How to Identify Risk Factors in Your Project

2 of 9 in Series: The Essentials of Managing Risk in Your Project

A risk factor is a situation that may give rise to one or more project risks. A risk factor itself doesn’t cause you to miss a product, schedule, or resource target. However, it increases the chances that something may happen that will cause you to miss one.

For example: The fact that you and your organization haven’t undertaken projects similar to the present one is a risk factor. Because you have no prior experience, you may overlook activities you need to perform, or you may underestimate the time and resources you need to perform them. Having no prior experience doesn’t guarantee you’ll have these problems, but it does increase the chance that you may.

Start to manage risks at the outset of your project, and continue to do so throughout its performance. At each point during your project, identify risks by recognizing your project’s risk factors. Use your project phases as well as your overall project plan to help you identify risk factors.

All projects progress through the following four life cycle stages, and each stage can present new risk factors for your project:

  • Starting the project

  • Organizing and preparing

  • Carrying out the work

  • Closing the project

Here's an example of possible risk factors that may arise in each of these stages.

Possible Risk Factors That May Arise during Your Project’s Evolution
Life Cycle Stage Possible Risk Factors
All You or your team spends insufficient time on one or more stages.
Key information isn’t in writing.
You or your team moves to a subsequent stage without completing one or more of the earlier stages.
Starting the project Some background information and/or plans aren’t in writing.
No formal benefit-cost analysis has been done.
No formal feasibility study has been done.
You don’t know who the originator of the project idea is.
Organizing and preparing People unfamiliar with similar projects prepare your project plan.
Your plan isn’t in writing.
Parts of the plan are missing.
Some or all aspects of the plan aren’t approved by all key audiences.
Carrying out the work People on the project team didn’t prepare the plan.
Team members who didn’t participate in the development of the project plan don’t review it.
You haven’t made an effort to establish team identity and focus.
You haven’t developed any team procedures to resolve conflicts, reach decisions, or maintain communication.
Needs of your primary clients change.
You have incomplete or incorrect information regarding schedule performance and resource expenditures.
Project-progress reporting is inconsistent.
One or more key project supporters are reassigned.
Team members are replaced.
Marketplace characteristics or demands change.
Changes are handled informally, with no consistent analysis of their effect on the overall project.
Closing the project Project results aren’t formally approved by one or more project drivers.
Project team members are assigned to new projects before the current project is completed.

Here are risk factors that different parts of your project plan may suggest.

Possible Risk Factors Related to Different Parts of Your Project Plan
Part of Project Plan Possible Risk Factors
Project audiences Your project has a new client.
You’ve had prior problems with a client.
Upper management or other key drivers show only mild interest in your project.
Your project doesn’t have a project champion.
Not all project audiences have been identified.
Project background Your project derived from a spontaneous decision rather than a well-thought-out assessment.
You don’t have conclusive proof that your project will eliminate the problem it addresses.
Your project can’t start until one or more other planned activities are completed.
Project scope Your project is unusually large.
Your project requires a variety of skills and knowledge.
Your project involves different organizational units.
Project strategy You have no declared strategy.
Your project involves a new, untested technology or approach.
Project objectives and deliverables One or more objectives or deliverables are missing.
Some performance measures are unclear or missing.
Some performance measures are difficult to quantify.
One or more performance targets or specifications are missing.
One or more objectives or deliverables haven’t been approved by all drivers.
Constraints Your constraints aren’t written down.
Your constraints are vague.
Note: In general, all constraints are potential risk factors.
Assumptions Assumptions aren’t written down.
Your assumptions are vague.
Note: In general, all risk factors in all assumptions are potential risk factors.
Work packages and activities Work packages or activities are insufficiently detailed.
Not all team members participated in preparing descriptions of their assigned work packages and activities.
Roles and responsibilities Not all supporters were involved in developing their roles and responsibilities.
You have an overdependence on one or more people.
No primary responsibility is assigned for one or more activities.
Two or more people have primary responsibility for the same activity.
No one person has overall responsibility for the project.
Schedule (activity-duration estimates) Time estimates are backed into from an established end date.
You have no historical database of activity durations.
Your project involves new procedures or technologies for some activities.
Activities are performed by team members you haven’t worked with before.
Schedule (activity interdependencies) Interdependencies aren’t specifically considered during schedule development.
Partially related activities are scheduled simultaneously to save time.
Your project plan uses no formal analytical approach to assess the effect of interdependencies on the schedule.
Personnel Your project plan has no estimates for actual work effort required to perform activities.
Your project plan doesn’t formally consider availability or efficiency.
Your project plan has no detailed work schedules for people working simultaneously on two or more tasks.
Your team includes one or more new or inexperienced team members.
Other resources You have no plans to identify the type, amount, or timing of required nonpersonnel resources.
Funds You have no project budget.
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