Common Risks in Project Management and How to Identify Them

Welcome to the world of project management, where deadlines loom, budgets are tight, and the unexpected is always lurking around the corner. 

But, with the right mindset and a little bit of know-how, you can navigate even the choppiest of waters. In this article, we're going to take a look at some of the most common risks that project managers face and give you some tips on how to handle them. 

First things first – let's define what we mean by "risk." 

In the world of project management, risk refers to any potential threat or obstacle that could negatively impact the outcome of your project. These can be anything from delays in delivery to budget overruns to changes in scope. 

While you can never completely eliminate risk from your project, you can certainly take steps to minimize it.

What are some of the most common project risks 

Let’s discuss some of the more commonly encountered risks in project management, and provide you with tips on how to handle them. 

With this information, you'll be equipped with the knowledge and tools to tackle any obstacle that comes your way without compromising agility.  

Schedule delays and missed deadlines

We all know that feeling when you're staring at a calendar and realizing that your project deadline is fast approaching and you're not even close to finishing. 

Schedule delays and missed deadlines are common risks that project managers face. It can happen due to a variety of reasons like unexpected complications, lack of resources, or even team members calling in sick. Not only does it put the project behind schedule, but it can also lead to increased costs and disappointment from stakeholders. 

There are steps you can take to avoid this risk. 

First, create a detailed project schedule, and make sure everyone knows their roles and responsibilities. Keep a close eye on progress and identify potential delays early on so you can take corrective action. 

It's always a good idea to have a contingency plan in case of unexpected delays and keep stakeholders informed of any changes in the schedule. 

And let's not forget, communication and collaboration are key to minimizing the impact of schedule delays and missed deadlines. So, don't let schedule delays ruin your day, be prepared and proactive.

Budget overruns

Budget overruns are the bane of every project manager's existence. 

Things come up, and before you know it, you've exceeded your budget. It can be caused by unexpected costs, changes in scope, or even underestimating the number of resources needed. 

Not only is it a headache to deal with, but it can also lead to larger entanglements and even project cancellation. But don't let budget overruns ruin your day, there are steps you can take to avoid this risk.

Creating a detailed budget plan and making sure to include contingencies for unexpected costs is key.

Keep a close eye on expenses and identify any potential budget overruns early on. It's also important to communicate with stakeholders and get their buy-in on any changes to the budget. 

And don't be afraid to get creative, there may be cost-saving solutions you haven't considered yet. 

Another tip is to use a budget tracking software or tool that can help you monitor expenses and identify any potential issues. 

Finally, don't be afraid to make tough decisions; if something is over budget and not essential to the project, it may need to be cut. Remember, being proactive, and having good communication and collaboration can help you keep your budget in check.

Quality issues

Quality issues are the silent killer of projects. 

Quality issues can happen due to a variety of reasons such as poor planning, lack of resources, or even lack of communication. Nevertheless, quality issues are another risk that can be mitigated or avoided altogether by placing an emphasis on a few specific aspects. 

Establishing and fully understanding set quality standards from the beginning is important and can smooth out the pathway forward from the beginning. 

It's also important to have a thorough testing and inspection process in place. Regularly monitor progress and identify any potential quality issues early on so that corrective action can be taken. 

Communication and collaboration with the team are key in preventing and addressing quality issues. Utilizing quality management tools or software can also be of great help and aid you in localizing issues and identifying potential issues.

Dependence on key team members or external partners

Dependence happens when a project relies heavily on one or a few individuals or partners, and if they are not available or perform poorly, it can lead to project delays, decreased quality, and so on. 

To mitigate and address this risk, it’s important to involve other employees more heavily in certain processes. 

This is achieved by communicating with the team clearly and offering to cross-train team members so that an appropriate level of knowledge and skills is more evenly distributed among them. 

Knowledge and skill transfer can take time, so it's also important to have a backup plan in place. Finally try to level resource assignments in order not to rely too much on one person or partner. 

Inadequate testing

When a project lacks a thorough testing process, it can lead to bugs, errors, and even project failure. 

Not only does this cause dissatisfaction among stakeholders, but it can also result in project delays and increased costs. To mitigate this risk, project managers must establish a clear testing process and ensure that all team members understand it. 

Regular testing and inspections should be conducted and any potential issues should be identified early on. 

Testing should be integrated into the development process and enough time should be allocated for it in the project schedule. Additionally, seeking expert help in testing and quality assurance can be beneficial. 

Overall, a thorough testing process and proactive approach will help ensure that a high-quality product is delivered.

Dependence on external factors

Dependence on external factors can come in many forms, whether it's depending on vendors, suppliers, or contractors to deliver goods or services on time or relying on external partners to provide critical information or resources. 

If you're not careful, it can cause delays, and budget overruns, and potentially place the project in jeopardy.. 

One of the key things to keep in mind when dealing with this risk is to thoroughly vet any external partners or suppliers before committing to working with them. 

Make sure that they have a good track record, that they are reliable, and that they can meet the project's requirements. It's also important to have a backup plan in case external partners or suppliers fail to deliver as promised. 

