Financial Services Industry Study Finds Swift Action and Proactive Approach Is Key to Reducing Project Risks
By Sylvie MacKenzie, PMP on Jan 29, 2012
Volatile markets, weak customer demand, and heightened regulatory scrutiny require financial services firms to flawlessly manage project portfolios to minimize risk. Those that identify failure early in the project development process and respond to problems as they arise can invest in higher-risk initiatives without threatening their bottom lines or their reputations.
Those are some of the key conclusions in Preemptive Action: Mitigating Project Portfolio Risks in the Financial Services Industry, a research report created by the Economist Intelligence Unit and sponsored by Oracle.
“[When] firms understand how to identify and deal with indicators of failure early in the planning process, they can safely invest in higher-risk initiatives, such as launching new products and acquiring other firms, without putting their reputations or bottom lines in jeopardy,” the report explains.
The report further explains that this proactive approach, which requires both a rigorous project management practice and intrepid executives willing to make difficult decisions, is unusual in the industry. Where it exists, it allows companies to mitigate project risks and use resources more effectively to propel growth. In its absence, companies become more risk-averse, focusing on low-risk projects that merely protect assets and meet regulatory requirements.
A discussion of the report and its key findings are the focus of a new Oracle Webcast now available on demand. In this Webcast, the benefits and impact of using the right project portfolio management solution is also discussed as a key factor in successfully managing the project portfolio and achieving success.
Success Factors and Other Findings
A primary conclusion of the report is that financial services companies that excel in executing projects, especially those that involve regulatory compliance, can gain a competitive edge by embracing opportunities unavailable to peers with a constrained appetite for risk.
Other key findings of the study include
- Managing must-do regulatory projects requires a balance between flexibility and adherence to process
- Processes are not sufficient in identifying signs of failure and finding solutions—effective communication and collaboration are crucial.
- Many companies fail to reassess risks throughout the project lifecycle—assess risks during planning and at project milestones