules, or heuristics, that the experienced project managers use to size up a project and assess the odds of success.

This White Paper contains a few simple steps to help you win before you start.

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CIO Tools: Managing Project Risk

  1. 1. WHITEPAPER CIO Tools: Managing Project Risk simple steps to help you win before you start by Jim Vaselopulos - Partner, PSC Group December 2008 Each year thousands of articles are written, one, the project team should be able to mitigate countless books are published and as many the risks to an acceptable level. hours as it took to create these works are spent In reality, however, even the finest project in classrooms teaching people how to manage managers can’t patch enough holes to salvage a projects. Yet the end result of all this effort still sinking ship. leaves most businesses with a large void in effec- tive project management capabilities. What great project managers will do, how- ever, is be the first ones to spot the sinking ships Part of the problem is due to the hubris and never set foot on them. associated with project management. It is as- sumed that a great project manager can take So the important lesson here is to under- any project and make it successful. If the pro- stand the unwritten rules, or heuristics, that the ject manager follows the proper procedures, experienced project managers use to size up a documents risks and addresses them one by project and assess the odds of success. 1 www.psclistens.com © Copyright 2009, PSC Group, LLC
  2. 2. An Ounce of Prevention involved from the early stages of a project idea all the way through to completion. It never ceases to amaze me how much time and energy people can exert trying to treat Although it is impractical to create an abso- symptoms and cure problems that could have lute pass/fail test for projects, we did feel as WHITEPAPER been avoided with an ounce of prevention. though it was possible to create a profiling tool to raise risk awareness and facilitate practical Project management, for all that is written comparative analyses within a project portfolio about it, is as much about knowing when to in an organization. throw in the towel as it is about making every attempt a success. There is undoubtedly suc- The Project Risk Profiler cess in recognizing a poor project as early as This simple tool can help you quantify the possible. risk profile of a given project. It is not intended Over the years several of us at PSC who to be used as an absolute scoring mechanism – have been in the consulting business for a very if it is it will not work for you. What this tool long time have developed a knack for spotting can be used for - very effectively - is the evalua- the ‘troubled’ project at a very early stage. tion of incremental or comparative risk be- What we never did, however, was document the tween your project alternatives. types of questions we asked ourselves when try- In time, this tool can also be used to see if ing to spot the ‘sinking ship’. In retrospect, as a your average risk profile is migrating lower or long-time consultant, we tend to forget that our higher. This can be indicative of changing exposure to vast quantities of projects gives us business conditions that are favorable or require some insight that is hard to obtain otherwise. attention from a political perspective. Aside from the sheer number of projects Perhaps the most useful application of this we have visibility to, there are several aspects of tool is how it can be used to verify that you are full-service consulting that provide exposure to entering each project having considered the different organizational cultures, project sizes, fundamentals. In this way, you can ensure that project types, budgeting methods, political cli- you are having the proper business dialogue at mates, leadership types, etc. Another useful the onset of each investment aspect of our experience is that we are often I t ’s a l l i n t h e w a y w e l i s t e n . ™ Jim Vaselopulos is a seasoned business executive with domain expertise in Financial Services, Marketing, Manufacturing and Service Industries. Jim works closely with many firms to help align business needs and technology for competitive advantage. His many roles include Partner at PSC Group, LLC, interim CIO at several organizations and strategic business consultant to many others. His speaking engagements include regional executive events, various podcasts, industry organizations and technology-centric educational institutions such as the University of Illinois. Jim Vaselopulos office: 847.517.7200 Jim holds an Engineering degree from the University of Illinois and an MBA mobile: 847.274.9637 from Marquette University. jimv@psclistens.com 2 www.psclistens.com © Copyright 2009, PSC Group, LLC

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