How do you handle risks in waterfall projects?

1 Define the scope

The first step to handle risks in waterfall projects is to define the scope clearly and realistically. The scope is the set of features, functions, and requirements that the project aims to deliver. It should be based on the needs and expectations of the stakeholders, as well as the available resources and constraints. A well-defined scope helps to avoid scope creep, which is the tendency to add more work or change the specifications during the project, increasing the risk of delays, errors, and conflicts.

2 Identify the risks

The next step is to identify the potential risks that could affect the project's scope, quality, time, or cost. Risks are uncertain events or conditions that could have a positive or negative impact on the project objectives. You can use various techniques to identify risks, such as brainstorming, interviewing, checklists, SWOT analysis, or historical data. You should involve the project team and the stakeholders in this process, as they may have different perspectives and insights on the risks.

3 Analyze the risks

Once you have identified the risks, you need to analyze them to determine their likelihood and impact. Likelihood is the probability that a risk will occur, and impact is the effect that a risk will have on the project if it occurs. You can use a qualitative or a quantitative approach to analyze risks, depending on the level of detail and accuracy you need. A common qualitative method is to use a risk matrix, where you assign a rating (low, medium, high) to each risk based on its likelihood and impact, and plot them on a grid. A common quantitative method is to use a Monte Carlo simulation, where you run multiple scenarios of the project outcomes based on the probability and impact of each risk, and calculate the expected value and variance.

4 Plan the responses

After analyzing the risks, you need to plan how to respond to them. There are four main strategies to deal with risks: avoid, transfer, mitigate, or accept. Avoiding means changing the project plan or scope to eliminate or reduce the risk. Transferring means shifting the responsibility or impact of the risk to a third party, such as an insurance company or a subcontractor. Mitigating means taking actions to lower the likelihood or impact of the risk. Accepting means acknowledging the risk and its consequences, and preparing a contingency plan or reserve in case it occurs. You should choose the most appropriate strategy for each risk based on its priority and feasibility, and document it in a risk register or a risk management plan.

5 Monitor and control the risks

The last step is to monitor and control the risks throughout the project lifecycle. This means tracking the status and performance of the risks, updating the risk analysis and response plans as needed, and implementing the response actions when a risk occurs or is triggered. You should also communicate the risk information and changes to the project team and the stakeholders regularly, and report any issues or deviations from the plan. You can use various tools to monitor and control risks, such as risk audits, risk reviews, risk dashboards, or risk logs.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?