Resource Risk Sources

The following are the sources of resource risk

  • People risks
  • Outsourcing risks
  • Money risks

People risks

Risks related to people represent the maximum risks (by count) in the PERIL database, accounting for more than two-thirds of the total risk incidents. The sources of people risks can be divided into two main categories, which are as follows:

1. Availability

Kendrick (2008) discusses four scenarios related to the availability of people that lead to people risks. They are as follows:

  • Staff leaving the project permanently
  • Staff leaving the project temporarily
  • Staff joining the project late
  • Queuing issues involving people not dedicated to the project

2. Skills

Skills are another key reason for people risk. If a person does not have the required skills to perform a job, he/she will either fail completely or do it with a very low productivity. This will affect the project quality/schedule.


Outsourcing risks

According to the PERIL database, outsourcing accounts for more than a quarter of resource risks. Though the frequency of this risk is usually lower than that of people risks, the impact of outsourcing risks is significantly higher. Outsourcing is peculiar in nature.

The work outsourced to a vendor is executed as a project by that vendor. So, from a vendor’s perspective, the outsourced work has all the attributes of a project and thus, all the risks associated with it. But from the perspective of a project manager or owner, the risk associated with the outsourced work is considered as an ‘outsourcing risk’.

The outsourced work is generally done somewhere else; so, the project team may not be able to observe it and assess the potential risks. It is only through the monitoring and reporting of the ‘outsourced project’ that the project manager can keep a tab on the outsourcing risks.


Money risks

The third source of resource risks is money. Money, in a project context, should be viewed as a resource that can help you to buy raw material, pay for wages and other project expenses and maintain a contingency buffer for managing risks. A great American industrialist and thinker, Henry Ford, once said:

“Money is nothing more or less than a tool to do things with. It is like the fuel that runs the furnace or the belt that runs the wheel—only a means to an end”.

Sarav Author

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