What are the most common types of program risks?
Program risks are uncertain events or conditions that can affect the delivery, quality, or benefits of a program. A program is a group of related projects, subprograms, and operations that are managed in a coordinated way to achieve a strategic objective. Program management is the skill of applying knowledge, tools, and techniques to align program activities with the program vision and goals. In this article, we will discuss the most common types of program risks and how to identify, assess, and mitigate them.
Strategic risks are the risks that can impact the alignment of the program with the organization's vision, mission, and objectives. They can arise from changes in the external environment, such as market shifts, competitor actions, regulatory updates, or stakeholder expectations. They can also result from internal factors, such as poor governance, unclear roles and responsibilities, or inadequate resources. To manage strategic risks, program managers need to monitor the external and internal factors that can affect the program's value proposition, communicate effectively with the senior leadership and key stakeholders, and adjust the program strategy and scope as needed.
-
developer normally runs into such issues when requirements were not clear to them, this will lead to duplication of efforts and also overall cost increase
-
In program management, the top risks include scope creep, where project objectives expand beyond initial plans, impacting timelines and budgets. Resource shortages, including lack of personnel and funding, can delay progress and affect quality. Stakeholder misalignment, where conflicting interests or lack of communication among key parties, jeopardizes program objectives. Schedule slippage occurs when tasks take longer than planned, potentially causing missed deadlines and increased costs. Lastly, quality issues, stemming from inadequate processes or oversight, can lead to rework and dissatisfaction. Addressing these risks early through rigorous planning, stakeholder engagement, and continuous monitoring is crucial for program success.
-
The most common types of program risks that should be taken into consideration are as follow: Scope creep: Unexpected changes or additions to the program which disrupt budgets and timelines. Resource crunch: Lack of skilled staff, equipment, or funding which can stall progress. Cost overruns: Unrealistic budgets or unforeseen expenses which can impact finances. Conflicts: Disagreements or unmet expectations from sponsors, team, or users which can offset plans. Technical glitches: Software issues, hardware failures, or compatibility problems which usually lead to wasting time and cause all kind of setbacks. Worth noting that early identification and proactive management are key to mitigating these risks!
-
If there is no risk no learning curve in any program. But somehow you will have many things look at : -Poor stakeholder communication -Resource Challanges , Skillset challenges -Scope creep, Schedule and milestone delivery gap -Planned and Unplanned budgets -Leverage Legacy to eco-system challenges -Change management -Legal , Compliance and Regulatory issue -Environmental factors This should be collaborative approach within team to prevent risk, identification and doing analysis and mitigating strategy is very important to make program's on track.
-
External risks refer to factors beyond a program's influence, like shifts in political, economic, social, or technological conditions. On the other hand, internal risks are within the program's control, such as insufficient planning, resource shortages, expertise gaps, or communication failures. Competitive risks stem from rivals, including new market entrants or existing players providing similar offerings. Financial risks entail challenges related to funding, like budget reductions or unforeseen costs. Lastly, reputational risks involve threats to the program's image and public standing.
Operational risks are the risks that can affect the execution of the program activities, such as planning, scheduling, budgeting, quality assurance, procurement, or human resources. They can result from uncertainties in the program scope, requirements, assumptions, dependencies, or deliverables. They can also result from errors, failures, delays, or conflicts in the program processes, systems, or resources. To manage operational risks, program managers need to define and document the program scope, requirements, assumptions, dependencies, and deliverables clearly and accurately, implement effective program control mechanisms, such as change management, risk management, issue management, or performance measurement, and coordinate and collaborate with the project managers and other program team members.
-
Changing sponsors mid-program, presents a risk for any program whether before or after implementation. The program manager will need to champion the program to new sponsors, securing their buy-in and belief in its potential success and ongoing value. Understand the new sponsor's goals and priorities. Tailor your strategies to showcase how the program aligns with their vision and contributes to their objectives.
-
In my opinion one of the most underrated risk. Tech companies take if for granted that technology and software are not plug and play. Too many times I have seen interoperability issues grind a project to a halt. Put a project behind the timelines and be a major contributor to cost overruns. Lastly, I believe the biggest biggest misconceptions about tech risks is that they only involve data breaches or cybersecurity threats. In reality, tech risks can also include factors like system failures, technological obsolescence, regulatory changes, and even ethical considerations such as bias in algorithms or unintended consequences of AI systems.
-
In automotive manufacturing Operational risks play an important factor for hitting the committed deadlines. Struggling with every day requirements vs new program requirements implies deciding on meeting today customer requirements vs new program requirements, quality assurance, labor over time, people burning out, etc. Worse thing is all this has become something "normal" for many organizations. A different way to go is to have an excellent New programs leadership, a leadership with high skill of listening to every team member, every stakeholder and that who can plan and execute accordingly with the program vision (aligned with company strategy) and taking aside his/her ego.
-
These risks impact the day-to-day execution of the program, including planning, scheduling, budgeting, quality control, and resource management. Delays in procurement, team member turnover, or inadequate communication can all fall under this category. For example: The construction of the new Wembley Stadium in London faced numerous operational risks, including labor disputes, cost overruns, and design changes. These resulted in significant delays and budget increases.
