Probably, you have already heard about residual and secondary risks in a project without having a clear idea of what it is. In this article, we will try to explain the differences between.

We all face risks on a daily basis and, consequently, risks exist even in project management.

There are those who panic, those who try not to take obvious risks, and those who try absolutely to avoid them, but in the end the risks are inevitable. There is no way to prevent risks from entering our lives. The same is true in the case of project management.

Definition of risk

The PMBOK Guide  defines a risk as “An uncertain event or situation that, if it occurs, has a positive or negative effect on one or more objectives of the project. ”

A risk, therefore, does not necessarily always damage the project. A project can also get a positive result from a risk.

The PMBOK Guide also states that Risk Management is one of the areas of knowledge that a project manager should know.

The Project Managers must, in fact, be trained in risk management in order to ensure that the obstacles faced during a project are minimized.

This means that project managers must be able to think outside the box and not always take the same road, even if in the past it has been an optimal choice. For instance, the situation could have changed.

Which types of risks exist?

In addition to the main risk inherent in any project, positive or negative, individual activities may involve secondary and residual risks.

Let’s take a look at secondary and residual risks and their definitions.

Secondary risks

The PMBOK Guide defines secondary risks as “those risks that arise as a direct result of implementing a risk response to a specific risk”.

In other words, when you identify a risk, you have a response plan that can deal with that risk.

Once this plan is implemented, the new risk that could arise from the implementation represents a secondary risk.

For example, the project manager for a construction project might know, from past experiences, that one of the main risks is that the sand supplier will not be able to deliver the goods in time. In the risk management plan created, the project manager will therefore already have taken this risk into account. The action he takes if this happens could be to get the sand from a different supplier. However, a potential risk that the project manager may encounter in this case, is that there may be differences in the sand provided by the former compared to that provided by the second supplier, which would be a secondary risk.

Residual risks

Residual risks are the remaining risks, ie the minor risks that remain.

The PMBOK Guide defines residual risks as “those risks that are expected to remain after implementing the planned risk response, as well as those that are deliberately accepted”.

Residual risks are acceptable for the organization’s level of risk tolerance or, in some cases, a residual risk does not have a reasonable response.

Project managers therefore simply accept them as they are. If they must occur, they will occur, and there is not much they can do about it.

These risks are identified during the planning process and an emergency reserve is set up in order to manage risks like these.

Although residual risks are not particularly worrying, organizations cannot completely ignore them and should address them through:

• Identification of relevant governance, risk, and compliance requirements.
• Recognition of existing risks.
• Determination of the strengths and weaknesses of the organization’s control framework.
• Planning for appropriate contingencies.

For example, you could identify a risk in the possible rainy weather forecasted during an event lasting an hour or two, where this weather condition could interrupt some of the scheduled meetings. To manage this risk, the other meetings will be scheduled with a buffer of a couple of hours. In this way, even if it rains for two hours, the other plans will not be interrupted or postponed.

This, however, does not eliminate the risk that the program needs changes. Simply reduces it.

What is the difference between secondary and residual risks?

• Secondary risks are those that occur as a direct result of implementing a risk response. On the other hand, it is expected that the residual risks will remain after the expected risk response.
• The emergency plan is used to manage primary or secondary risks. The backup plan is used to manage residual risks. Note that if an identified risk occurs, the emergency plan is implemented and, if it becomes ineffective, the reserve plan is implemented.
• If residual risks and secondary risks do not require a response plan, they will be monitored as they occur.

Example of a situation that contains both risks

Take for example a future project manager who is studying for one of the exams to obtain the official PM certification.

When the future PM plans the study program for the exam, the main risks that can affect it are:

• suddenly he will commit himself full time to a new project that will not leave enough time to study
• He will get sick during the exam preparation

An activity to respond to the first risk – not find enough time for the study due to the professional commitment – would be to start the preparation for the exam in a low working season, taking into consideration the work model of previous years.

The residual risk for this risk response would be that an unexpected large-scale project would present itself during the preparation for the exam. In that case, it may be necessary to postpone the exam, so as to find enough time to study in the future. This could be connected with an extra cost that can be covered thanks to the contingency reserve.

In the second case, the risk response activity to avoid getting sick during the exam preparation, would consist in doing the vaccination for five of the most common contagious diseases at the time of the preparation for the exam.

The secondary risk of this risk response would be that the vaccines themselves can cause side effects or even cause infections.

 

To conclude, risk management is an integral part of project management. It includes the identification, analysis, and monitoring of all these types of risks.

Understanding how to identify and manage risks is part of everyone’s life, even in the life of a project manager.

It is important that all types of risks are identified, analyzed, monitored, and cared for during the entire project.

For a project manager, learning to distinguish and plan for different types of risks will be a valuable aid to manage resources, time, and guide the project to success more efficiently.

Is there an optimal way to present a project to stakeholders?

In the world of project management, presenting and communicating a product’s strategy is not an isolated phase of the project’s life cycle.

In fact, anyone involved in project management must deal with project sponsors and stakeholders and maintaining an open and effective communication with them is important.

In fact, it will be necessary to update the relevant stakeholders throughout the whole process, to keep everyone informed of progress and to ensure that everyone is working towards the same strategic goals.

But successful project managers also know that communication does not work in just one way and they must also seek feedback from stakeholders.

Of course, it is not possible to always listen and consider everyone, so the project manager needs to know who to talk to, when and what.

In this article, we will explain how to communicate with stakeholders at every stage of a project’s life cycle and how to obtain their consent.

How to communicate with interested parties throughout the process

There are more situations during a project ranging from planning to execution. For each of these phases, it is very important to communicate with stakeholders correctly. Let’s see the various steps together.

