Project Management: Business Risks and Best Practices You Need to Know

• The project may fail because of insufficient management and/or stakeholder sponsorship or support.
• Projects may incur risks that increase exponentially with project size.
• Inadequate sponsorship from leadership places the project at risk.
• A lack of project metrics and management of results may cause projects to deviate off course.

The project may fail because the staff allocated to the project do not have sufficient expertise in the key project domains. They’re also not empowered to make timely business decisions for their user communities. Risk indicators include:

• Experience in specific systems or technologies is insufficient.
• The staff allocated to support the team is insufficient.
• The roles and responsibilities of the project teams have not been clearly defined.
• The appropriate training for the project team has not been provided.
• A collaborative environment to encourage continual communication between team members and business units does not exist.

Management or stakeholder support must be obtained for the project, and a project management strategy must be fully developed. For example:

• A steering or executive committee has not been established.
• A project charter has not been developed and agreed upon by all parties involved.
• Executive and stakeholder buy-in has not been obtained.

The project team may not be fully aware of the requirements of the system that they are delivering. Risks include:

• Team members are not aware of how the system must support operational requirements.
• Team members do not clearly understand interfaces and user requirements.

Project management metrics and tools may have not been developed or may not be actively utilized. Indicators include:

• Realistic milestones and milestone decision points with exit criteria have not been established.
• Cost, schedule and performance are not continuously compared to the initial baseline.
• Performance metrics with threshold and objective criteria have not been established.

Additional Best Practices and Business Risks

Develop a project management strategy and emphasize the importance of communication throughout the project. A formal project management risk strategy and management plan should be developed. The strategy should outline the goals and objectives of the project team, roles and responsibilities of team members and functional areas, key decision points, milestones, and the level of effort required.

Prior to starting the project, management should distribute a project implementation support letter to the entire organization, emphasizing the importance of the project, the leadership role that the organization is taking in the arena, and the cultural or paradigm shifts that are required to ensure continued success. A formal project team charter should be developed and agreed upon by all project team participants. Project team members should keep their respective business units updated on the implementation.

The project scope should be finalized and should include cost, schedule, performance objectives, user requirements, defined performance metrics (threshold and objective) and key performance indicators (KPIs). The project steering committee should approve any deviation in the scope of the project. Should such approval be granted, an updated acquisition program baseline should be developed.

Ensure that you assign capable and empowered experts in the subject matter to the project teams. Project teams should be well-integrated with business unit representatives, scheduled meeting dates, plans of action and milestones (POA&M), and specified deliverables. Additionally, a project team member with technical knowledge should be assigned to assist the integrated product teams in realizing the technical requirements of the implementation.

You can read more on this topic in Project Management Methodology and by exploring these related tools on KnowledgeLeader:

Project Management Charter Template
Project Management Office Guide
Key Elements of an Effective Project Management Office Guide