-
If we discount the unknown risks not in our control, then almost all the other risks can be categorised into four major buckets: cost, quality, safety and time. To put it simply, is our program going over-budget? Is our program getting compromised on quality? Is our program creating any safety hazards? Is our program getting delayed? If we do RCA for these four fundamental questions, any risks other than external risks can be mitigated effectively.
Technical risks are the risks that can affect the functionality, performance, reliability, or security of the program outcomes, such as products, services, or capabilities. They can result from gaps in the technical knowledge, skills, or capabilities of the program team, or from changes in the technical specifications, standards, or methodologies. They can also result from defects, errors, or vulnerabilities in the program design, development, testing, or deployment. To manage technical risks, program managers need to assess and validate the technical feasibility, viability, and desirability of the program outcomes, ensure that the program team has the appropriate technical expertise and support, and apply best practices and quality standards for the program development and delivery.
-
These risks stem from technological uncertainties, such as untested software, reliance on unproven hardware, or integration challenges with existing systems. Security vulnerabilities and data breaches also fall under this category. For example: The launch of the Healthcare.gov website in the US was plagued by technical risks, leading to crashes and user access issues. This significantly impacted public perception and program adoption.
-
The sheer volume and velocity of data generated by a smart city digital twin pose a critical technical risk. Imagine a dynamic tapestry woven from real-time traffic flows, energy grids, building occupancy, and environmental sensors. Processing, storing, and analyzing this data deluge can overwhelm traditional infrastructure, leading to latency, hindered response times, and even system crashes. The cure? distributed processing (edge computing), smart data filtering, elastic cloud infrastructure, and real-time analysis tools. These technologies help smart city developers ensure their digital twins are robust and responsive, maximizing their potential to improve urban living and resilience. #digitaltwin #smartcities #Programmanagement
-
Technical risks arise from uncertainties or challenges related to the implementation of new technologies, systems, or processes within the program. This may include issues with system integration, software compatibility, technical failures, or performance bottlenecks.
-
Technical risk is a project not meeting its objectives because of technical problems. The examples of technical risks in project management can range from the project's complexity to the lack of knowledge and experience about the technology. Other examples include poor communication between team members and project managers and insufficient time to complete the project. There are many ways to manage technical risk, but it is essential to know what kind of risks you are dealing with before addressing them. For example, if you have a software project and your team has never worked on this type of software before, then you should be more concerned about bugs in your code than how much memory your computer has
-
Technical risks threaten program outcomes' functionality, performance, reliability, or security. Stemming from gaps in technical knowledge, team skills, or changes in specifications, these risks can also emerge from defects or vulnerabilities in design, development, testing, or deployment. To manage technical risks, program managers must assess and validate outcomes' technical feasibility, ensure the team has the requisite expertise, and apply best practices and quality standards. Fostering a culture of technical excellence and staying abreast of evolving standards are essential for successful program development and delivery.
Stakeholder risks are the risks that can affect the engagement, satisfaction, or support of the program stakeholders, such as customers, users, sponsors, partners, or suppliers. They can result from misalignment of expectations, interests, or needs among the stakeholder groups, or from lack of communication, involvement, or feedback from the stakeholders. They can also result from resistance, opposition, or conflict among the stakeholders, or from changes in the stakeholder preferences, behaviors, or requirements. To manage stakeholder risks, program managers need to identify and analyze the stakeholder groups and their expectations, interests, and needs, develop and implement a stakeholder engagement plan, and communicate and interact with the stakeholders regularly and effectively.
-
In my opinion the ‘people’ risks are the highest risks that need to be identified and managed. Stakeholders are ‘people’ who belong to various categories . Vendors , clients, users, influencers, decision makers etc Identifying these stakeholders and working out details on how they are impacted, what is their interest nature of impact , what can be done to minimise the impact plays a huge role in the engagement and communication strategy, The programs success is heavily reliant on this information which serves as a foundation for success. Investing time on this will provide its dividends
-
In the realm of program management, Stakeholder risks reign supreme. Imagine a smoothly sailing program suddenly rocked by the departure of a key stakeholder, or thwarted by resistance from those who should be allies. Even worse, shifting stakeholder priorities can turn carefully laid plans into dust. To navigate these treacherous waters, proactive measures are key: identify, assess, and mitigate. By mastering Stakeholder risks, a program can emerge stronger than ever.
-
what is often forgotten is that you need to keep your stakeholder analysis up to date. Especially when projects take longer, stakeholders will change and ao might their opinions. You need to verify on a regular basis if the analysis is still valid and adapt communication if needed.
-
Stakeholder risks pose threats to engagement, satisfaction, and support from customers, users, sponsors, partners, and suppliers. Arising from misalignment, communication gaps, or resistance among stakeholder groups, these risks can also be triggered by changes in preferences or requirements. To manage stakeholder risks, program managers must thoroughly identify and analyze stakeholder expectations, interests, and needs. Developing and implementing a robust stakeholder engagement plan, coupled with regular and effective communication, ensures alignment and fosters a positive relationship with stakeholders.
