Many project managers are woundering if there is any value in project risk analysis. Project risk analysis takes effort, requires experienced personnel with specialize knowledge and requires risk analysis software. But does it provide benefits, namely reduction of project duration, cost reduction, efficient resource allocation and others?
We have worked with many clients in different industries. The research shows that the average delay of large IT projects is 30%; however many projects can be delayed significantly longer. Average delay of large unique construction and infrastructural projects is similar. This is a result of risks and uncertainties which were not taken into account when the original project schedule was created. However these risks can be mitigated and if risks are occurring, a response plan can be executed. Mitigation and response planning will not completely eliminate project delays or cost overruns. Plus the execution of such plans cost money and take some time. But based on our experience, execution of mitigation and response plans can reduce overall project delays and cost overruns by 50% on average.
The value of project risk analysis is not only in determining a realistic project schedule with risks and uncertainties, although it is very important. The most value in project risk analysis is risk mitigation planning, which includes:
- risk prioritization or determining what risks can be mitigated first
- analysis of efficiency of mitigation plans and calculating their cost and duration
- analysis of risks as part of project control and just-in-time execution of project risks
RiskyProject software has all the necessary functionalities to perform quantitative analysis, risk analysis with mitigation and response planning. RiskyProject has a depository of risk report and risk mitigation plans which can be assigned to different risks. Mitigation plants in RiskyProject can be presented using waterfall diagrams.
RiskyProject also supports multiple baselines. Each baseline has a set of risks assigned to different activities as well as mitigation and response plans. By comparing risk baselines it is possible to calculate the efficiency of mitigation and response efforts.
