Capture and Manage Risks
objectives inputs & outputs approach actions exceptions checklist texts
Objectives top
To ensure that any Risks inherent in the Bid are identified, and that their mitigation is planned, and then properly managed.
Inputs and Outputs top
|
Inputs |
Outputs |
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Risk Folder (particularly to Manage Risks for updating) |
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Risk Folder (updated by Manage Risks) |
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Approach top
The management of Risk in this Core Process (Manage a Bid) is focused particularly on any Risks that:
- a winning Bid will not be completed and submitted by the Customer’s deadline,
- could be inherent in any Contract that the company subsequently concludes with the End User or Customer,
- could impact the Project that would result from a successful Bid.
The Risk Manager for the Bid invokes the generic Sub-process Manage Risks (see Support Work), to identify these Risks, quantify their potential impact, plan their mitigation and monitor their emergence and expiry. This activity should cover both the Bid, and the Project that will ensue if the Bid is successful.
The Checklist below suggests examples of potential Risks that should be considered for inclusion in the Risk Folder. It is not an exhaustive list.
Actions top
|
Item |
Responsible |
Action |
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1 |
Bid Risk Manager |
Open a new Risk Folder for the Bid (and Project) |
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2 |
Bid Risk Manager |
Identify the Risks to which the Bid and/or the ensuing Project will be subject. Use the generic Sub-process Manage Risks to record them, plan how they will be managed, and monitor them as the Bid proceeds |
Exceptions top
None.
Checklist top
Examples of possible risks include:
Technical
- Complexity of Solution - those with many tightly coupled components are known to be difficult to implement or build
- Bought-in items - beware off-the-shelf packages or items which are not mature in the version which will be purchased (particularly avoid becoming a beta customer), and bespoke procurements which require careful Supplier control
- Novelty - state of the art technology has the same problems as the use of immature products. There is also the lack of familiarity of staff with the product
- Requirements that are not clearly, unambiguously, and completely expressed
- Poor definition of Acceptance Criteria
- Solution performance which is not supported by proper analysis and modelling.
Management
- Unrealistic Start or End date
- A large number of external dependencies in the Project Plan
- The need to recruit staff if we win
- The need to train staff if we win
- Staff not assigned full-time to the Project.
End User or Customer
- Weak, unclear, or unquantified Business Case
- Budget not approved
- Long, complex mechanism(s) for approving decision/Contract
- Customer not capable of meeting its contractual obligations
- Lack of End User involvement in the Project.
- Comments on draft contractual and technical documents not sent within agreed timescale.
Note that End user or Customer comments on contractual deliverables need very careful and firm management. Comments on draft document(s) can continue to appear indefinitely, e.g. comments on draft 2 include comments that could and should have applied to draft 1, or (worse) comments on draft n+1 reverse comments previously made on draft n. This is a key area for strong Issue Management.
Contractual
- Guarantees of performance
- Warranty (especially on intangible items such as software)
- Acceptance criteria/procedure to be defined in the End User Agreement,or Customer Contract with no early date for agreement
Bank guarantee/bond required.
Financial
- Exchange rate fluctuations
- Interest rate fluctuations
- a payment schedule which assumes negative cash flow
- Inflation rate fluctuations on long Projects.
Texts top
None