Using AI in Risk Management—Opportunities and Risks
AI presents a risk management dual-edged sword: it's both a powerful tool for managing risks and something that itself requires risk management. Understanding both sides is crucial for project and program managers. Here are key considerations when using AI to enhance your risk management.
The Opportunities
- AI can enhance the approach to risk identification and monitoring. Loading your business case and risk registers into an LLM can help identify risks you may not have considered. But it goes deeper than that. For executives and portfolio managers overseeing multiple projects, AI can analyze patterns in risk registers to identify where similar risks appear across projects. A risk categorized as low-impact in isolation might become critical when it surfaces across three or four projects.
- AI helps with risk register management. AI can be used to flag risks that haven't been recently assessed, action items that have expired, or triggers that indicate certain risks require immediate attention. It can create mind maps that show interdependencies across projects and help identify when project-level risks should be escalated to program or enterprise levels.
- Multiple AI platforms that can be leveraged. Use multiple AI tools with the same prompt when analyzing risks, then compare the results. Different tools will produce varying results. Prompting why one tool identified something others missed can deliver valuable insights. Ask one AI to generate prompts for another AI to optimize the risk-related information you receive.
The Risks
- Sharing confidential corporate information in public AI environments can be problematic. Ensure appropriate safeguards are in place. Use privacy settings or set up your own internal AI environment.
- AI tools can take things out of context. Always verify AI outputs. Tools like Perplexity provide footnoted sources, making this easier. They allow you to check whether the AI has taken information out of context or misinterpreted source material.
- Data integrity must be managed. Your AI is only as good as the data it's trained on. If you're relying on AI to help make decisions but the underlying data has integrity issues, you won’t make much progress. Ensure you understand how the AI’s data was built, and how it will be kept up to date. Watch for data with multiple intervention points, unclear data stewardship, or unreliable transformations. With these issues, your AI will produce unreliable and possibly detrimental results.
Interestingly, the biggest risk might be not using AI at all. This technology is the direction business is heading, and familiarity with AI tools is becoming essential for sponsors, project managers, and program managers. Failing to develop AI competency is a risk that will become an issue as the technology continues to advance and reshape how organizations operate.
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Check it out - Office Hours discussion Re-thinking your job in a world with AI
I joined Christina Charenkova in an Office Hours session titled Re-thinking your job in a world with AI. Christina Charenkova is my co-leader on the LinkedIn Learning course titled AI-Powered Agile: Strategies for Modern Project Managers. We discussed the realities and myths of incorporating AI into daily work. We’ll also share tips on when and where to use AI effectively, and caution against situations where its use could negatively affect your workplace reputation. Our discussion will guide you in successfully integrating AI into your work habits. Click here to check it out.
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CHECK IT OUT! Bob has a new course and new, updated classes on LinkedIn Learning
Course overview: This course provides tips and techniques for managing stakeholder expectations, including addressing conflicting expectations, avoiding expectation pitfalls, and navigating a successful path from those expectations to project outcomes. Other topics include managing unreasonable expectations, dealing with the expectations of disengaged stakeholders, stimulating stakeholder curiosity to expand positive expectations, and managing the expectations of strategic, tactical, and process-minded stakeholders.
This course includes AI-powered Role Play. Role Play allows you to practice what you’ve learned in interactive simulations of real-world conversations. Check it out
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Course overview: The demands on project managers are expanding, and the presence of AI is expanding expectations even further, so project managers need to work smarter, maximizing efficiency to meet expectations. You'll learn techniques and tips for ensuring your project management efforts are focused on the right things at the right time and executed efficiently. Explore novel techniques for prioritizing the PM's work and matching work styles between project team members and key stakeholders. Learn about a model for acting decisively. Find out how to separate feedback from "distracting noise," track outcomes vs. hours for team members, plus much more. This course enables you to streamline project management workflows, prioritize tasks, and ensure seamless team collaboration to meet today's dynamic business demands. Check it out
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Course overview: In this course, designed for project management professionals and other leads who need to get a handle on their costs, author and Project Management Professional (PMP®) Bob McGannon shows you how to build a solid budget around a work breakdown structure, work with costing standards, and examine capital versus operating costs. Bob then teaches how to build, manage, and monitor the budget and shares tips from the trenches of real projects. Plus, get practical advice on recovering from overruns and dealing with scope changes. This course is part of a Professional Certificate from Microsoft. Check it out
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Course overview: Without risk, there can be no reward. But if not managed properly, risk reduces your ability to achieve your project's goals and could derail it altogether. In this course, author and PMP Bob McGannon shows you how to anticipate, assess, and manage project risk, whether your project is large or small. Bob explains how the PMBOK seventh edition deals with risk and why managing risk is so critical for project success. Discover how to gauge your stakeholders' tolerance for risk, assemble a risk plan, build a risk register, and maintain project continuity as risks crop up. This course is part of a Professional Certificate from Microsoft. Check it out
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Course overview: New consultants are often surprised by how agile they need to be to fulfill client expectations. The role you play may vary from contract to contract, or even shift within the same engagement. This course helps prepare you for the many different roles a consultant must play and succeed in the challenging world of consulting. Bob McGannon explains how your role differs from your job and how you can assess the needs of your client right at the start of the engagement. He then reviews the seven major roles—technical expert, manager, team leader, follower, reviewer, critic, and implementer—explaining when each role is most useful to your client. Live-action scenarios help you see the roles in action and apply what you have learned. In the final chapter, Bob discusses how to close the engagement, emphasizing the value your role has provided in order to position yourself for the next one. Check it out
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Additional thoughts can be found in my project management and outsourcing classes on LinkedIn Learning, including:
- Project Management: Technical Projects
- Strategic Leadership: Deploying Intelligent Disobedience
- Outsourcing Fundamentals, the first of six courses on outsourcing. This series of courses focuses on defining services, performing service-level management, and helping figure out what is required to support a business in an outsourcing or service provider scenario.
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This article is part of Bob’s Reflections newsletter series, which discusses project management, outsourcing, and “intelligent disobedience”, a leadership approach. If you want more of this content, you can subscribe to receive notifications when a new article is posted.
Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library or check out http://intelligentdisobedience.com/
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