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Building a Risk Management Framework

The ultimate success of your project will depend on resolving the issues and risks associated with implementing a PPM process and solution in your organisation as well as quantifying benefits and savings.  You need to be sure that the chosen solution is fit for purpose and will solve business issues - not add to your problems!  You need to ensure that the benefits and savings will work in various aspect before you procure and implement the system.

Typical areas to address include:
Technology
· Does the proposed system run fast enough?
· Will it require additional infrastructure?
· How easy will it be to transfer data?
· Does the software interface with existing systems?

Culture
· Will people find the new system easy to use?
· Does the system use familiar terminology?
· How does the system fit with existing or proposed procedures?
· Where does it fit within your project management maturity environment?

Answering these questions using traditional evaluation techniques can be difficult and proactive management of risk is vital.  Since PPM deployment is a change management project we recommend implementing a project based risk management framework.

Within the framework we establish possible events or circumstances that may have a negative effect on the project and put in place a contingency plan to reduce or eliminate the risk.

Some factors that need to be taken into consideration

· Description – the nature of the risk
· Precautions – consider what can be done to mitigate the risk
· Consequences – the possible effects if the risk occurred
· Identification – choosing unique identifiers for referring to the same risk in company or project documents
· Risk status – classification as new, ongoing or closed
· Risk escalation  - estimating the probability of the risk becoming a liability
· Schedule impact – estimating the consequences in terms of time/budget for the project

In order to manage project based risk it is essential that a risk management plan is drawn up for the project and that specific responsibilities are allocated for activities and tasks. Moreover the project risk database must be kept up to date and reviewed regularly to ensure that it takes account of any changes.