 Planning stage

It is important to work closely with the leaders of the organization, developing a clear vision of the product and identifying the most important strategic goals.

If the project manager and the stakeholders can agree in advance on the vision and the strategic goals of the project, there will certainly be less confusion on the definition of the priorities later.

Priority definition

Once the strategic goals are clear, priority can be given to specific tasks within the project.

This is where open communication with department managers becomes important, such as marketing, sales, customer support, etc.

It is important to discuss their main priorities and to establish together how these priorities fit into the more general themes and strategic goals.

If stakeholders are involved in the process of setting priorities, they are much more likely to favor decisions made by the project manager.

Execution Phase

Once the priorities have been established for initiatives aimed at reflecting strategic goals and a consensus has been reached between the main stakeholders, it is time to translate the vision into operative measures.

The roadmap must become now more detailed.

Here, the resources must be chosen and distributed for each initiative, assign ownership of the initiatives to the different team members and designate the deadlines.

Once the plans have been determined and the team has been set in motion, it is important to ensure that all stakeholders are always up-to-dated.

Planning meetings with the various interested parties allows the project manager to communicate the status of the project and explain what will happen in the future.

Sometimes, when an organization is very large, it becomes logistically difficult to include every single interested person. In this case, a solution is to directly involve the directors and the department managers, so that they can then pass the information to the respective teams.

Moreover, providing autonomous access to the project roadmap is another way to build consensus and engage stakeholders. In these cases, it is useful, for example, to use a project management software that includes this functionality.

This can fill potential communication gaps and prevent embarrassing conversations with interested parties who claim not to know what was being done.

Strategies for obtaining stakeholder consensus

As a project manager, it will be necessary to present the project to different audiences that have with different interests.

If the public is composed of managers, for example, the goal will probably be to convince them to accept the overall project strategy.

If the public is another segment of the organization, the goal will probably be to communicate the project’s goals and create consensus.

In both cases, it is necessary to be clear and persuasive, so that the stakeholders understand the strategy and agree with the priorities.

Here are some suggestions to best conduct this type of meetings:

1. Be prepared

Creating a presentation document is one of the steps, but it’s not enough. The project manager must be ready to tell a convincing story and justify why any planned initiative deserves to be completed.

• Structuring the presentation: a good presentation starts with the general picture and after that explaines the details. Start with the “why”, sharing strategic goals, before moving on to a more detailed explanation of “how” and “what”.
• Be concise: the content of the presentation must be simple, clear, and direct.
• Anticipate objections: be ready to respond to concerns about why certain initiatives must be pursued. This is linked to market knowledge and the use of a priority-setting plan. If the project is based on data, the project manager should have no problem justifying priorities to the stakeholders.
• Provide specific examples: it is one of the most powerful tools that can be used to convince an audience.

2. Know the audience

Bottom-up communications, such as the presentation of strategic goals to managers for example, follow a very different process than top-down communication, such as the presentation of specific task plans to developers.

In executive-oriented presentations, for example, it is important to focus on high-level issues and strategic goals.

The discussion should relate to market space, customer data, and potential return on investment.

Another audience, like the developer, may be interested primarily in specific activities, requirements, and deadlines.

Moreover, the language used during the presentation must be appropriate for the public.

If the public is not technical, it is necessary to use simple language without technicalities and avoid acronyms and abbreviations that are not commonly known outside of the sector.

3. Communicate the status

During the project life cycle, the stakeholders will want to know the status of the project, the way the resources are allocated, and how the status of the project could change based on different potential scenarios.

Here’s what helps in these cases:

• Include the completion status as a percentage for each project activity. By providing these details, it is possible to stimulate conversations about how initiatives depend on each other.
• Another approach is to use a color coding system to communicate the status of each activity. For example, it is possible to choose to distinguish planned, approved, developing, and completed initiatives through color schemes or tags.
• Finally, the project manager must be sure to save previous versions of the project roadmap. By creating an archive of old roadmaps, it is possible to easily trace which initiatives have been completed, delayed, rejected, or canceled.

4. Use images

People only remember a small percentage of what they hear, so visual aids are critical in order to keep the audience’s attention and make sure the key points remain.

Images should integrate and clarify what is said verbally and not present additional information.

Avoid to publish lengthy or complicated slides that could distract the public.

Make sure the writings are large and easily readable, using color combinations to show how the initiatives relate to each other and to the larger strategic goals.

A project manager has the task of dealing with a project in its entirety and one of his very important responsibilities is continuous communication with all stakeholders, at every stage of the product life cycle in order to ensure that the project has the best chances of success.

After all, no project manager can manage every detail and task of project development alone.

Any successful project is the result of a talented and knowledgeable team that works together to achieve a common strategic goal.

With this in mind, a project manager should therefore devote sufficient energy and attention to iteratively communicating with his team and stakeholders.

The project baseline is an “instant photo” of the project taken at its initial moment.

The goal of the project baseline is to see how far actual results have deviated from the initial reference plan.

In project management, it is essential to establish a baseline with clearly defined requirements, an accurate cost structure, and planning estimates, before the project execution and monitoring start.

All this must be completely defined and documented before the actual activities of the project begin.

In the baseline, the following elements of a project are included:

• Scope
• Timelines
• Costs
• Resources
• Risks
• Quality

Project Manager and project baseline

The project manager must examine the deviations from the project baseline when the work is done and throughout the project life cycle.

After the planning process is completed, this plan is agreed by all stakeholders and everyone expects the actual results to match the planned ones.

