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The
Purchasing Risk Analysis
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Risk analysis is
a powerful project management technique. You can use risk
analysis to address the risks that make your procurement job
unnecessarily difficult.
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A risk analysis is "figuring out what can go wrong and how to
either avoid it or fix it," said Diana Lindstrom, a former
strategic sourcing manager for a huge telecommunications firm
and currently the president of Los Lobos Consulting - a company
specializing in project management and coaching project
managers.
"By figuring out what can go wrong -identifying risks - we're
one step ahead of Murphy's Law."
Great project managers see projects in a logical sequence of
systematically executed events. Developing a procurement risk
analysis is no different. |
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"Once we've identified the risk, then we assign a level to that
risk," Lindstrom explains. "You can use 1 through 10, ABC, or
any other ranking system."
The final piece of the procurement risk analysis is the plan.
"The risk plan includes the steps necessary to avoid the risk or
mitigate the fallout from the risk if it does happen," she says.
"By knowing the risks, understanding how likely each one is to
occur, and having a plan in place to deal with it, we're able to
successfully complete projects."
Using a risk plan can help a procurement department
demonstrate its value to the organization.
"Most internal
customers don't understand why |
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procurement needs to follow all the steps that are laid
out by the company. And they don't care," she notes.
"So, using a risk plan becomes an educational tool. It teaches
folks what happens if the procurement steps are not followed. It
shows them in black and white what can happen - the risk - and
how procurement professionals deal with it - the plan. It shows
them that procurement wants to help them do business in a less
risky way."
So, in summary, identify risks, assign levels to those risks,
determine the steps to avoid or mitigate the risks, and share
the plan with stakeholders. |
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