Expertise, estimations and project risks

Which category a risk should fall into requires a degree of subjectively from those assigning the rating; which in most situations involves expert opinion. If the project manager relies only on a few experts to assess impact, potential identified risks may be understated, remain unmitigated (not acted upon) and later cause issues for the project. Equally, true mitigation factors may not be properly assessed; the experts will not know as much about the project’s situation as other members of the team, or other stakeholders.

What tasks or steps should a project manager take to minimise expert bias? The project manager should, where possible, draw on a pool of experts, who are not on the project team nor responsible for the project’s tasks, to validate the assumptions, estimates, and risks provided on a project. Using a pool of experts should be considered more carefully, especially if the project will employ contractors.

If a pool of experts is not available, the project manager should use assumptions and constraints methods in calculating estimates to be included in the response, as well as having PERT three point estimation [ (O+(MLx4)+P)/6 ].

In the calculation of risk, the project manager should not limit the input to that of experts. Building on the risk example above, the probability of risk B was calculated using Monte Carlo analysis to be 47%. What value should be assigned to the Impact? If the project manager accepts only limited expert input, there are added risks that the impact may not be accurate, thus not mitigated.

This article suggests that each project risk should be carefully assessed by the stakeholder group for the project. The ‘aggregated mean value’ of the assigned impact should be used to make a reasoned decision. Whether or not you weigh each of the stakeholder’s responses the same will be based on your organisational factors.

If you do weight their responses, think carefully about whether the weighting should or should not be shared with stakeholders, as this can lead to arguments or disagreements. People may not like to know that their option is weighted less than another’s, but sometimes it may be necessary. Below is an example.

If we go back and use the aggregate impact, we find the risk rating as follows:

Using aggregate risk rating, and putting in place expert pools are just a few examples of how project managers can take steps to minimise the bias of expert opinion in making decisions for their project throughout the various phases, and to make sure the overall project risk and estimates of work are reasonable for the tasks required. Using a simple risk table (Probability x Impact) to validate your information can help you achieve this in a measured way.