Risky Business: Risk Management for Localization Project Managers
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In his first article on localization
(L10n) project management, The
Life, or Lack Thereof, of a Localization Project Manager,
Willem Stoeller provided five critical success factors
for localization project management and placed them
in context for the overall project lifecycle. In this
second article in the series, Stoeller presents the
case of incorporating the “kittens, puppies,
alligators and tigers” of risk management into
the L10n Project Manager’s “toolkit.”
A simple spreadsheet is enough to get started; and
the payoff in retaining long-term customers will far
outweigh the initial effort required.
Risk management is the means by which uncertainty
is systematically managed in order to increase
the likelihood of meeting project objectives. Although
risk management is one of the most important tools
available to Localization Project Managers, it has
been ignored due to a lack of awareness and training.
What is Risk Management?
Risk management is the systematic process of
managing an organization's risk exposures to achieve
its objectives in a manner consistent with public
interest, human safety, environmental factors and
the law. It consists of the planning, organizing,
leading, coordinating, and controlling activities
undertaken with the intent of providing an efficient
pre-loss plan that minimizes the adverse impact
of risk on the organization's resources, earnings,
and cash flows.
The American Risk and Insurance
A more practical definition for our
The systematic process of proactively
managing uncertainties, constraints and assumptions
in order to increase the likelihood of meeting our
project objectives (e.g. quality, budget and schedule).
Two words in this definition draw
our attention: systematic and proactively. Most project
managers deal with risks in a passive manner, i.e.,
“when the event occurs we will deal with it.”
Being proactive is the only way to plan for risks
and their potential negative impact on the project.
As for anything else in Project Management, a systematic
process for risk management avoids reinventing the
wheel on each project. It also allows for easier transfer
of lessons learned from one project to the next.
Although risk management in the narrow
sense focuses on uncertainties, it is important to
include project constraints and assumptions. We need
to evaluate how constraints impact our ability to
successfully complete the project. Additionally, many
practitioners include in risk management the ongoing
assessment of the validity of our project assumptions.
Where Does Risk Management Fit Into the Project Management
In a previous article,
Life, or Lack Thereof, of a Localization Project Manager,
I introduced a set of Localization Project Management
Phases and Activities, based on A Guide to the
Project Management Body of Knowledge (PMBOK®
Guide), published by the Project
Management Institute. I will now use this framework
to identify where risk management takes place in the
project life cycle.
Localization Project Management Phases
and Activities (Click
How Is Risk Management Conducted and What Are Its
- In the Statement Of Work (SOW) formulation
phase, the project manager (PM) identifies and
documents all known project constraints and assumptions
as part of the SOW. Also, any prominent uncertainties
are identified for discussion with the customer.
- During the Project Approval phase, the
customer acknowledges the documented assumptions,
constraints and uncertainties in the SOW by signing
off on this document.
- In the Project Initiation phase, risk management
planning takes place: risks are identified and analyzed
together with the development of risk responses
(see the next section for further details).
- During the Project Execution phase, a risk
audit can be performed to determine if the project
is healthy overall. The details of such a risk audit
are outside the scope of this article, but readers
can find more details on this subject in Project
Risk Management, A Proactive Approach by Pail
- In the Project Control phase, the PM conducts
ongoing risk monitoring:
- Are all project assumptions still valid?
- Can the project still be completed successfully
within the specified constraints?
- Has the probability or impact of any documented
risk changed? If yes, the PM will document the
changes and possibly revisit the related risk
- Are there any new risks to document?
- In the final phase, Project Closure, the
PM documents the lessons learned so that future
projects build on them. For risk management, we
focus on transferring knowledge about identified
risks, related risk responses and to what degree
these risks impacted the project.
Risk management planning
takes place during the Project Initiation Phase. The
deliverables from risk management planning are updated
on an ongoing basis (risk monitoring) in the Project
Control Phase. Risk management includes the following
How Can I Start to Apply This as a Localization Project
Manager in My Daily Activities?
- Risk identification involves determining
which uncertainties, assumptions or constraints
might affect a localization project. There are three
complementary approaches to obtaining this information:
- Interviews and/or brainstorming sessions with
the project stakeholders (the project team and
- Reviewing lessons learned from prior projects
through archived risk management planning data,
customer satisfaction records, etc.).
- Thoroughly inspecting the budget and schedule
for the project. Any activity that was hard
to estimate most likely contains uncertainty
and therefore represents risk. Schedules and
budgets usually have their own set of assumptions
that should be carefully reviewed.
- Reviewing the SOW for assumptions and constraints.
- Qualitative risk analysis involves categorizing
the risks, assigning a probability and impact to
each risk, and finally, prioritizing all risks.
