Don’t Forget About External Risks!
Most project risk conversations focus on what’s happening internally, like scope, resourcing, and schedule constraints. But some of the biggest threats come from outside the business, from people and forces you can’t control. Here are some external risk areas that can catch even experienced project managers off guard.
- Vendor and supplier lead times. When you’re relying on external contractors to start work at a specific milestone, their lead times could change significantly. The six-week lead time they told you in January could become ten weeks by March if their capacity shifts, and they’re unlikely to tell you about it unless you ask. To avoid surprise delays, communicate with vendors regularly and review any schedule changes.
- Third-party approvals and permits. Legal reviews, building permits, and regulatory signoffs are outside of the project team’s control and can completely stall a project. The mistake is treating permit approvals like a task you can manage, when really this task is sitting in someone else’s queue. Do research to identify regulatory lead times, ask about current lead times when establishing the project schedule, and build in a time buffer for any regulatory approval task.
- Outsourced IT and infrastructure changes. Technology support and maintenance changes, like network upgrades, system migrations, or applying security patches, often occur on a fluid schedule. These activities can break assumptions that your project schedule depended on. An IT planned server maintenance window you didn’t know about could wipe out the weekend of work time you counted on to catch up on delayed tasks. To avoid this type of surprise, work closely with all support teams to make sure the latest infrastructure schedules are reflected in your project timeline.
- Currency fluctuations. Currency swings can affect international projects or those that require components purchased overseas. A project that met business justification parameters in Q1 can look very different by Q3 if currency fluctuations increased your actual costs. Make sure you have risks and contingency funds set aside for unexpected cost changes.
- Product delivery charges. Schedule delays might require expedited shipping to get back on track. This could mean unexpected charges from the transport vendor. Make sure you have risks and contingency funds for shipping cost variations.
- Weather and seasonal factors. Weather impacts are obvious for construction projects but are easy to overlook in other projects. Shipping delays around holidays, staffing gaps during flu season, and office closures for weather events are easy to forget in contingency plans. Make sure your project has the equivalent of flashlights and rain gear baked into the plan!
- Partner dependencies. Joint ventures, integration partners, and subcontractors on someone else’s payroll can help your project but add the risk of lack of control. Partner’s internal politics and priorities become your risk the moment project work depends on their delivery. A partner reorganizing their team midstream can quietly reset the project timeline without any official notice. Ensure a balanced benefit and risk analysis is performed when the project depends on partner behaviors.
Take a recent project of yours. Did any external risks come up? Even if they didn’t, think about whether the project could have faced an external risk. Here’s a great place to use AI: ask your favorite tool to provide you with possible external (and internal) risks that your project might face!
For more about project risks, check out Bob McGannon’s Project Management Foundations: Risk course.
Coming Up
I finally finished updating the scripts for the Project Management Foundations update! My office is set up for recording, and the sample video is waiting for feedback from the LIL production team. I’ll be recording voiceovers as you read this.
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