Some Key Risks Lengthy Projects and How To Mitigate Them
A high-dollar, high-visibility, long-term project for a
customer ready to spend top dollar on a successful solution sounds like a great
opportunity. A career-changer, a resume-booster, and attention-getter. A very
desirable scenario... right? Well, yes it, it definitely can be if it goes
well, is deemed successful and doesn't become an albatross in the overall
project portfolio for the organization. It can be if you are up for the
challenge and know the possible risks.
The problem with longer term projects is that, you can
never really do enough planning to cover all of your exposure points on a
project that will potentially run for months. I’ve managed many long term, high
dollar projects and programs and each were very rewarding./ But I earned my pay
on every one of those long projects – teams change along the way, timeframes
become a problem, money can dry up, and organizational focuses can change. They
can be extremely challenging to manage and issues can come at you from every
So what are some of the key challenges on long running
projects? For me these five make up a general list...
High potential for excessive or numerous change orders
Any time a project is stretched over a long period of time,
the potential for change orders will likely increase exponentially. The longer
the project goes, the more risk exposure there is, the more issues that are
encountered, the more scope changes – both necessary for changing processes and
because the customer has requested more work or functionality – that are likely
to exist. I'm not saying this is all bad because most of the time a change
order will be adding revenue for the delivery team organization. But many change
orders on an engagement can leave a project client feeling frustrated – even if
they requested them and needed them. There is no way to avoid this, or even
really mitigate the change orders and additional costs to the customer. The
best thing the delivery organization can do is to be very fair in the pricing,
possibly give a little work away for free and document each change order in
detail as to show professionalism and accountability.
Welcoming of extra potentially encountered risks and issues
Trouble comes quickly and slowly. But the longer you are
exposed to the elements on a project the more the likelihood you could get
burned. Risks and issues arise over time as work gets tangled and changes
happen. The quick projects can happen almost without incident, but the longer
the project the chance for business process changes, scope creep, change
orders, new needs, requirement changes, etc. with every change comes potential
risk or issues. Good upfront planning can help mitigate some of this by
enabling the team to get better requirements, but no amount of planning is
going to completely eliminate this risk or exposure.
Exponential difficulty staying on time and on budget
Another key risk in the long-term project – staying on time
and likewise staying on budget. Things like scope management, resource
management, testing and task management always make schedule and budget a
challenge, and the longer the project the bigger the challenge. As I already
mentioned longer projects are likely to have more risks, issues and change
orders. How do you avoid the time slippages, deliverable delays and budget
overruns. Other than tight management and good planning you really can’t. Be
sure to plan in the schedule for enough time for things like planning, requirements
definition, deliverable and testing reviews and sign-offs and budget oversight.
I always say that weekly budget review and re-forecasting is very critical. A
10% budget overage caught early is fairly easy to correct. A 50% overage that
got out of hand because no one was watching weekly expenses is nearly
impossible to fix.
Higher likelihood to need to replace or exchange project
As other high priority projects kickoff and need specific
skill sets within the organization thus needing to “steal” resources from long
running initiatives, the likelihood you could lose a key resource to another
project increases. It happens and the onboarding process – if you can find a
good replacement – can be time consuming and expensive. And if you can't find a
good replacement right away, it can cause project delays. Project delays,
changing resources, missed deliverable dates – these all cause issues with the
customer. The best thing you can do is keep your resource forecast up to date
and as detailed as possible so your project may be less likely to be a target
when someone comes looking for a particular skill set for their project. Be
accurate, be detailed.
Organizational focuses and priorities shift
This can happen at any time on any length project or any
size project. But when you have a project that runs for, say, 18 months you
have a decent chance of running into the latest Lean or Continuous Improvement
change of focus or even environmental or industrial changes that can shift the
company priorities and focus. Leaderships change, every year seems to bring new
company focuses and resolutions and industries can change, too, forcing a
company to go in a different direction. All of these changes can affect ongoing
projects significantly – even cancel some that aren't performing. So being
aware of these potential changes and watching changes in your organization
while your project is still in progress is very important – especially if your
project is already in trouble or experiencing issues. You and it may be
considered excess expense areas when the time comes to make certain changes.
The best thing you can do is continue best practices, keep the project and team
performing well and keep the profit margin as high as possible so that it is a
positive revenue stream for the organization as it's going through changes...
not a negative one.
Summary / call for input
Long projects are long projects... they have to happen. But
managing the long project vs. the short project can be very different. Keeping
scope, team, customer team, etc. intact throughout can be challenging if not
impossible. It takes a different kind of management style – it's not just about
getting it done and managing the team well. It can mean more negotiations,
conflict management, certainly some skillful customer management and the metal
and mental to make it for the long haul.
Readers – what's on your list of risks and difficulties in
managing the longer projects? What strange happenings have you encountered and
how have you dealt with issues to mitigate their impact?