HOW TO MANAGE PROJECTS AND MINIMIZE RISK
GUIDE ON HOW TO MANAGE PROJECTS SUCCESSFULLY AND MINIMIZE POTENTIAL RISKS
When planning a project it is crucial that the risks are identified and the potential solutions are planned to prevent major delays in the construction of the project, or prevent major costs to the project.
Financial Risks
The financial risks can create major problems for the project if they are not identified in time and dealt with effectively. For example, if the project will need more materials due to a failure in predicting the amount of materials needed and there are no funds planned and in case errors the project can be delayed until the right amount of funds are being raised to cover the extra costs. Therefore a potential solution for this risk is to plan a set budget for margins of error which might create extra costs.
Resource Risks
Examples of resource risks are delays in the arriving of construction materials or lack of work force which can speed up the progress of the project. If the supplier is delaying the shipment of the materials needed to complete the project, then the whole project can be brought to a halt which will create delays in the completion of the project. This means that the planned timescale is not being met or respected and this is a negative factor in the progress of the project. There can also be a lack of workforce as there can be a strike taking place at the time of the progress of the project, which takes all workers away from the project for a particular period of time. In order to plan solutions for these potential risks the project management team must be able to predict the length of time that the project will take to complete after which a set amount of days must be added in case of error or delays.
Schedule Risks
There are risks involving the timescale of the project which refers to the delays created by numerous factors such as weather conditions, accidents etc. Some of the factors affecting the deadline of the project are listed and described above. Therefore, one way to plan for factors affecting the deadline of the project, such as weather, is to plan the construction of an established building for example in a favorable time of the year (e.g. summer).
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Political Economical Social Technological (PEST) Risks
There are also political risks involving the changes in legislation (e.g. legality of building materials or chemicals), economic risks involving the economic situation of the country (e.g. inflation or crash of the stock market) which can add to the costs of the project, social risks where for example, the residents of the surrounding area do not agree with the changes in the landscape create by the project and also technological risks where for example, devices or machinery used in the construction of the project can fail to function. The project management team should conduct constant research in order to be up to date with the latest legislation and regulations made by the government. In order to avoid social risks, the project management team should carry out a local survey where the residents of the local area can give their input on the construction of a particular building for example. Furthermore the technicians operating the technological machines used in the construction of the project must ensure that they are thoroughly checked before utilizing them.
Aims, Objectives & Scope
It is highly important that aims and objectives are discussed and agreed of between the client and the project management team as this will set the vision for the project. The aims of the project will decide what the client wants to achieve precisely in order to avoid complications and mistakes, when the client wants the project to be completed by – taking in consideration what it is physically possible, and the order of the different stages to be completed. The aims and objectives will be agreed by both parties as the project management team knows exactly what can be achieved and how to approach the vision of the client.
The aims and objectives contribute to create the scope of the business which shows exactly what the project is and how to approach the completion of it. For example, the project management team will know exactly what each room should include (i.e. specific wiring for computers and internet connection), design of interior (e.g. elevator, emergency exits etc.).
Project Timescale
The timescale is one of the most important factors which the project management team have to respect and complete. Therefore it is one of the most important factors to be discussed and agreed on when planning the project as the time scale will decide exactly how much time to assign for each stage of the project. However the client might have an unrealistic timescale requirement which is not physically possible in terms of building prospects, which is why the project management team have to set realistic time targets and agree these with the client.
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Project Budget
The budget can decide whether the project can be started or successfully finished. Therefore it is highly important that the project management team pitches a realistic and accurate cost of the project which will leave the client to provide the exact cost required upon mutual agreement. When discussing the budget, the client can consider whether to accept the costs presented by the hired project team or to choose a cheaper version of the project, which might lead to the modification of the project. This is why discussing and agreeing the budget is highly important as the project will not begin if the client don’t have the right budget.
Project Resources
When planning the project, both parties should take in consideration the resources required for the completion of the project. The resources can involve the materials, their quality, the cost of materials and the location of the suppliers in terms of distance to the project location as transport can add up to the costs. Also the resources can be the support from hired companies such as surveyors, building companies and organisations which will finance the project. Agreeing to resources such as these can prevent complications such as delays or having to completely remake parts of the project which can add to the costs of the project and also be time consuming.
