Project Risk Assessment

Summary

Used by the leadership team to evaluate whether a potential project can be brought to successful completion on time.

Answers the questions:
  • Are potential projects properly scoped? Does the process have ongoing defects?
  • What is the likelihood that a proposed project can be completed on time?
  • What is the likelihood that the necessary resources for the proposed project will be available? This could include capital investments, support from external organizations, and team resources.
  • What is the likelihood that the projected benefits will accrue as predicted?
  • Are any potential issues (such as regulatory approvals and marketplace) beyond local control?
When to Use Purpose
Pre-project Use to evaluate project parameters such as capital, involvement of external organizations, regulatory approvals, team resources, and so on, and the likelihood of obtaining them.
Pre-project To ensure that you start only projects with a reasonable chance of success.
Pre-project For critical projects, use to identify potential project roadblocks early in the process.

Data

No data requirements exist because you only use this tool to collect and organize data.

How-To

  1. The evaluation criteria is broken down into four categories: scope/definition of project, deployment/leadership, team leader, and project closure/benefits.
  2. Each category contains predefined risk factors. The Six Sigma leadership team should make any changes to the list of risk factors.
  3. Each risk factor has an assigned weight that should be defined by the Six Sigma leadership team.
  4. Evaluate and rate the impact of each risk factor on the project.
    Qeystone uses the following scale:
    • Yes = 1
    • Probably = 3
    • Maybe = 4
    • Probably Not = 5
    • No = 10

    For example, for a project without a clearly identified customer, the associated risk factor would be given a rating of No, which translates to a score of 10 times the weight for that risk factor.

  5. Sum all the ratings to obtain a total risk assessment value which reflects the risk of timely and beneficial project completion.

Guidelines

  • Scales can be different for different resource constraints to provide inherent weighting; for example, capital 0 to 10, support availability (such as MBB) 1 to 3, and regulatory approval 0 to 100.
  • The project risk assessment tool is a supplement to the project prioritization matrix. You can use the total risk score from the risk assessment tool as an aid in determining the ease of completion score in the project prioritization tool because projects with large risks are viewed as being more difficult to complete.
  • Completion of the project risk assessment is best done as a team exercise. Ensure you have team members representing various functions of your process.
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