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6.6 Risk Control
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One good way to follow all these instructions is to make a note of this information within a so-called risk response matrix. Still, there is a more extreme possibility left which one has to think of during risk contingency planning. There is the possible eventuality that the risk remains after a risk response as per the contingency plan.
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Project audits usually play an important part in the Risk Response Control. An audit can be defined as a systematic and independent analysis. The term “audit” has its origin in the Latin language. The Latin word
“audire” means “hear”, so quality audit is a “quality hearing”. With the help of audits it can be checked if quality-related work and the results which are gained from that work conform to the standards and the planned requirements. It checks whether the work is done economically and rationally. The main aim of the audits is the discovering of weak points and risks inside an organisation or project. A big advantage of audits is the ability to check quality-related issues and workflow in a very good way. A disadvantage is the high time demand for the preparation of the paperwork and the training of the employees. However, audits only allow a short snap-shot of the visible situation. Some employees see this as a control over the work they performed and may come to resent the auditor.
Every audit results in an audit report. Internal reports must contain, for example, the basic information and procedures for the evaluation and observations in terms of project documentation or personnel qualification. Of course non-conformities also have to be reported. This is necessary for the next audit in order to check if corrective actions have been considered. Furthermore, there has to be a list of participants in an audit report.
Another major part of the risk control process is establishing a change management system. It is commonplace that the project will not materialise the way you originally planned it. There are many sources and causes of changes that possibly could affect your project and its course. Usually you could categorise these changes into one of the following categories:
- Changes in Scope: For example the project customer wants to implement an additional feature or a change in design which really represents a big challenge.
- Implementation of contingency plans: In this situation a risk really occurred. Now counteractive measures have to taken. These actions need resources in terms of cost and schedule and so represent a change to the baseline.
- Improvement changes by project team members: For example a change in suppliers. A new supplier can deliver more cheaply in the same quality.
All changes usually represent big challenges to the whole team and project manager. Often changes to the project are not avoidable and therefore a well-defined change review and control process in the early stages of a project is required. These control process include reporting, controlling and recording changes to the baseline of the project. Most change control systems are designed to fulfil the following criteria:
- Identify proposed changes
- List expected effects of proposed changes on schedule and budget - Review, evaluate, and approve or refuse changes formally
- Negotiate and resolve conflicts of change, conditions and cost - Communicate changes to parties affected
98 - Assign responsibility for implementing change - Adjust master schedule and budget
- Track all changes that are to be implemented
In general, stakeholders and the communication plan, which is defined in advance, will determine the communication and decision-making process to be used in order to make any changes to the project.
The decision-making process may vary between bigger and smaller projects. On larger projects it could be that, for instance, when you want to change important requirements of the project you need multiple sign-offs from different stakeholder whereas switching a single supplier could be done by the project manager himself because he has the authorisation to do so.
Never underestimate the impact of changes to the project. Very often several solutions have adverse effects on the so far completed project. Therefore all changes have to be assessed by people with the appropriate knowledge and perspective in their respective fields.
Every accepted change must be integrated into the plan of record through changes in the WBS (work breakdown structure) and baseline schedule. The plan of record is the current reference in terms of schedule, costs and scope. If the change control system is not integrated with the WBS and baseline, sooner or later the project plan and control system will become unworkable. The key success factor for the change control system is to document every single change occurring. Benefits of these requirements are:
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- Inconsequential changes are discouraged by the formal process - Costs of changes are maintained in a log
- Integrity of the WBS and performance measures is maintained
- Allocation and use of budget and management reserve funds are tracked - Responsibility for implementation is clarified
- Effect of changes is visible to all parties involved - Implementation of change is monitored
- Scope changes will be quickly reflected in baseline and performance measures
Change control is an important part of the project. As the project matures there must be a person or group who is responsible for approving the changes, keeping the documents updated, and communicating all changes to the relevant stakeholders. Success depends heavily on keeping the change control process updated.