Managing Project Risk

Tasks and Milestones

Drawing up a milestone plan with due dates helps to verify if a project is where it should be. Periodic reviews should be done to see which milestones were delivered against the assignment date and what needs to be accomplished to complete the next milestone. Several major milestones should be assessed when implementing Starbucks' Project Improvement Plan. If the project has a hard deadline for completion handed to the project team, it is wise to back plan the milestones to ensure that the milestone dates will correspond with the project due date assigned. The first milestone is the final decision of how the implementation will take place. Announcing the go-forward plan ensures that the entire team knows which way the project will be headed. For the purposes of this project, an automated ordering system will be implemented instead of the current process, which is calling out the order to the drink maker, or writing the order on the cup. The second milestone is completion of training on the new system. Training the employees on how the equipment works can provide crucial feedback from the users prior to installation. The third major milestone is installation of the equipment into the stores. And the final milestone is tracking the success against the baseline data of the original process. This will determine if the project is a success or failure.

Project Risks and Impact on Project Outcomes

Any project implementation carries a certain number of risks. How the team prepares for risk can possibly prevent them from occurring. Knowing what can cause a project failure can point the team in the right direction the first time. There are several risks this project can run into during the implementation.

Vendor delays to install the new store equipment can halt the project and can affect every store involved in the implementation. On a scale of one to 100, not having equipment installed is a risk to the project of 75. It does not detriment Starbuck's overall current sales as the stores already have customers walking away due to the long wait but it does lose sales every day the implementation is not in use (assuming that the new process will decrease the transaction time and increase sales).

Another risk is the software for the automated equipment. Should the software not perform as planned, this could slow the process down even further. If the stores do not have a way to ring up the customers outside of the new equipment, all transactions will revert to manual, thus increasing the wait time even more. Not having an alternate way of ringing up customers is a risk of 100 and can affect all stores with the new equipment should it be a server crash instead of a one-store occurrence.

A third risk is improper or incomplete training for the employees. Since the employees will be there to help the customers along in the automated process if need be, not knowing how to work the units would be a risk factor of 50. One would hope that someone in the store would know how the system works and could be called upon, although it would take that employee away from his/her current task to help another.

A forth risk would be lack of buy-in from store management. This could jeopardize the complete project if the stores are unwilling to change and go auto. This would hold a risk factor of 100 and would impact all stores should management not agree with the new process.

The last risk would be if the automated process took longer than the current process. This has the highest risk factor as well as the most expensive. This would mean total project failure and would need a complete redesign to reach a successful outcome.

Wyner (2003) suggests gathering quantitative and qualitative data when considering improving a process to determine if a problem exists in consumers' minds, and if so, identify which part of the process is the cause. Quantitative data is useful, but does not tell the entire story as to how a customer feels because of its numerical nature. Qualitative data is preferred because it is possible to tap into the emotional side of the consumer using focus groups, qualitative surveys, and the likes. Sample selection is also important when using qualitative research methods to ensure the population is accurately represented.

Once the improvement has been implemented, the marketing department is the tip of spear when relaying the change to consumers. Marketing sets the stage for the customer experience and; therefore, must be intimately involved at this point so the improved quality of the product is clear to customers. Additionally, good marketing presents a unified view of the organization so consumers can tell that all the components of the company are moving in the same direction.

Mitigation Strategies

How Starbuck's is able to mitigate each project risk can set the stage for keeping the budget and timeline under control. When the agreement is made with the equipment and software suppliers, it is advisable to negotiate a penalty for non-delivery or non-performance. Should the applications fail or not be as promised, the suppliers should be found accountable. Usually a hefty monetary fine keeps suppliers to a timeline or are more apt to keep the project manager abreast of any issues well before the due date.

Training risk should be the responsibility of the group in charge of the instruction. If a third party is doing the training, a penalty clause is applicable. If the trainers are in-house, the training should start well in advance of the rollout and the project manager should be micromanaging the status of all employees trained. Once the rollout date is set, no untrained employees should be allowed to punch in for work. This will hopefully be an incentive to employees to finish their training on the new system.

Management buy-in risk could be a disaster if not handled properly. Starbuck's obviously does not want to fire staff due to unwillingness to improve on current processes so care must be taken to have management on board the project prior to the implementation phases. Having management involved from the ground level can provide substantial feedback to the process plus allow members to feel their point of view is valuable and is taken into consideration. Forcing a process onto the stores will only create ill will and may produce unnecessary turnover.

Learning that the automated process takes longer than the original would be a complete project disaster. Prior to adopting a full-scale roll out of the system across their operations, Starbucks should measure the effectiveness of new automated ordering system by comparing certain metrics against those of the current process. Metrics such as the time it takes to enter