Identifying risks early in the project and portfolio lifecycle is crucial for proactively managing threats and capitalizing on emerging opportunities. While risk identification often begins at the project level, portfolio-level risk identification requires broader awareness of organizational strategy, resource interdependencies, and external trends. By using multiple techniques—ranging from structured brainstorming sessions to data-driven indicators—CIOs, PMOs, and senior IT leaders can build a robust process that ensures no major risks go unnoticed. Below are common, foundational risk identification techniques, along with practical tips for incorporating them into PPM.
8.3.1 Brainstorming and Workshops
Definition:
A collaborative exercise where stakeholders gather to generate ideas and discuss potential risks—both threats and opportunities.
How It Works:
- Cross-Functional Participation
- Include representatives from various departments (IT, finance, operations, legal, etc.), ensuring a wide range of perspectives.
- Focused Topics
- Structure sessions around specific areas such as technology integrations, budget constraints, regulatory changes, or resource availability.
- Facilitated Approach
- Use a facilitator to guide discussion, keep the group on track, and record all potential risks.
- Categorization
- Group similar risks by category (technical, financial, compliance, operational, external) to ensure clarity and coverage.
Advantages:
- Promotes team alignment and open communication.
- Taps into collective expertise and institutional memory.
Potential Pitfalls:
- Can become unfocused if not well-facilitated.
- May overlook deeper systemic risks if participants focus only on their immediate areas of concern.
8.3.2 Lessons Learned from Past Projects
Definition:
Leveraging historical data and insights from completed (or even canceled) projects to anticipate recurring or common risks in future initiatives.
How It Works:
- Document Repositories
- Maintain an accessible archive (e.g., PMO knowledge base) of project post-mortems or retrospectives.
- Pattern Recognition
- Identify repeated issues (e.g., consistent vendor delays, integration challenges, resource bottlenecks).
- Continuous Updates
- Update the lessons learned database at major milestones and after project completion.
- Integrate with Stage Gates
- Incorporate a step at each gate review requiring teams to consult the relevant lessons learned.
Advantages:
- Prevents “reinventing the wheel,” saving time and reducing mistakes.
- Builds an evolving institutional memory for risk identification.
Potential Pitfalls:
- Lessons learned documentation can be neglected or incomplete.
- Organizational culture may not encourage honest reporting of issues, leading to knowledge gaps.
8.3.3 Checklists and Industry Frameworks
Definition:
Predefined lists of common risks or standard industry frameworks (e.g., ISO 31000, COSO ERM) used as a baseline to ensure consistency and coverage.
How It Works:
- Generic vs. Customized Checklists
- Start with a general checklist of typical risks, then tailor it to the organization’s domain (e.g., financial services, healthcare) and technology landscape.
- Industry Standards and Best Practices
- Refer to widely recognized frameworks (NIST, PMBOK risk guidelines) to ensure no critical area is overlooked.
- Periodic Review and Update
- Refresh checklists regularly as new threats (e.g., cybersecurity) or regulations emerge.
Advantages:
- Prevents missing obvious or well-known risks.
- Speeds up the identification process, especially for novices or new hires.
Potential Pitfalls:
- Risk of “checklist fatigue,” where teams view the process as a rote compliance task.
- May not capture unique or emerging risks outside the standard template.
8.3.4 Expert Interviews and Stakeholder Input
Definition:
One-on-one or small-group sessions with subject matter experts (SMEs), project managers, business owners, and even end users to gain deep insights into potential issues.
How It Works:
- Identify Relevant Experts
- Technical leads, security architects, finance controllers, legal counsel—anyone with specialized knowledge relevant to the portfolio.
- Structured Discussion Guides
- Prepare questions that probe specific risk domains (e.g., “What’s the worst-case scenario if this project underperforms?”).
- Recording Insights
- Summarize and categorize risks in a central register or repository to share with the broader PMO and steering committee.
- Validate with Additional Sources
- Compare expert opinions with data (performance metrics, market research) to confirm or refine risk assessments.
Advantages:
- Provides nuanced, in-depth perspectives that might not surface in group sessions.
- Builds rapport and trust with key stakeholders who appreciate being consulted early.
Potential Pitfalls:
- Over-reliance on a single expert’s opinion if broad input is not sought.
- Can be time-consuming, especially in large or global organizations.
8.3.5 Early-Warning Indicators and Data Analytics
Definition:
Leveraging quantitative data—such as KPIs, project metrics, or market indicators—to spot trends that suggest rising risk levels.
How It Works:
- Define KPIs and Thresholds
- For example, if a project’s burn rate exceeds a certain threshold, it flags a potential budget risk.
- Automated Monitoring
- Use dashboards or business intelligence tools to track real-time data (e.g., velocity metrics in Agile, resource utilization, cost variance).
- Actionable Alerts
- Establish triggers that notify the PMO or portfolio managers when metrics deviate from expected ranges.
- Trend Analysis
- Look for patterns over time, such as consistent schedule delays in certain types of projects or persistent resource constraints in specific departments.
Advantages:
- Objective, evidence-based approach to early risk detection.
- Scalable and repeatable, especially in large portfolios.
Potential Pitfalls:
- Over-reliance on metrics without context can lead to false positives or missed emerging threats.
- Data quality issues (incomplete or inaccurate data) can undermine confidence in the indicators.
8.3.6 Combining Techniques for Comprehensive Coverage
A robust portfolio-level risk identification process often blends multiple techniques to ensure depth and breadth. For example, a PMO might:
- Start with checklists to cover standard concerns.
- Conduct brainstorming workshops to gather initial inputs.
- Follow up with expert interviews for more detailed exploration of specific high-impact areas.
- Continuously monitor data analytics for ongoing risk signals.
- Integrate lessons learned at each stage gate to refine and update the overall risk profile.
Result: A multi-layered approach that captures both common and unique risks, reduces blind spots, and aligns risk identification efforts with strategic business objectives.
8.3.7 Practical Tips for Effective Risk Identification
- Engage Early and Often
- Don’t wait until a project is well underway; start risk identification at the ideation or proposal stage.
- Foster a “No-Blame” Culture
- Encourage open dialogue about potential issues without penalizing team members who raise concerns.
- Document and Validate
- Capture identified risks in a shared repository and regularly validate them for ongoing relevance.
- Scale Up or Down
- Tailor techniques to the size, complexity, and maturity of the organization; smaller teams might rely more heavily on workshops, while large enterprises can leverage sophisticated analytics.
- Review and Refresh
- Periodically re-check identified risks and add new ones as conditions evolve (e.g., market changes, new tech trends).
8.3.8 Key Takeaways
- Variety of Techniques: No single approach covers all angles; a combination of qualitative and quantitative methods is recommended.
- Broad Involvement: Ensure representation from different functional areas, from technical SMEs to finance, to capture the full spectrum of risks.
- Continuous Process: Risk identification isn’t a one-and-done exercise—regular check-ins and updates keep the process current.
- Integration with Governance: Incorporate risk identification insights into stage gate decisions, steering committee reviews, and executive dashboards.
By employing these basic risk identification techniques, organizations can lay a strong foundation for more sophisticated risk analysis and portfolio-wide mitigation strategies. Ultimately, this proactive approach prevents costly surprises, aligns with strategic objectives, and fosters a culture of continuous improvement across the IT portfolio.
