Far too often we hear from our healthcare clients that ERP and BI projects fail.  And, far too often when we ask what lessons have been learned, we hear the Project Risks were never identified or managed.

In effort to assist the general healthcare community and address this concern, allow this blog to provide some guidance and an overview of a working implementation risk mitigation approach. As you consider an Enterprise Resource Planning (ERP) and/or Business Intelligence (BI) implementation, consider that most implementation methodologies are based on a project Risk Mitigation predicates of PMI or Six Sigma; both do provide overviews for Projects Managers (PM) to use while they develop their detailed work plans for software implementation projects and while creating deliverable documents.
Though this blog is detailed, realize that all implementations differ by both the project content and the implementation team.  Accordingly, adherence to the standards contained herein may be done in the general “spirit” rather than necessarily to the “letter”.  This means that the exact deliverable names and task names may vary or some of the tasks may differ in nature.  However, an implementation methodology should always be used as a baseline for project planning.
Understand that the probability a program (or project) will produce the required standard of quality and within an acceptable time and cost will depend to a large extent upon the effectiveness of the Concept Phase of the system life cycle.

One of the major threats to the success of a project succeeding is dependent on the risks and how they are managed.

Quantifying and evaluating project risk factors is a process that is frequently overlooked. The results of these oversights can be disastrous. Project Management implementation methodologies address the factors that affect the “riskiness” of systems projects. But, methodologies for defining risk factors to be addressed, and techniques for managing or “ensuring” against these factors if often not examined. Proven techniques for reviewing project risk with senior management and project sponsors should ALWAYS be conducted if the project is to be successful. Just as in the case of other “investments”, there are relationships between the level of risk and the benefits or rewards of the projects being considered.
Project Risk Management Plans often do not identify the Risks nor propose a management solution of any identified risks. Consider the following possible sources of causes for unsuccessful completion of cost or timescale overruns.
Undocumented Management System – Without a fully accepted and authorized PMO approach by senior management or Project Management System, the project will be left to formulate and speculate on the polices and methods they should follow (know all vendors have their “own” methodologies and these must be integrated to the organization’s). Leadership should be clearly stated and visible to all project participants.
Newness of staff, methods and procedures – Experience has shown that a major source of risk is the “newness” whether it is staff, methods, or procedures. Well-tried and tested methods and procedures using staff well leads to lower risk. New methods and procedures with new staff must be regarded as high risk.
Incorrect mix of types of team members – The psyche of individuals within a team affects the performance of a project. Their aspirations and perceptions must have a healthy mix to promote effective project performance.

Sample Methodology/Project Risk Management

  • Risk Identification – Employ Project Gantt and PERT charts to identify all individual and relational project risks.
  •  Risk Assessment – Document and resolve technological, environmental and interpersonal assumptions, risks and obstacles.
  •  Solution Development – Facilitate brainstorming sessions to co-develop solutions for minimizing or nullifying risks; Feasibility study and report.

Project Scope Management

  1. Conceptual Definition – Allow management and team members to fully understand the essence and criticality of the project scope.
  2. Scope Definition – Define the beginning and end. Describe and clarify the scope. Produce Statement of Work (SOW) and Project Overview Statement (POS). Quantify project feasibility and Return on Investment (ROI).
  3. Task Definition – Break the scope down into tasks that will meet scope objectives, document tasks and subtasks.
  4. Task Performances – Set performance expectations using the Work Breakdown Structure (WBS) model; Accountability through tracking goal-to-actual task completion.
  5. Scope Change Management – Build controlled flexibility into project plans by developing, documenting, and training Change Management processes.

Project Quality Management

  1. Quality Planning – Reverse-engineer quality processes to meet scope requirements. Quantify quality costs and resources.
  2. Quality Control – Co-develop measurement metrics. Quantify min/max thresholds, and reporting requirements.
  3. Quality Improvement – Continuous quality improvement through the implementation of Total Quality Management (TQM) mechanisms, tools and techniques. Root Cause and Parent Analysis, Preventive and Corrective Action.
  4. Control Charts – Statistical Process Control. Track and trend the health of the project with meaningful charts.

Project Cost Management

  1. Cost Estimating – Cost Benefit Analysis delineates incremental and cumulative cost estimates for all tangible and intangible project-associated costs.
  2. Cost Budgeting – Provide clear, understandable project costs and returns forecast to ensure executive management approval.
  3. Cost Control – Employ BCWS (Budgeted Cost of Work Scheduled), BCWP (Budgeted Cost of Work Performed), ACWP (Actual Cost of Work Performed) tracking mechanisms to plot, quantify, and report any cost variances, forecast-to-actual.