-
Implementing a data governance model for a Spatial Data Infrastructure (SDI) program carries potential risks: - Complexity: stakeholders views the model as it adds structure and processes, new protocols, data access restrictions and reporting requirements. This could slow down data exchange. - Flexibility: stakeholders who value agility could perceive it as restrictive, creating resistance and potentially hindering adoption. However, these risks are outweighed by long-term benefits. Clear roles, responsibilities, and processes lead to smoother operations, improved data quality, and increased trust in the system, ultimately enhancing satisfaction for all stakeholders. #GIS #PROGRAMMANAGEMENT #Dataanalytics #SDI
Benefit risks are the risks that can affect the realization, measurement, or sustainability of the program benefits, such as financial, operational, or strategic benefits. They can result from unrealistic or unclear benefit assumptions, targets, or indicators, or from lack of alignment of the program benefits with the organizational goals or strategies. They can also result from insufficient or ineffective benefit management processes, such as benefit identification, analysis, tracking, or reporting, or from external or internal factors that can reduce or negate the program benefits. To manage benefit risks, program managers need to establish and communicate the program benefit logic, rationale, and criteria, define and monitor the benefit indicators and metrics, and implement and review the benefit management plan.
-
While most of the risk types have been called out, I fell the following are the key watchouts in my view: 1. Early Risk identification, Communication and Acceptance - I prefer PMO over communicating on risks and ensuring customers acknowledgint them than be in a denial mode 2. Risk Reporting- we all want to be the "Good" cops and end up reporting the oft repeated "Watermelon" Status- Green on outside but Red inside. This should change and everyone should be committed towards transparency 3. Understanding and maneuvering the client organizational landscape - while everyone has a Governance structure, we should understand who are real decision drivers / blockers and work our way accordingly
-
Missed benefits can occur even if a program is successfully delivered, often due to factors such as inadequate design, ineffective implementation, or external obstacles. Additionally, cost overruns are a common risk where program expenses surpass the allocated budget, often due to unforeseen challenges, inadequate cost management practices, or changes in project scope.
-
This is probably one of the most common mistakes when program planning. If benefits are not clear and measurable, all previous steps will be wasted.
-
One benefit measurement risk I've faced is when there's no structured productivity data. It leads to stakeholders doubting the productivity benefits estimated in digital transformation projects. There's always uncertainty and mistrust when relying on estimates instead of concrete data. Although process mining tools can collect data, they can't capture information outside digital platforms. Expert judgment, backed by knowledge and experience, is irreplaceable. Consider using scientific estimation methods, like the Beta distribution formula, alongside expert judgment and technological tools when possible.
-
Will this program really help, really work? These questions are essential to creating value which then minimizes all other risk types.
-
Analyzing program risks is crucial for ensuring the success of any delivery. By identifying potential risks early on, project managers can develop strategies to mitigate or avoid them, minimizing the negative impact on projects timeline, budgets and overall outcomes. The most common types of IT/Telecom programme risks are: Cost, Schedule, Operational, Product, Commercials, Resources, Market, and legal risks.
-
Program risks can impact objectives. Common types include: 1. Schedule Risks: Delays due to resource issues, underestimated timelines, or external dependencies. 2. Cost Risks: Exceeding budget due to unforeseen expenses or scope changes. 3. Scope Risks: Misunderstandings or uncontrolled changes in scope, leading to misaligned objectives. 4. Technical Risks: Challenges with new technology or insufficient technical capabilities. 5. Operational Risks: Failures in processes, systems, or external events affecting operations. 6. Market Risks: Fluctuations in market conditions, economic downturns, or competitive pressures. Managing these risks involves continuous monitoring and adjustment throughout the program lifecycle.
-
While the absence of a comprehensive Risk Management Plan can exacerbate risks within a program, it's important to acknowledge that various types of risks also significantly influence its success or failure. These risks include strategic, operational, technical, stakeholder, and benefits risks, among others. A structured risk management plan, integrated into the Program Management Plan, serves as a vital guide to identify, analyze, monitor, mitigate, avoid, retire, or address these diverse risks effectively. Most importantly, such a plan ensures alignment with organizational risk tolerance, thresholds, and response strategies. Please indicate your agreement by liking this message.
-
From my point of view the assessment of risks in management differs from the stages that need to be implemented such as: during the planning of the organizational strategy (strategic risk, contingency plan), the corresponding one in the program management (program risks) and in the projects that will be required (project risks). Regarding the program management and in the context of the necessary risk analysis, the program governance, strategy alignment, stakeholder engagement, benefit management as well as program life management should be taken into account. At each of the above levels/stages a risk assessment board is required for the detailed risk planning.
-
The most common types of program risks include technical risks, schedule risks, cost risks, resource risks, stakeholder risks, quality risks, and regulatory and compliance risks. Program managers must identify and assess these risks to develop effective risk management strategies and contingency plans.
Rate this article
More relevant reading
-
Program ManagementHere's how you can manage scope changes and keep programs on track.
-
Program ManagementHow can you maintain quality outcomes despite program changes and uncertainties?
-
Program CoordinationHow can you improve a program that is not meeting its goals?
-
Time ManagementHow can you prioritize tasks in a project with many external dependencies?