Managing Technical Risk
The avoidance and management of technical
risk could warrant an entire separate paper. Let it suffice, here, that
technical risk must be addressed at least as much as schedule and cost.
Needless to say, here too, we need to take a pro-active approach. As we scope out
our projects and develop our plans, we need to ask:
- What if it won't work?
- What alternatives and options do we have?
- What is our backup strategy?
I can't help but wonder if this approach was taken on the Denver International Airport project, and whether the problematic baggage handling situation would have caused such a disaster if it were. Are we prone to believing in our own infallibility (the Titanic syndrome)? Whether schedule, cost, or technical design, we usually develop an appraisal that contains a most likely scenario, and a potential upside and a potential downside. Then we say that the downside will never happen. Such thinking is suicidal. Preparing for the downside allows us to manage these
risks.
Not Very Scientific … But it Works
Time contingency, float management, earned value analysis, management reserve and technical risk analysis are all very basic, non-scientific, practical means of managing and avoiding risk. All of these practices can be supported by commonly available tools, such as project management software and spreadsheets.
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Build in a Managed Cost Contingency