Risk management


But transformation projects are difficult: worrying about them can even stop us sleeping.

There are times in difficult projects when we feel we are at the bottom of a hole: we want to give up.

We can calm things down by carrying out an objective risk analysis.

Risk management provides clarity during the course of the project.

  1. Transformation is more complex than the Operations

    We know how to Model the "Order" Operational Process, but we do not know how to Model the "Building a Solution" Transformation Process very well. There are many uncertainties:

    • Uncertainties about the deliverable
    • Uncertainties about the Solution Architecture
    • Uncertainties about the course of the Project
    • Uncertainties about the level of acceptance by the Operational Actors.

    They require the Project manager to have the necessary talents to make decisions in an uncertain environment.
    We have gradually managed to Model the Transformation Management Functions: governance, scheduling, budget, resources, communication...
    We still have not managed to properly Model the Transformation Engineering Functions: how to define the Goal, how to Architect a Solution, how to reuse Components, how to Build a Solution, how to integrate different Models, how to give flexibility to the organization...

    1. Different Transformation Processes

      There are different Transformation Processes: Build a Product Model or a new Solution, Build Foundations, Define a Road Map,...
      Furthermore, alongside the Foundation Projects and Solution Projects, some Enterprises have created the category "Innovative Project". These Projects entail a greater part of risk. They are often eliminated by the classic Governance Processes which do not encourage risk-taking.
      This type of innovative project can represent more than 10% of Transformation Projects. They undertake a different governance and apply a more flexible Transformation Process.

    2. What are the risks?

      Actually, the main risk is that of uncertainty: we are not sure that a Transformation project will succeed.

      1. The main risks

        • Unrealistic or unstable goal
        • Lack of support from the Sponsor in difficult moments of the Project
        • Dispersion and average quality of the Transformation team
        • Reproduction of what already exists
        • Tests are carried out at the end, rather than throughout, the project
        • Generalization with tests in a pilot site
        • Ignoring the Deployment and acceptance by Operational Actors
        • Bureaucracy and slow decision making

      2. The difficulties of a Transformation program may see investors lose confidence

        A business model's vulnerability comes from how quickly information travels. For a large Enterprise, one piece of bad news can result in several billion dollars being wiped off its market capitalization: see the example of Tesla (in French).

  2. How can we protect ourselves from the risks of Transformation?

    We cannot guarantee the success of a Transformation Program.
    We can only increase the likelihood of success and identify the risks at the source.

    1. We can increase the likelihood of success

      By actions such as:

      • An experienced program management team: if a team has previously succeeded in a Transformation Program, then it has a strong likelihood of succeeding again. We have to know how to retain these talents in the Enterprise.
      • A smaller design team, but a high quality one
      • Total transparency: do not hide problems
      • A fast decision-making process
      • Splitting the Program up and having Projects manageable by small teams
      • The ability to dynamically arbitrate between the needs and the technical possibilities: we should not brace ourselves against pre-agreed specifications if we discover less expensive alternatives to solve the same problem
      • A continuous desire to not reproduce what already exists.
    2. Identify risks at the source

      To identify the risks as early as possible, we use different techniques:

      • A precise (but modifiable) schedule that enables us to see any delays, often synonymous with problems.
      • A project-tracking system, which highlights the exceptions and not the things that are going according to plan.

      Remarks: project methods like PMI or CMMI detail, over many chapters, aspects of risk management: identification of risks, defining coverage actions, risk acceptance, etc.

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