SWOT Analysis
A SWOT analysis can be used to identify the threats and opportunities facing a programme or project. It has the advantage of being quick to implement and is readily understood. SWOT analysis brings together the results of both internal business, and external environmental analysis. It helps to gain a greater understanding and insight into competitors and market position.
A similar and related form of analysis is known as PEST, examining Political, Economic, Social and Technological factors.
RACI - Responsible, Accountable, Consulted, Informed
A RACI diagram is used to describe the roles and responsibilities of the participants in a business or project activity The four participatory roles are:
- responsible; those who undertake the activity or the resources
- accountable; those who take the credit for success or accountability for failure, of which there must be at least one for each activity
- consulted; those whose opinions are sought
- informed; those who are kept advised of progress
An expanded version, RACI-VS, can also be used, adding the roles of:
- verifies; the party who checks whether the product meets the quality criteria set out in the product description
- signs off; the party who approves the verification decision and authorises the product handover
Stakeholder mapping
Stakeholders are the individuals or groups who will be affected by an activity, programme, or project. They could include:
- senior managers whose business areas are directly or indirectly involved
- end-users including customers outside the organisation
- suppliers and partners
Effective management of the stakeholders’ interests includes the resolution of conflicting objectives and representation of end-users who may not be directly involved in the activity.
Stakeholders’ interests can be managed through stakeholder meetings and specific user panels providing input to a requirement specification. The key objective is to capture, align, record, sign off and deliver stakeholder objectives. Guidance on stakeholder mapping is available at the link below:
Cause and effect
A cause-and-effect diagram takes the shape of a fish-bone diagram, and can be used to represent event causes and potential impacts. It is a graphical representation of the causes of various events that lead to one or more impacts.
Risk mapping
This is a simple representation of risk in terms of likelihood and impact. It requires that the probability of a risk occurring is classified as low, medium, or high, with a similar classification for the impact if the risk materialises.
A combined risk classification of high probability and high impact if the risk occurs is clearly an important risk. The classification can be extended to include very low and very high.
Summary risk profile
A summary risk profile (sometimes known as a risk map) is a simple mechanism to increase the visibility of risks. It is a graphical representation of information normally found on an existing risk register.
The project manager or risk manager needs to update the risk register on a regular basis and regenerate the graph, showing risks in terms of probability and impact, with the effects of mitigating action considered. The graph must reflect current information as documented in the risk register.
The profile must be used with extreme care and should not mislead the reader. If an activity has over 200 risks, it will be impractical to illustrate all the risks. It will be more appropriate to illustrate the top 20 risks and making clear what is and is not illustrated.
A risk tolerance line can be used to show the overall level of risk that the organisation is prepared to tolerate. If exposure to risk is above this line, managers can see that they must take prompt action. The parameters of the risk tolerance line should be agreed at the outset of an activity and regularly reviewed.
The use of RAGB (red, amber, green, blue) status can be useful for incorporating the status reporting from risk registers into risk profiles and can provide a quick and effective means of monitoring.
Good examples of risk management and risk matrices are available at: Project Routemap: Risk Management
Decision trees
A decision tree is a useful tool for enabling choice between several courses of action. It provides a highly effective structure within which options can be explored and possible outcomes can be investigated. It also helps to form a balanced picture of the risks and rewards associated with each possible course of action.
A decision tree is particularly useful when choosing between different strategies, projects or investment opportunities, particularly when resources are scarce.
Decision tree analysis is explained in more detail at: Project Management Institute: Decision tree analysis for the risk averse organisation