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Whether you manage projects or simply work on them, you’re probably aware that risk management is one of the most important considerations that determine long-term project success. Teams and managers who identify the risks to their projects, and take the necessary steps to avoid those risks, have a much better chance of creating high-quality deliverables on time and on budget.

Since the best way to avoid a risk is to understand it, project managers and team members should make an effort to become familiar with the most common categories of enterprise project management risks. A solid understanding of project risk management will help you identify the specific risks to your projects more quickly and accurately.

Risk Management

Requirement and Scope Risks
The most certain way to put a project in danger is to incorrectly or inadequately define the requirements and deliverables. No matter how diligently the manager and team members stay on task, a project can never succeed if it is working toward the wrong goal. Scope creep—the uncontrolled addition of project requirements and deliverables—can also put a project on the road to ruin. Preventing scope creep is one of the most important duties of an enterprise project manager. By creating an accurate and complete project scope document, PMs can dramatically increase the chances of their project’s success.

The difficulties in defining project requirements, and the problems that can arise when requirements change, are some of the key reasons that many organizations have moved toward agile project methodology, or other methodologies that allow for more flexibility in the early stages.

Timeline Risks
When project tasks take longer than expected, it can be very difficult to get the project back on schedule. Attempting to rush through subsequent tasks can lead to errors or quality issues, which in turn put the project even further behind.

The best way to manage timeline risks is to begin with a realistic assessment of a project’s component tasks, and to get input from team members on the time that may be necessary for new or unfamiliar tasks. This is one reason that the “bottom-up” approach to project management has become more popular in recent years.

Budget Risks
When projects go beyond their scheduled time, they usually exceed their budgets as well, due to the extra days, weeks, or months that team members continue to work. Timeline problems are not the only reason that a project might go over budget, however. Many projects incur budget overruns due to unexpected purchasing needs, fluctuations in material prices and outsourcing of project tasks to more expensive personnel.

Project team members, and even project managers, are often a step removed from budget decisions, which are often made before anyone is assigned to the project. However, early identification of budget concerns can make it much easier to get the additional funding needed to complete a project successfully.

Are you looking for new ways to manage project risks within your organization? Clarizen for Project Managers can help you create detailed project plans, monitor resource allocations and keep your projects on track.

Todd Valentine
Todd is a Senior Product Manager at Clarizen. Todd has experience working in innovation, product development and PMO organizations within VMware’s CTO office. He has a master's in Information Systems and an MBA from the Questrom School of Business at Boston University.