The role of the project manager is to verify during the execution of the project, if there is any variation from the baseline, in any element mentioned above.

If an event occurs that causes the project budget to be exceeded, for example, or if there is a risk that will cause the project to be delayed, corrective and preventive actions must be taken.

The project baseline can be changed, but it is not an easy process.

In fact, the baseline should allow to verify how much the project is in line with the initial planning.

If a baseline changes too frequently and there are too many deviations from it, this can be considered misleading.

Therefore, in the real world, the baseline of the project is generally modified only if an important request for modification is approved and only with the recognition of the sponsor of the project.

These changes are considered and approved through a specific process, in which the impacts on the project are assessed.

If a change is approved by the control committee, first its impacts are reported in the project plan and, next, the modification can be implemented.

Deviations from the project baseline are often due to incomplete or incorrect risk identification.

There may be a deviation from the baseline of the project, for example, if the cost of an activity or article exceeds the planned values, or if an activity takes more time than the planned duration.

Why is the project baseline important?

Establishing a baseline allows the project manager to evaluate performance for the duration of a project.

If a project is behind schedule or above budget, it is time to make changes to the baseline or add more resources.

A technique often used by project managers to measure and compare the performance of a project with its baseline, is the following calculation:

Planned Value (PV) = The estimated cost of the planned work

Actual Value (AV) = Actual cost of work done up to the current date

Effective Value (EV) = Planned Value (PV) x % of project completion

Schedule Performance Index (SPI) = EV / PV , measures progress made up to the current date with respect to the initially planned progress.

When SPI <1, less work than expected has been done.

When SPI> 1, more work than expected has been done.

Cost Performance Index (CPI) = EV / AV , measures the value of completed work compared to the planned labor cost.

Finally, baseline determination helps with the accuracy of future estimations. This allows the project manager to get a better idea of how long it will take to complete the project and at what costs.

Estimated at Completion (EAC) = (total project budget) / CPI

EAC is a forecast of how much the overall project will cost, so that it is possible to approximate the correct allocation of resources.

Maintaining an accurate record of current project estimates and actual results allows estimates to be applied to similar future projects.

How to check the status of the baseline

 The check of the progress of the project with respect to the baseline, must follow specific procedures that are established even before starting the execution of the project.

Effective control is possible when these elements are defined:

• Performance assessment standards and criteria
• Data collection system
• Frequency of monitoring, ie. when the checks must be carried out
• Frequency of reporting
• Approval process for the new programming
• Stakholders communication plan.

Practices to follow for optimal calculation and good control of the project baseline

 Let’s see the “modus operandi” to set, track and maintain an optimal project baseline.

 1. Setting of the original baseline

At the beginning of any project, it is very important to set a baseline that represents the starting point of the work. This is a useful method to document the change of various parameters of a project. The goal of setting a baseline is to avoid rewriting its parameters, but eventually just adding new ones. The experience of the project manager in this operation has a very important role.

2. Keep track of previous baselines

As the project progresses, surely the project manager will have to make changes. However, before any change, it is important to save a history of the previous baselines so that it is possible to access the previous baselines for comparisons and restore changes, if necessary.

3. Maintenance of a baseline

Once a change has been approved, it is time to update the forecast by adding the new scope, deadlines, and approved changes. Keeping an accurate record of updates and changes to the baseline allows the project manager to keep the project in line with the new requirements.

In order for the project to be successful, a structured control system becomes fundamental, as well as a good initial planning.

In addition, a project manager must be able to manage contingencies and any changes that may occur during the life cycle of a project.

The control must not only be limited to reporting the changes and rescheduling the activities planned for the future. Instead, control must be a proactive process in which project managers try to anticipate problems.

The project manager must therefore have a continuous and detailed view of the project and must communicate continuously with the project team and with stakeholders.

For this reason, a project manager can refer to different baselines and it is important that he has an adequate control system available.

A good project software like TWproject that keeps track of project timings and deliverables, can certainly give a big help in the control of the project baseline, too.

Analizing the quality and trying to improve it, is probably the main purpose behind improving business processes.

This philosophy of process improvement comes from a very important person, William Edwards Deming, a statistician, often defined as a philosopher of science.

Deming’s goal was to reapply the scientific method to business processes, which he actually did with the so-called Deming Cycle, or PDCA.

Deming’s approach is not just about improving processes, but can also be about improving an entire organization in general.

What is the Deming Cycle

The Deming cycle is a model of continuous quality improvement which consists of a logical sequence of four key phases:

• P – Plan, or planning
• D – Do, or the execution
• C – Check, ie the test and control
• A – Act, which is the action

Deming’s experience as an engineer gave him an overview of industrial processes and the real attempt to standardize operations in order to ensure large-scale operation.

By studying mathematical physics, he found himself in a position that allowed him to contribute to the growing science of statistics.

Deming’s sampling techniques, for example, are still in use in the US Census Department and the Bureau of Labor Statistics.

The key points on which Deming was working are:

• Having a system for continuous quality improvement
• Reducing errors and defects through higher levels of quality uniformity
• Understanding the meaning of quality in the context

Let’s look at the four phases of the Deming Cycle in detail.

The phases of the Deming Cycle: Planning

The first goal of the Deming Cycle is to plan ahead in order to understand what you want to achieve based on the expected results. It is a both practical and theoretical step.

Here, we are dealing with business processes, where we intend to improve something within the organization.

At this stage, you will have to test and analyze what is currently wrong with the product or process and how this can be improved.

Also here, one tries to understand what changes can be made to tackle the problems or to achieve something better.

 The phases of the Deming Cycle: Execution

Execution begins first with a small-scale test and in a limited context.

