Imagine you’ve recently taken up a project after meeting with a client and understood what they wish to achieve through their vision. You gather your entire team to plan out how to execute the project within a set deadline. You allocate your resources and assign specific goals to your team members and everything is going as per your plan.
But, after a month, the client contacts you with a change in their vision - they now want to cater to a whole new target audience with their project or product. Now, this was something you or your team couldn’t have anticipated at all!
So, what do you do? How do you change your process one month into the project execution?
Unanticipated risks can crop up in a project anytime, and it is how you manage them that makes or breaks its execution and potentially lead to project failure. This is why it is important to have a robust enterprise project management software in place to not only manage but prevent and resolve project risks immediately.
But, before we jump into the solution, let's understand the different risks that your enterprise can face during project management lifecycle.
Common Project Risks
Project risks can be broadly categorized into two types:
- Internal Risks - Risks that usually pertain to the project itself
- External Risks - Risks that are generated outside the scope of the project
There are six common project risks that have a negative impact on projects, ultimately resulting in failure. They are:
Financial risks include all risks that are related to project financing, including operations, equity, execution, and production. Few examples that can be considered as financial risks include funding cuts, cost overruns, and inaccurate cost estimates.
Technological risks include all the problems that may occur in a project due to technological failures. This could include anything from defining a new feature in an application to its implementation.
A few factors that cause technological risks are neglect in product design, inaccurate anticipation of software or hardware dependencies, and unavailability of technology. This risk also includes technological components that are not scalable, interoperable, compliant with standards, and full of security issues.
Economic risks cover all risks that have a macroeconomic impact on a project. A few factors that are attributed to economical risk include insurance, minimum wage, taxes, duty rates, material or technology costs, and market prices.
Social risks, as the name suggests, includes all risks that have a social and cultural impact on a project. This includes people risk and other factors that have a negative impact on brand or reputation.
Environmental risk can vary from weather conditions to the company environment. These risks are usually unpredictable and, therefore, extremely difficult to manage or prevent.
Political risks are extremely important to consider when evaluating potential risks that may come up during project implementation. However, according to the Forbes Global Risk Management Study, “most companies neither measure or manage political risk”. Political risks include all local, state, and national risks, along with code and regulatory impediments.
Now that we have talked about the six common project risks, its time to talk about solutions! According to a study by VisionOne,
The percentage of organizations that used spreadsheets to manage multiple projects went down from 74% to 67% between 2015 to 2016.
So, what did they move on to? Three words - Enterprise Management Software!
Recommended Read: Avoid Project Failure by Handling Risks Early
How and why EPM software is a great solution?
Easy Definition of Project Goals and Objectives
Project Management Institute concluded in a study that
37% of project failures can be attributed to an unclear or inaccurate understanding of project goals.
To tackle these risks, enterprise project management (EPM) software tools such as ProProfs Project, provide a platform that allows users to breakdown project objectives and what it entails for all stakeholders. This, in turn, makes sure that the project goal is not only defined accurately but is known and understood throughout your team and stakeholders as well.
Efficient Team Collaboration
The most common reason for project risks to occur is inefficient or incomplete team communication. As most companies in today’s world have teams distributed all over the world - or hire freelancers - keeping in touch with teams has become a more difficult task. This takes a toll on the overall project implementation, leading to numerous issues and risks.
But, choosing a robust enterprise work management makes sure your team can connect in real time, from any time and anywhere! Such software also offers features that allow you to receive email notifications so that you are always up-to-date about any development in current tasks or additional upcoming tasks.
All in all, EPM software makes team collaboration extremely easily, therefore, reducing the overall risks that can occur due to lack of team communication.
Effective Team and Project Management
Is your team unable to meet deadlines? Are you unable to pinpoint the cause of what is making so many gaps in the defined project timeline?
Well, this is another top reason why projects fail. The risks of such actions can usually be evaluated, but doing it manually is a daunting task - and sometimes impossible.
The ideal way to tackle this problem and manage both your team and projects efficiently is to choose an appropriate enterprise management software that offers all the necessary tools. From managing multiple projects and tasks on a single dashboard to adding time trackers to different tasks, the software offers multiple tools to effectively manage teams and projects - without any hassles!
Project risks are inevitable, however, it is always beneficial to be prepared beforehand and tackle them immediately to avoid any future problems. EPM software is the ideal way out and is gaining popularity among people, nowadays, From keeping track of team members and their progress to generating thorough reports, the software offers it all and much more to manage projects effortlessly and efficiently!