8 min read
May 05, 2016
Project Portfolio Management

Managing Risk and Uncertainty With Predictive Project Management Tools

Predictive project management tools aims to give teams increased foresight into the risks and uncertainty attached to different tasks. 

Samuel ScottContent Analyst

In this post, written with help from LiquidPlanner, I will explain the purpose of predictive project management tools, how to identify sources of risk and uncertainty, how to prioritize specific risk factors and also briefly highlight the current trends in project management methodology. Read on to find out more!

Group 3@1x Created with Sketch.

What is the Purpose of Predictive Project Management Tools?

Standard project management tools allow businesses to set up projects and allocate individual tasks to employees. These tools allow businesses to pick a specific amount of time to associate with each task, allowing for both supervisors and employees to understand how long an overall project will last. However, these tools lack the flexibility to anticipate tasks taking longer than expected. When this occurs the entire scheduling of project can be knocked off balance, leading to issues in time management and general productivity.

This highlights a significant weakness in the efficiency of standard project management solutions. In comparison, predictive project management tools helps to predict problems before they occur. These tools help to highlight the sources of risk and uncertainty in project management through best/worst case estimates, priority-based schedules and time tracking mechanisms.

Group 3@1x Created with Sketch.

How Can You Identify the Main Sources of Risk and Uncertainty?

Risk and uncertainty can occur in many different ways as part of your project management process and identifying them early is key. The two main contributors to a project’s uncertainty are unclear direction and unexpected work. Both of these factors can arise once a task is started, but they can be avoided by planning in advance or implementing workflows which can respond to these unexpected occurrences.

Best/worst time estimates for a task are the best tool for responding to sudden changes in task direction. These are important when initially planning a project as a business may know which direction they want to go and what they want to achieve, but midway through the project they may want to switch approaches.

Problems will not arise until employees actually start working on a task and while it is hard to predict when this will occur, the implementation of flexible planning strategies is increasingly helpful for minimizing the level of uncertainty. Understanding this level of uncertainty is important for managing the length and success of each individual project. The use of flexible timing strategies is therefore vital in making sure that uncertainty is minimized as much as possible in every project.

Group 3@1x Created with Sketch.

Which Risk Factors Should Be Prioritized?

Predictive project management tools can be counter intuitive as it is impossible to worry about every source of risk in a task. To help choose the most optimal risk factor to target I asked the team at LiquidPlanner to help explain the best approach for combating uncertainty.

The first step they recommend is to pick the risk factor which, if uncertainty occurs, would have the greatest impact upon a project’s length. In addition, focusing on the issues in the near term are vital because once you have identified an area of uncertainty, it may cause you to switch courses.

The second step recommended by LiquidPlanner is to focus on the critical path: the pieces of work which have the most impact on your schedule if they take longer than expected. This form of prioritization helps you to minimize the overall length of a project by allowing you to accelerate the pieces of work that are sequential and cannot be started until a preceding piece of work is completed.

This method of prioritization and short term targets can be used best when you are able to adapt your risk finding strategy based on the project methodology that your business subscribes to. The critical path approach is incredibly important for businesses that use a Waterfall methodology. Through Waterfall, a full project plan in its sequential steps are clear at the outset of task, therefore choosing the specific tasks that you should be prioritizing and accelerating is easier.

For businesses that instead subscribe to a more fluid project planning approach such as a form of Agile, the critical path route is not as appropriate. This methodology requires less-up front planning and prefers continuous interaction and team communication, therefore identifying the short term causes of risk is increasingly important.

Group 3@1x Created with Sketch.

What are the Current Trends in Risk Management?

When optimizing the identification of risk factors, choosing an appropriate project management methodology is important. To help make that decision easier I asked LiquidPlanner what trends and developments are currently appearing in methodology choice.

Waterfall has been the main approach taken by businesses, a strategy that aims to provide a team with a full project plan in its sequential steps. However, in more recent times businesses have decided to adopt new flavors of Agile which include Extreme Programming (XP), Scrum and Continuous Delivery (CD.) These methods have emerged and rapidly gained popularity with each approach leading to an alternative way of managing and mitigating your risk factors.

  • XP is being adopted by teams who want to improve software quality and customer responsiveness as it is focused on short development cycles and frequent product releases.

  • Scrum places a large emphasis on flexibility, self-organization and communication, both within teams and customers.

  • CD enables development teams to accelerate software delivery by allowing for constant and incremental product updates. It is beneficial when processes are streamlined, automated and highly repeatable.

Group 3@1x Created with Sketch.

Wrapping Up

In this post I have highlighted how you can better identify risk factors and sources of uncertainty in your project planning workflows. Predicative project management solutions are quickly becoming fantastic tools for optimizing this approach, and picking the best project management methodology for the specific needs of your business is key.

Thanks for reading! And thanks to LiquidPlanner, the predictive project management solution who helped in the writing of this article!

Back to top