Here, the changes are implemented to test the different variables and each step will be documented.

Instead of simply deciding to make a change and suddenly reviewing all the operations, it is essential to make changes slowly and iteratively during the hypothesis test.

The use of studies that can be measured with respect to control groups, allows to better understand the data received, allowing not only to improve the output, but to understand exactly why the output has been improved by the changes made.

For Deming, this phase should be like a model of a scientific experiment.

The phases of the Deming Cycle: Test and Control

In this phase, the results and findings are studied and collected.

For Deming, the results of the planning and execution will be shown at this stage.

Do the results coincide with the forecasts? In what ways do the results differ, and why?

This phase of study should teach us to draw conclusions exactly like a scientist does after an experiment. Instead of simply asking the question “Did it work?”, for Deming you will have to ask “Why did it work?”.

The phases of the Deming Cycle: Action

This phase is the final one of the process and the first phase of the next cycle.

Here, the recommended changes have been implemented and the process is finalized. Now that we have learned that the output can be generated by executing action X, this action will be performed in each relevant situation.

This phase can include both the implementation of improvements in the company as well as the implementation of new knowledge within the organization.

Just as the results of repeated experiments create new useful knowledge, so these business results must be incorporated into new premises from which the cycle can be restarted.

The company continues to go through the cycle until the expected and actual results coincide and no further changes are necessary.

 The pros and cons of the Deming Cycle

The Deming Cycle is a simple but powerful way to solve new and recurring problems in any sector or process.

Its iterative approach allows the project manager and his team to test solutions and evaluate results in a quality improvement cycle.

The Deming Cycle establishes a commitment to continuous improvement, however small, and can improve efficiency and productivity in a controlled way, without the risk of making untested large-scale changes.

However, going through the Deming Cycle can be much slower and more time-consuming than a direct implementation.

For this reason, it may not be the appropriate approach in the case of an urgent problem or an emergency.

Moreover, this methodology requires significant “buy-in” by team members and offers fewer opportunities for radical innovation.

For Deming, the PDCA treats process experiments as hypothesis tests by asking the questions “did it work or didn’t it work?” And “Is the hypothesis true or is the alternative true?”

This is the cycle through which an hypothesis is developed, the experiments are conducted, the results are evaluated, and the hypothesis is reviewed and repeated.

In simple words, Deming’s approach, seems to want to remove our blinders.

We need to stop looking for only minor changes to eliminate process inefficiencies and instead start thinking big about how processes can be improved in order to increase quality.

For Deming, the same levels of scientific rigor that one would expect from the best researchers should be used in business. Let’s try then.

The analysis of the costs (and benefits) of a project, among all the possible techniques, is perhaps the most important for a Project Manager. Let’s try to see why.

When managing a project, it is necessary to make many important decisions.

Because of the high stakes involved, good project managers do not simply make decisions based on instinct. They prefer to minimize risk and act only when there is more certainty than uncertainty.

But how is this possible in a world with a myriad of variables and a constantly changing economy?

The answer is:

Project managers can then use this data to evaluate their decisions with a process called cost-benefit analysis of a project.

Smart use of cost-benefit analysis will help minimize risks and maximize profits for both the project and the organization in general.

What is a project cost analysis?

The cost analysis in project management was designed to assess the cost compared to the benefits in the project proposal.

This process begins with a list, which includes all the expenses of the project together with the benefits that will derive from it once the project will be successfully completed.

From this, it is possible to calculate the return on investment (ROI), the internal rate of return (IRR), the net present value (NPV) and the amortization period.

The difference between the cost and the benefits will determine whether the action is worth it or not.

In most cases, if the cost is 50% of the benefits and the amortization period is not more than one year, it is worth taking action.

A cost-benefit analysis is a process that allows organizations to analyze decisions, systems, or processes or determine a value for intangible assets.

The model is built by identifying the benefits of an action and the costs associated with it and subtracting the costs from the benefits.

Once completed, a cost-benefit analysis will produce concrete results that can be used to develop reasonable conclusions about the feasibility and / or opportunity that represents a specific decision or situation.

The purpose of the cost-benefit analysis

The purpose of the cost-benefit analysis is to have a systemic approach in order to understand the advantages and disadvantages of various solutions through a project, including transactions, activities, business requirements, and investments.

Cost-benefit analysis offers options and is the best approach to achieve a goal while saving on investment.

There are two main purposes for using a cost-benefit analysis for a project:

• To determine if the project is valid, justifiable and feasible, verifying if its benefits exceed the costs.
• It offers a reference base for comparing projects by determining which project benefits are greater than its costs.

The cost-benefit analysis process: 10 key steps

The process of cost-benefit analysis of a project is composed of 10 steps through which the convenience of the project can be established. Let’s see what they are:

• What are the goals of the project? Before you can decide if a project is worth, you need to have a clear and precise idea of ​​what it must accomplish.
• What are the alternatives? Before you can know if the project is the right one, you need to compare it with other projects and see which is the best one to follow.
• Who are the interested parties? List all project stakeholders.
• What measures will you use? You need to decide the metrics you will use to measure all costs and benefits.
• What is the outcome of costs and benefits? You need to know what the costs and benefits of the project are and map them over a significant period of time.
• What is the common currency? Here, we take all the costs and benefits and convert them into the same currency in order to make a real comparison.
• What discount rate will be applied? This will express the amount of interest as a percentage of the balance at the end of a certain period.
• How is the net present value of the project options? This is a measure of profit that is calculated by subtracting the current values ​​of the cash outflows from the current values ​​of incoming cash flows over a given period of time.
• Sensitivity analysis? This is a study of how the uncertainty of the output can be divided into different sources of uncertainty in its inputs.
• Final decision? The final step, after collecting all these data, is to make the most recommended choice according to the analysis.

