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SAP BPC & EPM
Thought Leadership

EPM Project Management Success: The 3 Lines of Defense to Reducing Risk on an SAP BPC EPM Project

Posted by Sebastien Verstraet on Tue, Nov 10, 2015 @ 09:11 AM

tight_rope-1A risk is the possibility of an event or a condition that could negatively impact a project. There are many events or conditions in any EPM BPC implementation that can derail the project, because BPC is a complex tool that touches many areas of your organization. This article is intended to help mitigate risk.

  1. Identify Risks

All projects have risks. It is important to identify a risk early because the later it is identified, the higher the likelihood it will manifest into an issue with probable impacts on completing the BPC EPM project on time and budget with the expected quality.

Here are some quick hit tools and techniques to help identify risks:

 a. Documentation Reviews: Whether it be a new EPM BPC implementation, a BPC upgrade, or an EPM Assessment, always review key project documentation with the stakeholders and get their feedback and comments, so that everyone agrees the documentation meets pre-established expectations.

b. Information Gathering Techniques: Brainstorming, Delphi Technique, Interviewing, Root Cause Analysis - although you do not want to waste anyone’s time by adding meetings on the team members’ calendars, investing the time in gathering information via various techniques with the stakeholders will help in identifying gaps, and therefore risks.  

c. Checklist Analysis: Use previous similar projects - do not reinvent the wheel. If your organization has already gone through an EPM solution implementation, use the process and the checklist that made it successful.

d. Assumption Analysis: Make sure to validate the project planning assumptions and always verify with the stakeholders that the assumptions are correct.

e. SWOT Analysis: The SWOT analysis will point out items to watch to ensure the project adds value to an organization and to ensure the risks are discussed.

f. Expert Judgment: Don’t discount your judgement and the judgement of subject matter experts.  Coupled with data, experience is a powerful guiding principle.  Always validate as much as you can with EPM solution experts in the field.

  1. Manage Risk

As a project manager, the job does not end once the risks are identified and communicated; this is where it really starts! Once the risks have been identified, the project manager should do the following:

a. Clarify Ownership Issues: The next step after the identification of a risk is to make clear who is responsible for what risk. This ensures that the risk is in someone’s hands and that person is responsible for making sure that risk does not become an issue. Some risks could have a domino effect across models in BPC, i.e. a risk in the finance model may impact the OPEX model so stakeholders in both models may have ownership in the risk.

b. Prioritize Risks: All risks are not created equal. Some risks will have a low impact and some will have a high impact. Some risks will also take time to solve and some can be solved very quickly. For these reasons, a project manager should prioritize the risks with a method that is as objective as possible with as much data as possible. The focus should be on the big risks.

c. Analyze Risks: Understanding the nature of a risk is a precondition for a good response. Therefore, take time to have a closer look at individual risks and don't jump to conclusions without knowing what the drivers of the risks are. A BPC project manager should reduce assumptions and replace those with facts to drive an appropriate mitigation plan.

d. Plan and Implement Risk Responses: There are three types of risk response: risk avoidance, risk minimization, and risk acceptance. Avoiding risks means you take the appropriate action so that the risk no longer exists. Minimizing risks means that you try to prevent a risk from occurring by influencing the causes or decreasing the negative effects that could result if the risk is realized. Accepting a risk means that the project sponsor and the project teams accept the fact that the possibilities to influence it prove to be very difficult, time consuming, or relatively expensive.

  1. Communicate Risk

It is one thing to identify risks, but if they are not communicated, there is no chance to act on them before they become an issue. One approach to communicating risks is to have project risks part of any default meeting agenda. The risks should be at the top of the list, not at the bottom, because this will show how important they are to the project manager, and gives the team the opportunity to discuss them early on in the meetings. It is also important to communicate the risks as early as they have been identified so it gives the project sponsor the opportunity to provide input into the mitigation plan to either reduce or eliminate the risk.

Risks are inevitable in any EPM project, and it is important to take the proper action regarding risks so that they do not become issues, impact the project negatively, and prevent your organization from having a successful EPM solution on time and on budget. Following the steps of identifying, communicating, and managing the risks will help keep the project on track with a successful outcome.

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Topics: Process Improvement, Thought Leadership, Enterprise Performance Management (EPM), Project Management, BPC (Business Planning & Consolidation)

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