This can include having multiple vendors, suppliers, or contractors as options or having a plan B ready in case of delays or issues. 

Another way to minimize the impact of this risk is to ensure that everyone involved in the project is aware of the potential issues that can arise from depending on external factors. 

This includes the project team, stakeholders, and any external partners or suppliers. By keeping everyone informed, you can ensure that everyone is working together to mitigate the risk and that everyone is aware of what to do if things don't go according to plan.

What are some steps project managers take to identify risks

Risk Identification Workshops: Project managers often conduct risk identification workshops in which the project team, stakeholders, and experts from relevant fields are brought together to identify potential risks and their likelihood of occurrence. This method allows for a diverse range of perspectives to be considered and can help identify risks that may have been overlooked. 

Risk Assessment: Identifying potential risks is just the first step, then project managers assess them in terms of their likelihood and impact on the project's objectives. This allows the project team to prioritize which risks to address first and how to allocate resources accordingly. 

SWOT Analysis: Conducting a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is a useful tool to identify internal and external factors that may impact the project. This allows project managers to identify both the positive and negative aspects of the project and take appropriate actions to address them. 

Project Audits: Regular project audits are conducted to identify potential issues that may impact the project's progress and performance. This allows project managers to stay up to date with the project's status and take corrective actions as necessary. 

Historical Data Analysis: Analyzing historical data from previous projects is a powerful tool to identify patterns and potential risks that may occur in the current project. This allows project managers to learn from past experiences and apply this knowledge to the current project.

Prioritizing Risks: Once the potential impact of risk has been understood and assessed, project managers must prioritize the risks based on the level of threat they pose to the project. This process is called risk prioritization. The goal of risk prioritization is to identify the risks that have the greatest potential impact on the project and to prioritize the implementation of risk management strategies accordingly. This helps project managers to focus their efforts on the most critical risks and to ensure that the project stays on track.

Mind Mapping: Mind mapping for risks is a technique used in project management to visually organize and prioritize information, specifically when it comes to identifying and managing risks. It's a way of creating a diagram that shows the relationships between different ideas, concepts, or pieces of information. Mind maps can be created using software or even by hand. It’s a useful tool for brainstorming and organizing thoughts as well as identifying potential risks that may have been overlooked. It also helps project managers to see the connections between different risks and prioritize them.

Key Takeaways

As we've discussed, risks are an inevitable part of any project and it's important for project managers to have the skills and knowledge to identify and manage them effectively.

From schedule delays and missed deadlines to budget overruns and quality issues, we've covered some of the most common risks that project managers face. 

But remember, every project is unique and new risks can arise that are specific to that particular project. That's why it's important to always be on the lookout for potential risks and to have a plan in place to manage them. 

One of the key takeaways from this article is the importance of being proactive. 

By creating detailed project schedules and budget plans, monitoring progress and expenses, and having contingency plans in place, project managers can minimize the impact of risks and keep the project on track. 

Additionally, using tools such as mind mapping can be a great help in identifying and organizing information, and it can be a useful tool for project managers to have on hand for risk identification.

DevStride can help

DevStride is a modern project and portfolio management tool purpose-built to reduce the stress factor and make managing projects - successful. A refreshingly easy-to-use tool, DevStride provides the robustness and insight project leaders need and support that teams love.

Here are just a few ways you can use DevStride to help you truly manage risk:

Workstream mapping to strategic goals and objectives - ensures work is focused on the right projects and is aligned with goals.

Collaborative workspaces - DevStride promotes communication through common workspaces, breaking silos and promoting cohesion. Create and collaborate, keep your risk management plan up-to-date for everyone in one place.

Custom fields and tags - DevStride’s flexible  custom fields and tags allow team members to track risks,bugs, ratings, priorities and any other relevant information, providing an easy way to search, sort, and report on any data, any time.

Filtering and reporting - is multidimensional on all data, instantly, across projects and teams, organization-wide.

Stack ranking - makes priorities clear and easy to manage.

PERT (Program Evaluation and Review Technique) feature - for planning and controlling  projects using a three point estimation calculation.

Workflow automations - make use of customizable, event and criteria-based triggers to notify owners, promote task management, and stay informed.

Notifications - keep work moving, information available, relevant, and up-to-the second regarding changes, communications, and issue management.

Visual indicators - display throughout the tool for easy information at-a-glance, including priorities, completion rates, and status.

Work in Progress (WIP) limiters - manage the risk of task overload and potential delays.

Rich Analytics - DevStride analytics are a powerful and effective way to identify potential issues before they become problems. Beyond raw data, DevStride provides insights to make the kind of informed decisions leaders and teams need to manage risks.

Reach out today - we are here for you

If you need access to a modern project and portfolio management tool that can help you plan and control projects, then schedule an introductory call with us today.  

Our integrated work management platform provides teams with superior visibility and alignment. Understand the true state of the work, even as priorities shift. 

By using DevStride’s platform, you can gain a holistic view of your projects and initiatives, enabling you to deliver successful projects and improve the overall performance of your organization.

We’ll show you exactly how DevStride can help your teams manage exceptional project and product delivery. For projects big and small, DevStride is here for you!