Project Management Central

Please login or join to subscribe to this thread

Topics: Change Management, Risk Management
Risk Management Vs Change Management
Network:118



Good Morning to All,

I have a question.... may be a silly question.

Assume that there is a risk which was identified at the start. The risk response (required actions) were also planned if the risk happen and accordingly contingency was there in the project budget and scope. Now let's say during project executing, the risk happen and action plan is implemented as planned in the risk response. This action plan require additional cost and time....... Do we need to follow change control process for this or we can directly implement it without approval utilizing existing contingency?

Any useful literature about this question shall be highly appreciated.

Best Regards,

IH
Sort By:
Network:329



Change control is usually a plan to minimize a request that impacts the scope of the project. If your risk management plan has steps to mitigate a risk, without transferring that risk, you can implement it without using the change control plan.

BUT one of the only ways you'd have to use your change control process is if that change poses a risk to the project. You'd have to update your risk management plan and come up with a solution to minimize that risk.

You can refer to the PMBOK chapter 4 regarding change control, and chapter 11 for risk management.
Network:1371



If you are talking about contingency reserve then you can use it without any type of change request. That is per definition of contingency reserve. In the real life I have experienced situations where I use it as per definition and others where no change request was needed but I have to have some kind of approval.
Network:299



Imran -

It really depends on the nature of the response to the realized risk. As Sergio has indicated if you had got approval on contingency reserves to cover the impact of this or other identified risks being realized, then financial impacts would already be absorbed within those. However, if the other impacts of the issue were to schedule, quality, scope or any other constraints, depending on your organization's standards a change request might need to be prepared and approved to formally accept a change to your baselines. In some companies, such impacts would be considered variances which would remain as such till the very end of the project.

Kiron
Network:675



When you have an established risk potential, then the logical thing to do is account for that potential in the contingency, leaving you with either an excess (it didn't happen) or an expense (it did happen and you worked the issue). No change management plan change needed. it is already in the overall plan.
Network:118



I was referring to below text from PMI’s Practice standard. See bullet point number 1

All the approved, unconditional actions arising from risk response planning should be integrated into the project management plan in order to ensure that they are carried out as part of normal project implementation. The corresponding organizational and project management rules should also be invoked, including the following:
• Project change management and confi guration control;
• Project planning, budgeting, and scheduling;
• Resource management; and
• Project communication planning.

CHAPTER 8 ? PLAN RISK RESPONSES
Practice Standard for Project Risk Management
Network:241



if your risk was planned and already mentioned in the contingency plan, then no change is required, you are going as planned , but if there is any change to the planned cost for this risk or you change to response action then you have to create a change request.
Network:158



I've seen this work several ways through different organizations. I'll break down the different ways I've seen this done:
1. The risk wasn't identified, so it immediately became a change order (doesn't sound like this case).
2. The risk was identified in the Risk Management Plan, but no plans were made to manage the risk. End result: Change Order
3. The risk was identified, a plan was created, but there were no allocations made during Risk Identification/Planning. The company decided it would create a change order in advance of the risk trigger and approve the change order only if the risk actually occurred.
4. The risk was identified, a plan created, and the expected cost/schedule impacts were added to a contingency for the project (either per the tasks, or more common, a bucket contingency for the PM to apply to the overall project), sometimes by a change order, or via the gate/rolling wave/planning process. The PM could then use the contingency to address the Risk without a change order after the risk occurred.

I hope you find this helpful. A lot of this will depend on company culture, risk tolerance, and project oversite. Some companies want a lot more visibility/control of projects and mandate change management in order to have that visibility, regardless of what the PMBOK or PMI says. If you need more detail, let me know.
Network:1008



After we plan our project management related documentation and start the execution stage we need to keep in mind that environment may change. Besides, while planning the contingency reserves, the cases are prescribed and the project manager knows for what "known unknowns" these resources can be utilized.
So, I think, the contingency reserves can be used if the change was considered in this context, and in case it is new to the project and may have relation to other phases, the risk management plan, lessons learned documents need to be updated.

Please login or join to reply

Content ID:
ADVERTISEMENTS

"When a stupid man is doing something he is ashamed of, he always declares that it is his duty."

- George Bernard Shaw

ADVERTISEMENT

Sponsors