Are there limitations to cost-benefit analysis?

Of course, there is always a risk inherent in any business, and the risk and uncertainty must be considered when evaluating the cost-benefit analysis of a project.

It is possible to calculate this with the probability theory. Uncertainty is different from risk, but can be assessed using a sensitivity analysis in order to illustrate how the results respond to parameter changes.

Overall the use of cost-benefit analysis is a crucial step in determining whether it is worth pursuing any project.

For projects involving small to medium capital expenditures and from short to intermediate (in terms of completion time), a thorough cost-benefit analysis may be sufficient to make a rational and well-informed decision.

For large projects with a long-term time horizon, cost-benefit analysis typically fails to justify important financial concerns such as inflation, interest rates, variable cash flows, and the present value of money.

Alternative methods of analyzing initial capital, including the net present value or internal rate of return, are more appropriate for these situations.

Unless you are extremely lucky, it will never be possible to get all the information needed to complete a cost-benefit analysis.

There will in fact always be gaps in information.

Cost analysis: the hypothesis method

One way to try to overcome these shortcomings is to use hypotheses about the missing information.

However, for the inexperienced project manager, hypothesis creation is one of the most terrifying aspects of cost-benefit analysis.

Here is an example: a cost-benefit analysis is conducted for a real estate investment project. There may be a case of not knowing what the maintenance costs will be in the future. What is known, however, are the types of maintenance fees that have been paid for similar properties in the past. You can then use some of those numbers to make an assumption.

In any case, care must be taken when using hypotheses. Factors do not always follow trends and even the smallest change in the hypothesis can produce totally different results.

In conclusion, cost-benefit analysis is a data-driven process and very often requires a sufficiently robust project management software to handle and distribute information. If you haven’t tried TwProject yet, do it now! You will discover how simple it is to organize information and complete a cost-benefit analysis.

One of the critical success factors for any project is the presence and participation of an effective project sponsor.

Often the project sponsor  is someone holding a senior position within the organization and is responsible for initiating and approving the project and supporting the project manager during execution.

The project sponsor identifies the business needs of the project, helps the project manager keep the work on track, and ensures that the organization obtains benefits from the the final results.

The key attributes of a project sponsor

The project sponsor must have a strong appreciation of the organization’s strategic goals, must understand the role as a sponsor and exert influence and it would be an advantage, if it had direct experience in project management.

Some key attributes for a project sponsor are:

• Strategic and innovative mentality
• Emotional intelligence
• Excellent communication skills, including negotiation and conflict management
• Strong decision making processes

Roles and responsibilities of project sponsors

Unlike the project manager, who oversees the team and the daily execution of key tasks, the sponsor helps create the right environment to support the project manager.

This support can take a variety of forms such as:

• Aligning the project with the corporate strategy.
• Participating in project planning.
• Ensuring that the proposed solution solves the agreed problem and the requirements.
• Assistance in resource management.
• Ensuring that the project is started and executed in accordance with established standards and best practices.
• Monitoring project progress and helping in taking corrective action if necessary.
• Cultivating buy-in and stakeholder engagement.
• Providing timely and informed information on key project decisions.
• Solving problems and conflicts outside the scope of project manager authority.
• Evaluating the success of the project at its end.
• Celebrating and rewarding success.
• Project manager mentoring when and as needed.

With so many responsibilities and an active role, the project sponsor is one of the real owners of the project.

No wonder then, if a sponsor can make or break a project.

Challenges in working with a project sponsor

Developing a beneficial relationship with the project sponsor is complicated for different reasons.

Typically, project sponsors are assigned to a project before work begins, which means that project managers rarely have the opportunity to choose it.

Moreover, an individual who has no project management experience but who is going to fill the role due to – for example – his seniority within the organization could take the project sponsor role.

Project sponsors are people who are also generally involved in other activities, outside the project, and may not have sufficient time to provide useful advice and support in case of difficulty.

Project managers who work with inefficient or useless sponsors have two choices: go ahead in the best way or “manage” and help the project sponsor play their role.

 Four key steps to work with the project sponsor

Here are the four steps that can help you work with the project sponsor:

1. Set expectations

Before starting a new project, it is essential to meet the project sponsor to decide how to collaborate. This step is particularly important, if the project manager has never worked with the sponsor or if the sponsor is taking on this role for the first time.

It is good practice to hold this meeting even if the two parties have already worked together previously and even if the sponsor is an expert. Each project is indeed different and requires alignment from the beginning.

Use the meeting to establish roles and responsibilities, identify the resources required and establish a communication plan, review and refine the project plan, identifying the main milestones.

2. Preliminary meeting

Ask the project sponsor to participate in the preliminary meeting with the team in order to share the vision of the project and the desired result.

In this way, also the project team will have clearer ideas about all project stakeholders.

3. Communication

 As the project progresses, keep the sponsor busy and informed. The communication channels include status meetings, automated reports and dashboards using, for example, a project management software.

It is also important to examine the communication style and preferences of the sponsor and adapt them as needed.

4. Keep the sponsor involved (h3)

 In addition to updates and status reports, the project manager must periodically ask the sponsor for information and directions. It is important to look for their input when it comes to problems and difficulties or when alternative approaches need to be compared.

A valid project sponsor, in fact, should care for and support the project manager and has a vast knowledge to share. Involving a project sponsor helps building a rewarding relationship for all.

The relationship with the sponsor and the end of project document

At the end of a project, a project manager must always proceed to an analysis concerning the relationship with the project sponsor.

