Determining Your Confidence Levels for Success Through Risk Analysis
At project inception, you will need to determine the likelihood of success of your various activities and tasks. As part of conducting a comprehensive risk analysis and schedule risk analysis, you must identify the various factors that will propel, or hinder, your project towards success.
From the primary risk analyses, you will create three distinct generalizations about the future of your project. These generalizations can be further identified as the confidence levels for your project. Take a look at how determining three critical confidence levels can foster a successful project.
Identifying High Confidence Levels From Risk Analysis
A high confidence level enhances executive support and encourages additional spending if resources begin to diminish. A high confidence level is the most likely, positive outcome of the project, which is based on your risk analyses. With a high confidence level, the extraneous factors, such as environment and political concerns over your project, have a low chance of impacting the completion of your project.
However, you must also take into account how the skills of your project management team and your workers affect the course of your project. Furthermore, you must distinguish this best-possible outcome from the generalized, most likely outcome.
Determining a Most Likely Outcome in Risk Analysis
Having the best outcome of a project does not necessarily equal the most likely outcome of a project. The best chances for success rely on the continued support of your team, executive management, political entities, and the public need for the completion of the project. Unfortunately, these factors will contribute to the determination of a most likely scenario, which may be less than the best possible outcome, to your project. After you have reviewed the factors most likely to impact your project, you will need to determine the factors, which will most likely result in the failure of your project.
Defining a Worst-Case Scenario
Sometimes, factors are likely to cause your project to falter, or fail entirely. These factors define the worst possible outcome of your project; however, knowing how these factors may affect your project gives you the ability to change their impact.
For example, breaking ground on a new project may be delayed by local, state, or federal governments. If you know of an upcoming piece of legislation, which will probably result in government intervention in your project, you can work to promote the project, dispel any myths surrounding your project, and encourage a positive conversation about the goals of your project. Therefore, mitigating these potential, probable risks can mean the difference between receiving executive approval and waiting for assignment on another project in the future.
Confidence levels exist as the three generalized outcomes of your risk analysis. By conducting a thorough risk analysis, you can see how different factors will affect your project. Ultimately, you must determine the best-case, probable, and worst-case scenarios for a project, which gives you greater control over the course of the project.
Key Things to Remember
- When few factors are likely to negatively influence your project, you have a high confidence level as a best-case scenario.
- The probable scenario is where you consider the positive and negative impact on your project and determine the most likely outcome.
- Based on the factors that may cause the failure of your project, you must create a worst-case scenario. This is the most important aspect of any confidence levels.