Change Management and Risk Management

I had come across people trying to find the difference between Change Management and Risk Management. Thought of putting these two management activities together with clarity so that one can differentiate between the two and also understand when to use which one. One should remember that these two are distinct project management activities with certain information exchange when required.

Change Management

Change Management deals with making decisions regarding major unforeseen changes that might crop up during the execution of a project. A decision to accept or reject the change might have an impact on any of the following –

• Budget and Cost
• Resources
• Schedule
• Customer Relationship

Thus, the people involved in making such decisions also need to possess enough authority to accept the impact on these factors and absorb the impact. So, most of the organizations set up a change control board which analyzes the required change, arrive at the possible impact and take decisions. The execution team is bound to abide by the decision made by the change control board.

Risk Management

Risk Management involves

• Identifying the potential risks
• Analyzing each identified risk to assess its probability of occurrence and the heft of the impact in case it occurs
• Deciding whether the risk requires mitigation or contingency planning based on its probability and impact
• Monitoring the identified Risks
• Managing the Risk Mitigation and Contingency Plans that are put in place

Change Management and Risk Management

As you have observed, Change Management and Risk Management are two distinct project management activities. However, as with the case of any project activities, these two also have certain inter-dependencies.

Change Management has to consider the potential risks while taking decisions on changes. A simple example would be – suppose there is a scope creep into the project, and the change management board has taken a decision to absorb the change, while meeting the schedule timelines so as to meet the customer expectations. Here, the assumption that is made by the board is that the entire team would stretch to absorb the scope creep. But, there are potential risks in this decision –

• Some of the team members may not extend cooperation on the decision made. This would lead to schedule slippage
• Team burnout can occur with the stretched timings
• Attrition can happen with the team members not in favor of the decision made

So, Change Management has to cross-check with Risk Management on these aspects.

Risk Management has to consider time to time the possible changes in the domain, technology, resources, voice of customer and customer contact personnel interacting with the team. Any of these changes would ultimately have an impact on the project execution and /or project deliverables, amounting to the project success or failure.

Conclusion

Change Management and Risk Management are two distinct activities in management with clearly defined objectives. However, there are inter-dependencies between the two activities at the defined junctures.