This can help improve the commitment of the sponsors and the management of any future projects.

• What worked and what did not?
• What challenges have been encountered in the relationship with the project sponsor?
• Are there specific tools or processes when working with sponsors within the organization?

These and other questions serve to collect experiences. They are the key to establishing best practices in order to have an efficient relationship between project managers and project sponsors.

A project management software is a versatile way to simplify the process of managing any project.

A project management software helps to unify the work process on one or more projects. This avoids forcing teams to work on different applications and platforms.

Thus, communication tools, file sharing, activity and deadline monitoring, and reporting are all inserted into a single software application.

A project management software works like a real-time workspace. It helps keep the eye focused on the big picture, effectively managing the details day by day.

When do you need project management software?

It is important to point out that a project management software is designed for completing projects that require time and teamwork.

An organization needs a project management software, when it is necessary for different individuals and business units to coordinate, both internally as well as externally, to complete certain tasks.

Establishing precisely when it is the exact time to switch to the use of a project management software is not easy. However, there are unmistakable signs that make clear that perhaps this time has come. The telltale signs that an organization needs a project management software include:

• Delay of projects due to over-correspondence via e-mail and work was lost in the mailboxes of team members.
• Confusion over too elaborate and not user-friendly worksheets.
• Lost of some deadlines due to lack of accountability and transparency in the process.
• Poor communication between team members and the project manager due to failure to report the status of the project or individual activities.
• Overlapping or redundant jobs due to the confusion that reigns over the specific role of each team member.
• Not clear or lost timelines due to poor planning or poor communication.

Therefore, choosing a project management software solution can simplify the entire process. It can allow the team to offer higher quality work in a shorter period of time.

Effective softwares allow the project manager to save and track multiple projects simultaneously.

In essence, the workload can be saved on a single platform. On this platform, each team member has access to all the information needed to do his job.

How does a project management software look like?

Generally, as starting base, we also find a dashboard. This control panel provides access to all major software features.

From the dashboard, users can create new projects and manage and organize old ones.

In many project management platforms, the dashboard is also the site of an overview of active and completed projects, which users can access at any time.

Project management softwares clearly have different capabilities, and it is important to assess what the business needs are before choosing one solution.

For project managers, complete control over project management is essential.

This way, they can reassign the work and reprogram it, if a team member is overloaded while others are not, managing resources more effectively.

With detailed summaries and reports, project managers can also more easily keep pace with new developments.

Any complex project has many moving parts and it is therefore important that the manager is informed of all the details.

Choose the right project management software

Most quality project management softwares offer the features described above, but of course there are other aspects that vary from platform to platform.

This is why it is important to select a project management software that allows to ensure the success of an organization.

A large company, for example, will have different needs than a small startup with a small team.

So, examining each software and asking the right questions is the key.

Implementation and ease of use should be two key factors essential for the decision.

5 fundamental aspects for the choice of a project management software

Here are the 5 fundamental aspects in order to choose the right project management software:

1. Respond to the whys

The process must begin with a transparent and honest assessment of why the organization needs a project management software. The project manager can start by tracing the needs and identifying current problems. This can be followed by an analysis of the existing processes to highlight the negative points and, consequently, to look for a software that allows to overcome them.

 2. Looking beyond the “big names”

Clearly, there are project management softwares most famous than others, but are we really sure that these represent the right choice for any organization? For a given company, in fact, a less well-known project management platform could be the ideal solution. So, it becomes important to search online to see what types of software are on the market, collect different opinions, ask the team members what they used in their previous organizations, etc. In short, do some research and compare the various features.

3. Identify implementation barriers

 Once the project manager has chosen a potential project management software, it is important to consider the obstacles or implementation barriers that the organization might encounter. These implementation barriers could be anything: From team resistance to longer than expected training sessions, from difficult data migration to insufficient purchasing budget. The idea is therefore to identify all the factors that could cause a block to the implementation of the software, to verify if these barriers can be eliminated and to find a solution.

 4. Do a test drive

Almost all the available softwares are supplied with a free trial (if you want to try TWproject for free you can click here). It is therefore important to make the most of this opportunity, using realistic project scenarios to scroll through the list of software features. The PM will not have to act alone, but choose a team just as it would in the case of a real project. The team chosen for the test drive will thus have the opportunity to explore the new software and give the most accurate feedback possible. It is important to keep the communication open in order to discuss any problem straight away.

5. Draw up a detailed implementation plan

A final factor to consider before officially choosing the project management tool, is to plan the implementation and make sure it will be as smooth as possible. Typical elements to be considered at this stage include time frames for implementation, adequate training for the various stakeholders, and possible data migration activities. It is also necessary to evaluate the level of support that can be obtained from the supplier of the software as well as the long-term technical support.

Conclusions

The choice of a project management software therefore requires much more than a decision based only on a couple of “big” names, on a superficial analysis of the functionalities, and on the feedback of a few people.

Choosing a new project management tool can be a long and complicated process, but one that is worth it in the long run.

The right choice will be an advantage for the organization in general, for customers, as well as for the project team.

When dealing with a project, risks are always on the agenda. Even the most carefully planned project can encounter problems and unexpected events.

Team members may fall ill or resign, other resources may be unavailable or insufficient, the budget may fail to cover an expense, etc.

Does this mean that we must give up when faced with unexpected problems? Absolutely not!

This is where planning and risk response strategies come into play. We need to identify potential problems that could negatively affect the project, analyze the likelihood of them occurring, take action in order to prevent the risks that can be eliminated and minimize those that are impossible to avoid.