Project Procurement Management

  • Procurement Planning – Document processes for inspections, spot audits. Define procurement metrics, spending limits, and ownership. Finalize subcontractor and vendor agreements.
  • Cost Budgeting – Estimate project procurement costs, and integrate into project Gantt chart schedule. Gain management’s procurement budget approval.
  •  Cost Control – Comprehensively track costs via the Cost Performance Index (CPI). CPI = BCWP divided by ACWP. Distribute weekly cost reports.

Project Communication Management

  • Role and Responsibility Definition – Define and document processes for maximizing standard and escalation communication efficiency.
  •  Staffing and Organization – Develop and train cross-departmental and cross-functional communication, performance tracking, and accountability reporting processes.
  • Team Building – Utilize individual core talents to achieve group goals. Train and develop high-performance, self-directed Work Teams.

Project Time Management

  1. Schedule Planning – Develop project schedule based on sequence of activities comprising the critical path.
  2. Duration Estimation – Calculate duration of each activity using historical data, Delphi, and Three-Point Techniques.
  3. Project Network Definition – Document all project activities, and define dependent relationships of activity predecessors and successors.
  4. Schedule Definition – Develop documentation for scheduling activities, problem escalation, compressed schedules, and work packages.
  5. Project Schedule Control – Keep the project on time by managing composite dependencies, discretionary constraints, lag variables, and inter-project dependencies.

Project Risk Management

  • Risk Identification – Employ Project Grant and PERT charts to identify all individual and relational project risks.
  • Risk Assessment
    • Document and resolve technological, environmental and interpersonal assumptions, risks and obstacles.
    • Various categories of risk models
      • Project risk
      • Financial risk
      • Technology risk
      • Legal risk
      • Other risks
      • Components of project risk
      • Product risk, Team risk and Target/Client risk
      • The risk assessment process
      • Determining a risk management plan
      • Developing risk management agreements
      • Contingency planning
      • Conducting risk assessment
      • The relationship between risk and other issues
      • Estimates
      • Quality
      • Cost-benefit
      • Project development strategy
      • Managing risk during the project development process
      • A Project Management Scalable Methodology Guide

The following table addresses the structured methods for identifying, evaluating, and responding to risks throughout the project environment.




Not a significant investment; familiar project tasks; low risk technologies; low impact of project failure.


Moderate investment; some unfamiliar tasks and technologies; medium risk impacts.


Significant investment; unfamiliar project tasks; new or innovative technologies.


Complex project with potentially volatile risk issues and exposures; uncertainties inherent in plan and technologies.

Risk Elements Analysis

Use management judgment to list expected risk areas; compare project objectives to risk items and identify manageable risks. Document risk areas and evaluate low-medium-high risks; identify risks with significant impact. Establish structured methodology for identifying, quantifying, and assessing all potential project risks. Document risk identification, probability, and consequences for objectives, specifications, and stakeholder interests; employ Delphi, multi-attribute utility and PERT analysis.

Risk Avoidance and Mitigation

Identify technologies or approaches presenting unattractive risks; plan actions to minimize risk exposure. Assign study teams to develop risk avoidance and/or mitigation plans for excessive risk items. Develop risk deflection strategies for all significant project risks; incorporate adaptive actions into project plans. Conduct cost/benefit analysis to select candidates and strategies for risk deflection.

Risk Management Plan

Structure PM approach and work processes specifically to address risk areas and exploit opportunities; use modular and phased approaches to compartmentalize risk and minimize risk compounding. Address each significant risk item and apply a specific PM or technical approach to minimize, manage, and control risk events. Develop action steps and staffing to reduce uncertainties and control risk areas. Document plans for risk focused management attention to respond to all risk areas; apply risk templates (or lessons learned) to project life cycle.

Risk Metrics

Identify issues to monitor using subjective or qualitative risk assessments; follow-up reporting risk issues at periodic reviews; highlight high-risk areas and adverse trends. Assign all risk areas low-medium-high assessment and update and report status and trends; use qualitative or subjective metrics if none better available. Develop measurable indicators of risk exposure; report status and trends. Develop metrics for risk areas, report status and trends; track impact of risk control actions on lessening risks; focus on areas not responding to corrective actions.


  • Solution Development – Facilitate brainstorming sessions to co-develop solutions for minimizing or nullifying risks; Feasibility study and report.
  • Projects using a Risk Analysis and Management Service can benefit by:
    • Better identification of risks and their implications
    • Feedback to moderate and reduce impact of adverse events
    • Improved contingency planning
    • Clearer insight into decision making
    • Reduction in time/cost escalation and performance shortfalls
    • Increased confidence.

Project Human Resources

  • Role and Responsibility Definition – Facilitate participative, interactive decision making in assigning resource/task ownership. The goal is willingness through group/resource consensus.
  • Staffing and Organization – Utilize market-driven or resource-driven project methodologies to maximize combined efficiency of skills, facilities, equipment, money and materials.
  • Team Building – Galvanize recognition and reward reinforcement as motivators for achieving performance that is on-track, on time, and within the project budget.