Why Every Change Starts with Risk and Issue Management Efforts?

As a portfolio management practitioner, I would say that change is a result of either a risk management or issue management effort. Let me explain.

Risk management is the process of identifying, assessing, and controlling risks to portfolio objectives. Risks can be anything that could potentially prevent the portfolio from being successful, such as changes in the customer’s requirements, delays in the delivery of materials, or unforeseen technical problems.

Issue management is the process of identifying, assessing, and resolving problems that occur during the portfolio life cycle. These problems can range from minor setbacks to major roadblocks that threaten the portfolio’s success, such as a funding delay, disagreement between team members, or a delay in the completion of a task.

In both risk management and issue management, the goal is to identify and address potential changes to the portfolio so that they do not impact the aggregate portfolio value delivery.

However, there is a key difference between the two processes. Risk management is a proactive process that seeks to prevent risks from occurring or minimize their impact, while issue management is a reactive process that focuses on resolving problems that have already occurred.

Here is a case study to illustrate the difference between risk management and issue management.

A portfolio’s project team is developing a new software application. During the risk management process, the team identifies the risk that the customer’s requirements may change. The team takes steps to mitigate this risk by creating a change management process that allows the customer to make changes to the requirements without disrupting the project.

Later in the project, the customer requests a change to the requirements. The project manager follows the change management process and the change is approved. The change is implemented without causing any major problems for the project.

In this case, the change to the requirements was a result of the risk management process. The team identified the risk and took steps to mitigate it. As a result, the change was able to be implemented without causing any major problems.

Here is another case study.

A Portfolio’s project team is building a new factory. During the construction, the team encounters a problem with the foundation. The problem is not something that was anticipated during the risk management process. The team needs to find a way to resolve the problem without delaying the project.

The project manager creates an issue log and assigns the problem to a team member to investigate. The team member finds a solution to the problem and the project is able to continue on schedule.

In this case, the change to the project was a result of the issue management process. The team identified the problem and took steps to resolve it. As a result, the project was able to continue on schedule.

I hope this explanation helps to clarify the difference between risk management and issue management.

In short, change is a result of either a risk management or issue management effort. The key difference is that risk management is a proactive process that seeks to prevent risks from occurring or minimize their impact, while issue management is a reactive process that focuses on resolving problems that have already occurred.

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