The Project Risk Blame Game
posted by John Spacey, May 11, 2011Is your organization managing risk or managing blame?
Fixed Price Blame Game
It is a common risk management technique — shift risk to vendors with fixed price contracts. There are several problems with this approach:1. Fixed price projects are more likely to fail (as compared to T&M projects).
2. There is no such thing as fixed price — requirements always change and consultants can easily find ways to charge more.
3. Fixed price projects are more likely to lead to a breakdown in the relationship with the vendor.
4. Legal battles over failed projects are a lose-lose scenario.
It is neither possible nor desirable to shift all project risks to a vendor.
The Unbalanced RACI Matrix
There is nothing wrong with having consultants do most of the work. However, consultants must be managed with diligence. Internal stakeholders are ultimately responsible for the success or failure of every project.If your Responsibility Assignment Matrix (RAM or RACI) assigns all responsibility and accountability to your vendors — your project is doomed from the beginning.
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