- The use of risk categories helps in prioritizing
risks and risk response planning. Typical risk
categories and examples for localization are:
- Customer-associated risks:
- Unclear/incomplete requirements
- A customer making frequent changes
to project requirements during a project
- A customer not being efficient, effective
or complete in meeting its project responsibilities
- A customer being insufficiently available
or insufficiently knowledgeable to provide
real input into requirements and/or
the review process
- A customer having unrealistic expectations
about the outcome of the project, resulting
in high-risk constraints
- Contractual constraints such as penalties
for not meeting deadlines and/or termination
- Schedule-associated risks:
- Missing tasks or milestones
- Inaccurate estimates
- “Crash-and-burn” schedule
(A schedule based on substantial amounts
of overtime for the whole project team)
- Resource-associated risks:
- Unclear roles and/or responsibilities
- Resources not available
- Non-matching or inadequate skills
- Missing or inadequate equipment
- Staff turnover
- Experience-associated risks:
- New language(s)
- New technology
- New development environment
- New hardware
- Product-associated risks:
- Incomplete internationalization of
the product to be localized
- Incomplete localization kit(s) from
- By using a qualitative approach to estimating
the probability and impact of each risk, the
PM can prioritize the risks and relate them
to specific responses.
- On localization projects, there is normally
no historical data available to create a
quantitative estimate of the probabilities
involved. Instead, the PM can follow the
simple approach of assigning a high or low
probability to each risk.
- The same approach is used to quantify
impact, i.e., each risk is assigned a high
or low impact.
- Combining risk probability and impact allows
risk prioritization. A graphic way to remember
each category is described by Robert Tussler
in his 1996 article:
- Tigers are risks with both high
probability and high impact. These are
dangerous risks and need to be neutralized
as soon as possible through a combination
of risk mitigation and contingency planning
(please see below for further details).
- Alligators are risks with a low
probability, but high impact. Alligators
require close monitoring and a contingency
plan. Project assumptions are treated either
as alligators or puppies, depending on the
project impact if the assumption fails.
- Puppies are risks with a high
probability and low impact. The main
concern is to insure that they do not evolve
into tigers. This typically requires monitoring,
but no risk response plan.
- Kittens are risks with a low
probability and low impact, and therefore,
can be ignored at the PM’s discretion
- Risk response planning employs a number
of different techniques to reduce risk on localization
- Risk acceptance boils down to “address
it when it happens” and is used for kittens.
- Risk avoidance involves changing the
project scope, schedule or approach such that
the risk no longer exists. This is used for
- Risk mitigation involves a mix of techniques
aimed at either reducing the probability or
impact of a risk. One example of probability
reduction, although not often used on localization
projects, is redundancy. Risk mitigation is
used for tigers.
- Risk contingencies or backup plans
are used in case the risk still materializes.
For tigers, the PM may want to actually invest
money and time to put the plan in place. For
alligators, the PM can simply prepare a plan
- Risk reserves are buffers in our schedules
and budgets set aside for alligators or puppies.
- Risk protection involves insurance
to cover certain business risks, e.g., errors
and omissions. This approach is generally not
applicable to localization project risks.
- Risk transfer involves contractual
transfer of the risk to another supplier. This
is commonly used if no staff with the right
skills is available, e.g., subject matter experts
or technical specialists.
- Risk monitoring and control involves
closely monitoring tigers, alligators and puppies
to confirm whether the probability or the impact
of any prior identified risk has changed. It also
includes checking that all project assumptions still
hold and if achieving the project objectives within
the current constraints is still feasible.
Now your question at this point is
probably, “This sounds interesting, but where
do I start?” The very first step in risk management
involves the following activities:
- Make sure errors and omissions insurance is in
place for you as a localization vendor.
- Carefully review Terms and Conditions for each
customer with an eye on your liability.
In the SOW (contractual agreement),
explicitly list (1) all known constraints, assumptions
and uncertainties, and (2) all customer responsibilities
describing the project.
- Always conduct at least one meeting to ensure
that customer expectations are fully understood
before completing the SOW. This will reduce the
risks of unclear/incomplete requirements and will
allow for early flagging of unrealistic expectations.
- Throughout the project, review all assumptions
and constraints on a regular basis. Immediately
address the issue of failed assumptions.
Once the above has become standard
practice, it is time for proactive risk management
in the form of risk identification, risk analysis
and risk response. The main focus should be on tigers
and alligators. Establish your own list of risk categories
and related risk responses, and use that list as a
guideline for risk identification on each project.
No sophisticated tools are needed; a simple spreadsheet
is sufficient to document all risks and risk response
planning. It is important to involve customers in
risk planning. It will greatly increase their trust
and train them to be better customers.
References for Further Study
have not found any publications addressing risk management
within the context of localization projects. The following
general resources can be used for further study of
risk management for project management in general:
, a certified Project Management
Professional, has been active in localization and
internationalization since 1992. He has frequently
taught localization topics at the Localization Institute.
Stoeller is also a board member of the Silicon Valley
Chapter of the Project Management Institute and a
visiting professor at the Monterey Institute of International
Studies. He can be reached at
by permission from the Globalization Insider,
23 September 2003, Volume XII, Issue 3.7.
the Localization Industry Standards Association
(Globalization Insider: www.localization.org,
and S.M.P. Marketing Sarl (SMP) 2004
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