Why You Should Identify Risks Early
Identifying risks early in a project is a best practice. Here are some benefits of this great approach.
Obtain critical information for project approval. Without identifying risks early, an inappropriate project could be launched, wasting money and valuable stakeholder time. Instead, understanding the risks provides a balanced view of the value of project outcomes. The expected outcomes could be prioritized or enhanced based on the risks presented by the project team, making the project more viable. Or the project could be deemed inappropriate due to those risks.
Make your initial plans more realistic. Project overviews, including high-level plans, provide context that helps drive project approval. Those initial plans must consider project risks to be valid. With risks identified, the team can define mitigation actions and include them in the plans. Risk information helps the management team make go/no-go project decisions in the best interest of the business. In addition increasing the integrity of the approval decision, it also proactively sets key stakeholders’ expectations.
Set a reasonable project budget. Risk management often requires additional funds to cover the costs of actions or contracts needed to manage risk. And these can be expensive. Considering these costs early in project planning helps the sponsor set a reasonable project budget with greater likelihood of meeting business expectations.
Determine early staffing requirements. Addressing risks typically includes staffing considerations. Expensive, contracted specialized skills could be required to manage technical risks. Alternatively, you could make sure internal technical team leaders work on your project. (However, internal team leaders’ time may be limited, which can extend your project schedule.)
Capturing risks early in your project allows for better and more comprehensive decision-making. Because decisions are good and management is more informed when approving projects,the likelihood of implementing business goals and strategies successfully increases.
For more about risk management, check out Bob McGannon’s course Project Management Foundations: Risk.
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