A cornerstone of effective project management is the identification, assessment, mitigation planning and tracking of project risk. With the aim of continually improving project management and oversight, EERE mines best practices and lessons learned to incorporate it into its knowledge base and enhance practices and procedures. Mindful of managing the risk associated with the activities it funds, EERE examines risk at the programmatic and project-level.
Managing project-level risk requires knowledge of the different risk factors involved in the project, which in turn means having a clear understanding of all the ways a project could encounter problems. As part of the effort to continually improve project risk management, EERE has developed and refined tools to track risk factors systematically. Often, at the Technical Project Officer’s (TPO’s) discretion, appropriate tools and templates may be shared with Recipients.
A Recipient successfully using an adapted version of an EERE tool was recently identified through Independent Project Reviews (IPRs). This Recipient, which is working on a new energy-saving technology for computer servers, was provided this tool by the TPO to aid the Recipient in managing its own risk and performance by incorporating a best practice used by EERE.
This risk management tool provides a systematic way for evaluating a range of risk factors that allows the user to rate the different levels of risk ranging from “very low” to “very high.” Adapting it to its specific needs, the user regularly considers sixteen different risk factors including areas such as organizational structure (i.e., project management and administration), performance (with respect to project milestones), monitoring, reporting, contractor or Subrecipient performance, safeguards and security, legal and/or regulatory issues as well as nine other factors. These are arranged in an easy-to-view spreadsheet.
The spreadsheet includes other categories such as risk status, management responses, and project financial considerations. Risk status is either considered “open” or “retired” with retired risk factors no longer tracked. The spreadsheet also notes if the risk has or has not been realized and the actual or expected date of any such realization. It also considers the type of consequences such as those that impact schedule, cost, performance metrics, or even reputation. In this instance, the Recipient updates the spreadsheet quarterly.
While the Recipient identified in the IPR has adapted the tool to reflect its organization, it also shares the resulting document with the DOE TPO. The TPO uses this information to evaluate systematically how well the project is progressing and to track potential problem areas. Furthermore, the risk management tool has facilitated an open dialogue between the Recipient and EERE and is helping the project to meet its goals on schedule and within budget.