Worries over faltering projects

Proactive intervention

Guru says Only 37% of all major technology projects are delivered on time, but you can be proactive in managing the things that may cause you to fail by managing risk better.
Managing Project Risk

Only 37% of all major technology projects are delivered on time, within budget and perform to expectations. The remainder of projects either struggle to deliver what is expected or fail entirely, exposing the companies involved to significant risk.

With billions of rand often at stake, particularly with the roll out of core technology, the risks to an organisation, are significant, says Karthi Pillay, Director in the Risk Advisory Business Unit at Deloitte.

“Research shows that 42% of systems projects are challenged, whilst a staggering 21% are cancelled before they are completed or are delivered and never used. These statistics certainly don't create a sense of comfort when one considers the Infrastructure spend that South Africa is busy executing. 

However, you can be proactive in managing the things that may cause you to fail i.e. manage risk better. Large projects are complex enough, but with a skills shortage of project managers, a rush to complete the job, and a lack of investment; you have now tripled the risk of failure. 

Most companies have become project dominant. Yet, there seems to be a lack of focus on risk management despite many companies having a Risk Management department.

This is perhaps because the time required to educate a risk manager about the principles of project management and structures is deemed an acceptable corner to cut.

However, it is actually very important to have the right risk management skills on your project that also have experience within the project management discipline.

Without appropriate risk management as a core component of a project, stakeholders and sponsors do not feel at ease due to perceived negligence, and this may negatively impact the reputation and share price. 

Most project managers are generally busy in the 'engine room' of the ship (the project) and no one really stands at the bow looking for icebergs that could sink the ship. This generally results in a scramble to resolve issues, with rushed decisions; more spend, and then comes the blame game.

Perhaps far too much is expected from the project manager; after all he is just one person.

“Successful projects need great Project Managers and great Project Managers are experienced leaders with a healthy dose of emotional intelligence. Organisations should ensure large projects adopt a 'risk intelligent' approach.

"To be project risk intelligent means to dedicate the right people to the job and enforce discipline and reporting. It is about having a risk management team that is embedded within the project, not throwing stones from the side-lines.

"Behind these figures is a lack of foresight and planning to minimise and manage potential risks,” says Pillay. 

Pillay believes the critical success factors include creating a culture of risk management within the project, and demonstrating to the larger project team how risk management will be beneficial, in other words, get buy-in. 

Here are some key steps that should be adopted to establish a risk culture within the project:

  • Development of the project risk management plan and schedules covering the project through the stages of concept, pre-feasibility, feasibility and then execution and handover; 
     
  • Facilitating the project risk analysis which contextualises, plans for and facilitates a project-wide risk analysis. This comprehensive process only reaches completion when the first draft project risk register based on documentation reviews, stakeholder feedback and risk ranking workshops are completed; 
     
  • Training and enabling of key stakeholders to ensure that the nominated risk management stakeholders are able to effectively use the newly established risk management framework; 
     
  • Facilitating all supporting risk management activities through project continuity management and disaster recovery, critical dependency planning, systems risk management and probability analysis, through to determining contractual terms to mitigate or develop necessary risk transfer strategies; 
     
  • Formalising a continuous improvement programme through the introduction of periodic, risk-based quality checks, compliance audits and progress reviews to identify potential project deviations, non-conformance and inefficiencies, then finally; 
     
  • Submission of the final report documenting all findings and summarising risk management activities, recommendations and lessons learned during the course of the project. 
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