 Definition of project risk

A risk is any uncertain event or condition that could affect the project.

However, not all risks are negative. Some events, such as finding an easier process to perform a certain activity for example, or the decrease of prices for certain materials, can also help the project.

This situation is called “opportunity”, but is managed just like a risk.

There are no absolute guarantees on any project, even the simplest activity can face unexpected problems.

A risk can be an event or a condition, in any case, it is something that can happen and if it does, it will force to change the way the project manager and the team work on the project.

When planning a project, the risks are still uncertain and have not yet happened, but it is likely that one or more identified risks will actually happen, and this is where a project manager needs to be able to deal with them.

The risk management plan tells precisely how the risks of the project will be managed if these occur.

It is important to draw up guidelines – through a priority scale, for example – that help to understand how large the potential impact of a risk on the project can be.

6 key steps in the risk management process

The risk management process can make the unmanageable manageable, and can allow the project manager to operate on what seems to be a disadvantage and turn it into an advantage. Let’s see how:

1. Risk identification

It is not possible to solve a risk if you do not know it. There are many ways to identify risk.

One way is through brainstorming, a methodology which allows a group to examine a problem.

Another method is that of individual interviews. It consists of finding people with relevant experience, so that it is possible to gather information that will help the project manager identify the risk and find a possible solution.

Imagining the current project and thinking about the many factors that can go wrong is another technique. What can you do if a key team member is sick? What can you do if the material does not arrive within the defined deadline? Etc.

An aid in this phase is also to read the reports of similar past projects, verifying the presence of any problems encountered during the path, and see how these have been solved.

2. Risk analysis

The next step is to determine the likelihood that each of these risks will occur. This information should also be included in the risk register.

When evaluating the risks of a project, it is possible to proactively address the situation. For example, potential discussions can be avoided, regulatory problems can be solved, new legislation must be known, etc.

Analyzing the risks is certainly difficult. There is never a limit to the information that can be collected in this sense.

Moreover, risks must be analyzed based on qualitative and quantitative analyzes. This means, that you determine the risk factor based on how it will potentially affect the project through a variety of metrics.

3. Risk prioritization

Not all risks have the same level of severity. It is therefore necessary to assess each risk in order to know which resources will be gathered to resolve it, when and if it occurs.

Some risks will be more acceptable, others may even risk to completely stop the project, making the situation quite serious.

Having a long list of risks can be daunting, but the project manager can manage them simply by classifying the risks as high, medium or low.

With this perspective, the project manager can then start planning how and when these risks will be addressed.

Some risks require immediate attention; these are the risks that can derail the project.

Other risks are important, they probably won’t threaten the success of the project, but will delay it.

Then, there are those risks that have little or no impact on the program and the overall project budget.

Some of these low priority risks could be important, but not enough to be urgently addressed. Indeed, they could be somehow ignored and also time could delete them and improve the situation.

4. Assign an owner to the risk

All the hard work of identifying and assessing risks is useless unless the project manager assigns someone to oversee the risk.

Who is the person responsible for that risk that, if this were to happen, would take charge of its resolution?

This decision, in general, is up to the project manager who knows the level of experience and training of each team member and is therefore able to assess the most suitable person to face a particular risk.

It is certainly important to identify the risks, but if these are not managed by a person in charge, the work will have been completely useless and the project will not be adequately protected.

5. Respond to the risk

Now comes the moment, when all that has been planned must be put into practice.

For each identified risk, based on priority, a mitigation plan or strategy is created.

The project manager should deal with the risk owner in order to decide together which strategy to implement to resolve the risk.

6. Risk monitoring

Obviously, every strategy to respond to the risk is useless if it is not monitored in its success – or failure.

The risk owner is also responsible for monitoring the progress towards resolution.

But also the project manager needs to stay updated in order to get an accurate picture of the overall progress and to identify and monitor potential new risks that may arise from the new situation.

It is better to ensure that dedicated communication channels for risk management are organized, so that important elements and information are not lost.

It is possible to have face-to-face meetings, but some updates could be better provided via e-mail or text or through a project management software tool.

Risk mitigation

After the risk has been identified and assessed, the project team develops a risk mitigation plan, ie a plan to reduce the impact of an unexpected event.

Here are the four ways to manage or mitigate a risk:

• Risk avoidance
• Risk acceptance and sharing
• Risk mitigation
• Risk transfer

Each of these mitigation techniques can be an effective tool to reduce individual risks and the risk profile of the project.

Let’s see these four techniques in detail.

1. Risk avoidance

This technique usually involves developing an alternative strategy that is more likely to succeed, but is usually linked to a higher cost.

A very common risk elimination technique is to use proven and existing technologies rather than adopting new technologies, although they could lead to better performance or lower costs.

A project team can choose a supplier with a proven track record instead of a new supplier that offers significant price incentives; this, in order to avoid the risk of working with a new supplier that is not known whether it is reliable or not.

Eliminating a risk is definitely the best technique you can use. If the project manager can avoid it, surely he will not have negative impacts derived from it on the project.

2. Risk acceptance and sharing

This technique involves accepting the risk and collaborating with others in order to share responsibility for risky activities.

Many organizations working on international projects will reduce the political, legal, and employment risks associated with international projects by developing a joint venture with a company based in a particular country, for example.

Partnering with another company to share the risk associated with a part of the project is advantageous when the other company has experience that the project team does not have. If a risk event occurs, the partner company absorbs all or part of the negative impact of the event.

3. Risk mitigation

Risk mitigation represents an investment in order to reduce the risk on a project.

On international projects, for example, companies will often buy a guaranteed exchange rate in order to reduce the risk associated with exchange rate fluctuations.

