BPI-Based Project Risk Planning
...by Greg L Towne What we know and the Problem we see
The first thing that comes to mind when thinking about Digital Transformations, is the group of statistics from McKinsey#1
“Two in three (quoted figure was 70%) large programs regularly exceed initial budgets, miss schedule estimates, and underdeliver against objectives and benefits; often by significant margins, eg. 25% to 40% exceed budget or schedule by more than 50%”
This statement is not all that surprising when you often read about such situations in industry magazines or become involved in major project recoveries. Regardless of the industry, the culture, the size, the geo-location, and the complexity of organisations, the outcomes are continually repeated.
Current Approaches to Transformation
Change has always been, and shall always be pervasive, but its impact cost across business domains is becoming more ubiquitous and industry is now required to re-think and re-plan how we adapt, connect, and engage.
Digital technologies and approaches such as Agile, Design Thinking, Cloud-based Services, and Modular Architecture may not help by themselves as these technologies need to be applied within an appropriate framework and context.
Nor will hiring a Systems Integrator to fill the ‘large program expertise hole’ that may exist in most Enterprises, since it has different incentives—scope creep or delays increase its revenue—and is focused on delivering against the contract rather than ensuring you are doing everything needed to manage the program effectively.
The Research and Outcomes are becoming quite clear - despite our best intentions and efforts of our Sponsors and Program Leaders, early cost and schedule overruns end up, on average, much worse in most programs; often costing ‘a multiple’ more than initially anticipated.
Restoring the Balance through Risk Management
Due to the dynamism and the interoperability of capabilities within a modern Enterprise, it is becoming impossible for key project stakeholders to solve every issue in isolation; regardless of how zealous or aggressive a course of intervention is taken across the number of domains that may be impacted.
A balance must be applied to reduce the multiplier effect of risk and restores the focus and treatment on project outcomes and integrity, plus the triple constraints of Scope, Schedule, and Cost, viz. the targeted balance of influence in the diagram below.
The DirigerBPI Risk Management Methodology
Diriger has developed its Risk Management Methodology over several years; a methodology that has been primarily driven by Customer requests to either provide Program Recovery Services or carry out Program Audits and Monitoring capability.
Diriger uses its propriety OutPerform Planning Methodology coupled with industry standard Domain Capabilities aligned with the business and program Domains and imperatives based on the HoShin KanRi model shown below.
How Diriger can help
Project Risk Planning It is imperative that project risk planning workshops be carried out during the framing of the initiative’s business case and if necessary, in more detail during the project Initiation and Planning stages. Early planning ensures that the IT or OT initiative is aligned to the Enterprise’s Drivers and Strategy.
Project Audits It is also imperative that assessments of the effectiveness of risk treatment be carried out at regular intervals during large, complex, and expensive projects where even the slightest scope creep or delays can result in budget blow-outs in the millions of dollars.
Sub-Optimal Process Assessments Not only does Diriger offer solutions to improve efficiencies and reduce technical debt, but our process-based workshops can also help with Operational, Technical and Business risk modelling and reduction.
PMO Monitoring and Control It is critical that a monitoring and control regimen be established within the organisation for all projects or initiatives that have registered ‘treatments’ that require regular monitoring for effectiveness. Training can be provided to the PMO representatives should they not be familiar with modern risk management techniques.
About the Author...
Greg Towne is a Co-Founder of Diriger with 35+ years of experience implementing and recovering large programs of work (ERP’s, Operating Technologies, and BPI Initiatives) in Mining, Utilities, Energy, Transport and Defence. He is dedicated to working closely with our customers to help them solve the BIG problems that have been in play for far too many years.
Greg is a certified PMP and has developed his risk management learnings and the OutPerform Methodology from his groundings in the Military, large multi-national corporations, and development leadership of ISO standard methodologies.