Question

The risk of the project :

1. Failure to terminate the project within the stipulated scope might lead to potential project risks.

2. The scope of the project plan is vulnerable to unpredictable situations and events at the beginning of the project.

3. Working with the allocated financial resources might be difficult if the deliverables are changed, which might affect the final results.

4. Failure to work through the approaches within the allocated time might also lead to poor planning and alter the deliverables of the project.

Moreover, changing the specifications might cause difficulties in delivering the expected results because the project scope is more sensitive.

Question:

Never present a risk to the senior executive without a risk response strategy. Explain what you plan to do to mitigate the risk above?

Answer 1

To answer your question, here is a Project risk vs potential risk areas matrix.

• On the X axis, we have the four different risk areas that the project is supposedly facing
• On the Y axis is the different types/categories of risks

The answer to question is purely based on my expectation. There is no absolute wrong or write answer this question.

As such you might think that why a risk has been included or not included. This is purely based on my experience of working on agile projects.

Project risks Vs Potential risk areas	Technical	Cost	Schedule	Client	Contractual	Weather	Financial	Political	Environmental	People
Failure to terminate
Unpredictable situations and events
Deliverables are changed

Risk 1: Failure to terminate the project within the stipulated scope might lead to potential project risks.

Failure to terminate the project within the stipulated scope will have the following risks. Please refer to the above matric to see the risk categories.

Cost: Failure to terminate the project on time means an extension of the project deadline which will add to project cost. This is not borne by the client as its usually not a part of the SLA. The mitigation strategy would be to communicate to the client about the scope. Usually projects run on sprint basis. So, the number of tasks in the sprint must be reduced.

The “definition of done” needs to be recalibrated with the client.

Client

The client must be looped into communication to convey that the scope is fixed and under no circumstances can it be extended.

Contractual

The terms of contract must clearly define the definition of done and must have a clause stating the in case the timelines are not met owing to an extension of scope from the client, the additional cost overrun shall be borne by the client

Financial

The contract must have a clause stating that in case the project is not terminated within the stipulated timeline, the additional hours put in are chargeable.

People

A buffer of resources to join the project in case the project is not terminated within the stipulated timeline.

Risk 2: The scope of the project plan is vulnerable to unpredictable situations and events at the beginning of the project.

Cost

The contract needs to consider the additional cost that may be incurred due to vulnerabilities arising out of regulatory environment, environmental impact and political condition. To mitigate such risk additional time will be needed to complete the project and that must be agreed upon in the contract between you and the client.

Schedule

The contract must include an additional buffer to accommodate uncertain scenarios in its sprints. The definition of done also needs to be modified accordingly.

Political

While planning for the project the following criteria should be accounted for:

Upcoming elections in the region

• Political stability in short term and long term
• Political relationship between the client’s country and your (vendor’s) country

Environmental

Environmental clearances and compliance must be accounted for the beginning. In a scenario where a project can be indefinitely delayed due to environmental issue (happens commonly in infrastructure and mining projects), the completion needs to be divided into multiple phases.

To understand this, the contract must have a clause stating that under the following set of environmental clearances, we shall be able to complete a certain percentage of the project and stop.

Risk 3: Working with the allocated financial resources might be difficult if the deliverables are changed, which might affect the final results.

The following risk categories will impact the deliverables while managing financial resources due to change in the scope of deliverables

Technical

This happens especially in case of IT projects. The contract must have a clause that in case of any change of scope, the technical needs of the project will change. For instance, new software applications, development and maintenance, licenses, infra set up etc.

Cost

Contract must have a clause stating that incase of change of scope, project cost will increase due to technical and human resource requirements

Schedule

The contract must state the timelines against the scope. Any change in scope will change the time limes and subsequently will have a financial impact. In case it is not possible to freeze the scope, the pricing of the project must include the cost due to a flexible schedule. In my experience, a typical sprint where the scope is fixed takes about 2 weeks and in case the scope is not clear, it should take around 3 weeks. There will be multiple sprints within the project phases and again multiple phases within the project. So most importantly the flexibility needs to be accommodated at a very granular level or sprint level and not at a phase level.