Risk Management – Handling Milestones

It is part of risk planning that each identified risk is allocated to project milestones. Very often a stone is attached to the payment, so the exact value of the risk may be. All risks will have an impact for a certain period of time. For example, 1st milestone "Software X, Edition for Customer".

If this is a risk effect, we will not receive Milestone 1 payments from the Customer. This payment is intended to cover staff, materials, subcontracting payments and various other project costs, including financial costs. The cost of these risks, or any other milestone related costs, is essentially the cost of collecting the sum of money from the moment it is actually received.

In order to address this risk, regular project meetings are organized, some of which cover the development of identified risks. The risk manager reports on each risk by assessing whether it is likely to occur. If the likelihood of risk assumption increases, action is taken to enforce the security measures already established.

In this example, mitigation measures may be "Introducing Temporary Acceptance Tests to Identify Problems early".

Suppose it was necessary to introduce this mitigation measure and temporary acceptance tests show that the software is far from ready for delivery. This means that downsizing or contingency plans should be carried out.

This is a very desirable situation, but such plans may be: "We need to introduce additional software development efforts to identify and resolve errors," or assuming that we do not have any staff who can add extra resources to the problem. "Engineers Overtime to Identify and Solve Errors".

These emergencies themselves naturally cost you but you have to consider the possibility of delaying your mileage and even worse if you have not met the milestone schedule. If a stone is late, it is very difficult to catch up and many rescheduling is needed to continue to match the final delivery date. If it does not meet the milestones, it is generally unhelpful for the Customer and it is unlikely that the company would make a good reputation.

The upside, if the risk does not affect, and the landmark you're in, this risk can be omitted and forgotten, so you can concentrate on time and space.

Next in this series we look at dealing with risks related to suppliers or subcontractors.

Source by sbobet

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