A project manager can hire an expert to review technical plans or cost estimates on a project in order to increase confidence in that plan.

Assigning high-risk management activities to highly qualified project personnel is another risk reduction method.

Experts who run a high-risk business can often anticipate problems and find solution.

4. Risk transfer

Risk transfer is a risk reduction method that shifts risk from the project to another party.

A classic example of risk transfer is the purchase of an insurance. The risk is transferred from the project to the insurance company.

Purchasing an insurance is usually in areas beyond the control of the project team. Weather, political unrest, and strikes are examples of events that can have a significant impact on the project and that are beyond the control of the project team.

Simply put, it is simply a matter of paying someone else to accept the risk.

Risk management may seem superfluous at the beginning of the project. When a project manager is starting a new project, it is indeed difficult to think about things that could go wrong, especially if he is caught up in the initial enthusiasm.

It is essential to remember, however, that the development of a management plan will – most likely – be useful later during the development of the project.

This is why risk management must be considered an absolute priority from the start.

Why should we talk about an enterprise project management software and not simply about a project management software? It is very simple… they are not the same thing!

We will see later the features of an EPM software, but for the moment let’s just say that there are many softwares that allow to follow a project, but only some of them are able to follow multiple projects even of different sizes.

In general, large organizations run multiple complex projects simultaneously.

Although each project is not necessarily connected with others, they are all in a certain way correlated because they all have an impact on the organization as a whole and on its general goals.

This is where the practice of managing business projects comes into play, ie. Enterprise Project Management or EPM, which refers to project management on a corporate scale.

This generally involves implementing various strategies and processes aimed at simplifying and improving the effectiveness of project management on such a large scale.

What is Enterprise Project Management?

To understand what EPM means and why it is important, it is better to take a step back and consider the definition of “project management” itself.

The Project Management Institute defines project management as a temporary effort undertaken to create a unique product, service or result. And this is clear.

However, an organization involved in dozens of temporary initiatives, each focused on a specific goal with a specific deadline, needs a way to organize these efforts. It must make sure that each individual project brings the organization closest to its long-term goals.

This is where Enterprise Project Management comes into play.

EPM is considered as a specialized branch of traditional project management that focuses on the overall business goals of an organization, rather than on specific short-term goals.

By grouping projects and giving a broader view of activities, a company can avoid internal conflicts and unnecessary efforts.

Enterprise Project Management is a comprehensive approach to project management that takes into account direct and indirect influences on the progress of each project as a whole.

Consequently, it includes analyzing the risks, resizing of project processes, resource monitoring, continuous reporting and cost analysis with respect to benefits, and the use of tools and software to manage all these aspects.

How does Enterprise Project Management differ from traditional project management?

 Unlike traditional project management, the EPM is based on combining all parts of the project management into a single resource, often thanks to the use of a specific project management software.

These features help reduce the barriers between the individual project and the business vision in general, increasing efficiency and productivity.

Traditional project management practices focus on seeing a specific project from beginning to end, with a defined and measurable goal.

Enterprise Project Management focuses instead on the organization. It gives priority to its business goals and manages projects in order to ensure that they meet these general organizational goals.

The final goal is not necessarily a successfully completed project, but the project itself, which helps creating value in the organization.

Here are the advantages of EPM:

• High quality output
• Improved productivity
• Reduced impact of skills shortages
• Reduction of project risks
• Greater reliability of delivery

What makes Enterprise Project Management effective?

 The adoption of EPM can help an organization adopt a more strategic approach to budgeting, operations, and resource allocations.

First of all, however, a company must ensure that it has the following key elements:

• High level support for project management initiatives: As with any large-scale initiative, the management of company projects will be effective only if the leaders of an organization are committed to supporting the idea and are actively interested in its progress .
• Qualified project managers: In many cases, the most experienced project managers of an organization are able to deal with program management or project portfolio management tasks.
• Project management software: No person or team can keep track of dozens of related projects without strong technological support. Today’s best project management solutions offer a range of tools to help project managers keep track of the times, budgets and resources of multiple projects simultaneously.

The essential features of an EPM software

The Enterprise Project Management software offers organizations the necessary functionalities to competently manage both smaller and more complex projects at the company level.

This tool allows you to look at projects from a strategic point of view and offers managers the opportunity to prioritize projects and allocate resources accordingly.

EPM software is generally rich in features. In addition to the typical ones like advanced security and mobile access, here are the other essential features:

• Project Portfolio Management (PPM): this is the essence of EPM. This function organizes company projects and presents them in an easy way to consult, manage and monitor.
• User Dashboards: a corporate project management software should allow to provide each user with a customized and customizable dashboard in order to analyze important information about the project and easily access vital information.
• File sharing: a good EPM software offers a sophisticated level of file sharing. In addition to simple file sharing, in fact, the functionality must include audit trails, content versioning and authorization settings to ensure that only the right people have access to the data they need.
• Internal communications: instant messaging or private messaging is a typical feature of EPM software that can help reduce the use of e-mail or telephone. Some software (not all) also allow video conferencing.
• Calendar: valid EPM software should provide a calendar for each project as well as a central one that combines all the deadlines and milestones of the projects. Some EPM softwares even allow you to create custom calendars for each team member.
• Gantt charts: although not all project managers use Gantt charts, many do. These are horizontal bar graphs that illustrate the program of a given project.
• Integrations: last but certainly not least, a good EPM software should be able to connect with other softwares used in the organization, like Salesforce, Dropbox, and Microsoft Office.

A project management software with these features becomes fundamental for a successful EPM and for the achievement of business goals.