Topic 5 Anticipate Risks, Costs and Deadlines

The importance attributed to costs, deadlines and risk management can vary greatly depending on the nature of the project and the context in which it is to be carried out. The forecasting of costs, deadlines and risks is mainly carried out at the beginning of the project. However, forecasting activities continue to take place throughout the project’s execution, with the aim of making adjustments to the trajectory when necessary.

Assessing costs

A project and a budget are interrelated. Thus, it is important to establish a provisional budget determined by adding up all the incomes (such as return on investment of the project or public grants) and costs incurred in carrying out the project, both material and human costs. See some examples:

  • The hourly cost of human resources
  • External providers
  • The creation and hosting of a website
  • Travel and mission expenses, etc.

There are two main causes of budget overruns: poor cost management, or an initial estimate that could not be kept. It is, therefore, essential to constantly update the actual budget throughout the life of the project to compare it to the provisional budget, as to have clear visibility of the financial health of the budget.

Identifying risks

There are no zero risks in project management, therefore, to face the related  risks, you can apply the following tips:

  • List all the risks that may jeopardize the progress of the project. An important tool at this stage is the SWOT analysis* (Strengths, Weaknesses, Opportunities, Threats)
  • Set an advanced due date for critical tasks or milestones
  • Envisage a margin in the project schedule for risk management and problem resolution to diminish potential delays

Contingency Plan

A contingency plan is the definition of action steps in case an identified risk event occurs. Within the framework of project management, a contingency plan is a basic component of the project risk management plan. A contingency plan is essentially a “Plan B.” It’s a backup plan in place for when things go differently than expected.

Check out the contingency response strategies!