"PR O JE CT MA N AGE MEN T I N ACTI ON Risk Management on a Satellite Development ProjectIntroductionProactive risk management is definitely one of the key advantages in implementing andusing standardized project management practices today. We always have the balancingact of managing the triple constraint of cost, time, and scope, and on top of that, we needto effectively assure project quality and that we have enough resources to do the job. Inthis age, we are continuously asked to optimize our performance and "be moreefficient"; often, this is because we simply have too much work and not enough peopleto do it. So, in practice, we work with risks every day —from the risk of not spendingenough time planning to the risk of not having enough supplies, or even the risk of notrunning a thorough enough risk management program.Some time ago, I worked on a satellite development project that involved a lot ofresearch technologies. There were many unknowns, with variables in the manufactureof components, integration of systems, working with subcontractors, tests, and otherareas that made the project full of risk. Additionally, we were on a tight timeline forproduction and had only limited budget reserves available to handle cost overruns.Thus, we needed a practical way to manage and deal with the risks of the project. Bysystematically working with the risks of the project, we were better able to prepareresponses to the risks if and when they occurred.PlanningFor our project, it was essential to have an integrated system and mechanism for riskmanagement. Thus, at the outset of the project, during the planning phase, we developedour risk management plan and established with the team the process for dealing with not only risk but also any subsequent changes that could occur with the project as a result ofthe risk. This was done during a day-long clinic where we exclusively worked ondeveloping this risk plan, as we knew our project was high risk and we wanted to makesure we could work with the plan. We developed criteria for evaluating probabilities ofoccurrence and impact for the risk and also for prioritizing risks. Furthermore, weresearched and compared our methods to industry standards for risk management suchas those fromExecutionOnce we had a solid approach for risk management in this project, we then wentforward with the processes of identifying our project risks, analyzing the risks,developing potential responses for the risks, and deciding upon next steps for the risks.Our approach to all this was an integrated one, using a risk management databasetool we developed as its cornerstone. This tool allowed for anyone in the project team toview the risks, enter new risks, and provide input for potential risk responses. Anexample of a similar type of tool is shown in Exhibit 10.14, where each risk is loggedas a record in the database. The database allowed the team to have a single repositoryfor recording and logging all the risks for the project, which was critically importantbecause the risks in satellite development were constantly changing.Every other month, the project team would hold a risk management review, in whicheach risk would be discussed and any decisions on actions would be made. Typically,we would meet and review the risks logged in the database in this group setting, and therisk's assigned owner would talk about the background of the risk, things that occurredsince the risk was first logged (or since the last risk review), and what he or she felt thenext steps needed to be. Project team members brought up other areas of the project that might have been impacted by the risk or new risks that resulted from the occurrenceof the risk, or provided potential ideas for deferring, transferring, mitigating, or acceptingthe risk. The team also determined whether the risk decision needed to be elevated.Another reason we held risk management reviews was to make sure that the team wasup to date with the overall project's risks. Based on the criteria we defined in developingthe risk management plan, the database tool provided us a prioritized report of all theproject's risks. That risk report was used by the group to make decisions about theproject and look at mitigation strategies for the project as a whole. The riskmanagement review provided us with an avenue through which we could worktogether to resolve the high-priority risks of the project. Often, the high-priority riskswere related to overall project drivers, and it was essential to be as proactive as possiblein managing. "