The first step in achieving great project outcomes is to clearly define the Result, how success will be measured, and what is important to the various stakeholders. This reduces the ambiguity in the Result and in how success is evaluated. This alone dramatically reduces uncertainty throughout the project. The next phase of risk management is to define uncertainty in scope. Just describing what defines Scope is a challenge. Well defined Scope is more than the Work Breakdown Structure, but without the WBS there is great uncertainty. People love to guess at scope rather than do a detailed breakdown – scope in vastly underestimated. There is a driving need to say things are easier than that really are. People do not take the time to plan – to work the project from beginning to the end. There is a ‘and then the miracle happens’ syndrome in project scope. The uncertainty in under or un-estimated scope, seems to me, to be the common cause of project failure.

Project managers have a high probability of failing to meet cost and time budgets in projects with un-estimated scope. I believe the WBS must be taken to sufficient detail that allows the duration, effort (labor hours), and cost to be appropriately estimated. If you do not know the amount of work required to produce the result, how do you know how long it will take, how much it will cost, or how much labor it will take to do the work.

In projects that are repetitious, the scope can be accurately estimated because the road has already been traveled by people on this project. See question four below.

The questions to keep in mind as you evaluate your project for risk is scope are:

1.      Has all the work or deliverables been identified?

2.    Has the work been reduced to chunks for effort to be planned? For duration to be calculated? For cost to be estimated? These chunk sizes and type of chunk can be different to rapidly answer each of these questions.

3.    Do you know the level of uncertainty in each scope dimension?

a.     What is the accuracy of the cost estimate? Plus or minus 20%

b.    Uncertainty in the Labor Plan? Probably under 25%.

c.     How about the duration? Expert schedulers say that one is minus 20% and plus 15%

4.    Does each of your support team have the skills, knowledge, and attitude required to complete their part of the scope and contribute to project team work?

5.     Have you or someone you know personally witnessed the demonstration of these skills, knowledge, and attitudes?

Scope, from my perspective, is an experienced guess until the WBS is completed with a labor plan, cost estimate, and preliminary schedule. Then we can discuss the risk in scope. To evaluate risk in scope, you, most likely, will have to evaluate risk in every element of the WBS.

What happens in many projects rather than the result dictating scope with defines cost, duration, effort. The reverse happens – what is available in labor, in cost, or in time dictates the scope which then dictates the result.

On one project, we did a detailed estimate and came in 25% over the budget – only a million dollars. We reduced the size of the project then waited four months getting a second estimate. The project was delivered for the budgeted value because we took the time to learn the scope. In this case, cost was a significant driver and time was flexible. We drove lots of risk out of the project by taking the time to get good cost estimates from the 50 or so subcontractors involved in the project.

As a project manager, your job is to drive uncertainty out of a project. Your purpose is to ensure things are known, are communicated, are understood, are completed early (early start times like float are myths). You constantly monitor progress, effort, and cost against what was expected searching for deviations. You really do not manage the routine, you verify the routine, but you look for deviation, for surprises (to have a surprise you have to have a plan), for change from the expected.

To manage Risk in Scope, you have to be willing to invest the time to prepare a plan or you carry a great big contingency for all the things you know. Notice that in well planned work, the variation is easily 20%. I have gone into projects with a 10% contingency and learned it should have been 20% painfully.

The Risk Management project requires the listing of the risk and the probability it will occur. Guessing at that probability drives the Risk Response. Identifying the risk is the easy part even evaluating its impact or its consequence is not too hard. However, the frequency or probability of occurrence is a challenge. Just what does 30% chance of rain mean? What is 30% chance that X scope item will delay four weeks because the work is difficult mean? More on this later.

Following Risk in Results and Scope is Risk in Performance – completing the work of the scope. Uncertainty changes form in performance, but that is next time.