TL;DR
To transform from a “bureaucratic layer” into a strategic asset, PMOs must avoid these common pitfalls in risk management:
- Relying Solely on Lagging Indicators: Traditional metrics (the “Iron Triangle” of on-time, in-scope, and under-budget) only tell you a project failed after it is over.
- Neglecting Benefits Realization: Risk management is not just about technical specifications; it is about ensuring the intended business value is actually created.
- Operating with “Dirty” or Static Data: Reliable data is the foundation of risk mitigation. Relying on manual, error-prone spreadsheets instead of dynamic, real-time reporting tools prevents PMOs from detecting area for refinement in real time.
- Treating Risk Registers as Compliance Tasks: Low-maturity PMOs often treat risk logs as a one-time activity.
- Failing to Model Trade-offs: PMOs often act as passive reporters rather than decision-support hubs. Without “what-if” scenario planning, leadership cannot effectively navigate budget cuts, resource shifts, or changing market priorities.
The Bottom Line: Modern risk management requires shifting the focus from “doing projects right” (operational efficiency) to “doing the right projects” (strategic alignment and value density).
Top Risk Management Mistakes PMOs Should Avoid
Poor or no risk management can cause myriad problems, including low-quality results, project overruns, and reduced stakeholder satisfaction, research finds. But proactive and high-quality risk management approaches can help organizations with resource allocation and decision-making. Moreover, they can contribute to greater project success.
Learn the top PMO risk management mistakes and discover how leading KPIs and governance best practices, along with the right tools, prevent costly portfolio issues
The Need for Proactive Risk Mitigation
Organizations must move from project portfolio risk avoidance to proactive risk management and mitigation. Basic risk logging simply isn’t enough.
Instead, PMOs must employ a strategic approach. This starts at the top and needs to be organization-wide.
Through a standard methodology, the PMO and individuals involved in any projects throughout the company should apply various approaches and risk management tools to curb threats, thereby diminishing their effects and carrying out projects more successfully.
5 PMO Risk Management Mistakes
Risk management is no doubt central to your efforts as a project management office. How can you ensure that you are engaging in proactive risk mitigation? Here are the top five most frequent and costly PMO risk management mistakes you can make—and what to do instead.
1. Treating Risk Management as a Project-Level Activity
Risk management is not merely a project-level activity. It must be a portfolio-level strategy. By focusing on individual projects and their associated risks, you miss the big picture.
Projects are interconnected, and portfolios have interdependencies. The PMO needs to account for all of the risks associated with the entire portfolio. Projects and project components depend on one another, after all.
Risks are not confined to specific initiatives; they often affect other projects and the holistic portfolio. This approach creates silos among teams and misses the entire concept of strategic alignment, which ensures that projects connect to larger organizational goals. It also leads to misallocated resources, an important risk to note.
Research backs this up, saying a portfolio-wide approach is necessary to managing risks. It also suggests that risk transparency is an important element of PPM success. Instead of examining the risks associated with unique projects, look at the portfolio as a whole. Identify the threats associated with each project, as well as the holistic portfolio.
Consider interdependencies, thinking about how risks from one project could carry over to others. Develop a standardized approach for combating threats. That ensures that all team members are following the same set of steps and aligning on their efforts when coping with inevitable risks.
2. Focusing Solely on Lagging Indicators
Lagging indicators are no doubt important to your holistic project portfolio management strategy. But solely focusing on these metrics is one of the top PMO risk management mistakes you can make.
For example, if you only look at KPIs like project failure rates, you are taking a reactive approach.
In practically any scenario, you can’t simply rely on past mistakes to inform future efforts. Take sports. Everyone knows you need a strong offense and defense to build a solid team. The same goes for project management.
Lagging metrics only allow you to look backward. You can’t prevent errors from happening—you can only reflect on what went wrong. Moreover, lagging indicators don’t give you any insight into why what went wrong did go wrong.
Instead, balance these metrics with leading indicators. Leading metrics are predictive. They are proactive, enabling you to take action to improve your outcomes. For example, in terms of risk management, a leading indicator could be the quantity of risks you have identified and resolved before they interfered with your project. In this case, you are taking definitive steps to improve outcomes, rather than simply conducting a post mortem.
Remember: Both leading and lagging indicators are important for risk management and holistic project management. But they are stronger when used in combination than alone.
3. Failing to Tie PMO Risk Governance to Strategic Objectives
We have examined the mistake of treating risk management as a project-level, siloed activity. This is related to failing to tie PMO risk governance to strategic objectives.
Both of these mistakes are reminders that no project exists in a vacuum. As with individual projects, all of the PMO’s activities must be connected to the organization’s strategic objectives. Risk governance is no different.
Risk governance does not occur in isolation; it must account for the entire nature of all of the enterprise’s actions and, yes, risks. Because strategic alignment means that the projects you undertake are proactively linked to overarching business goals, your risk management strategy must connect to high-level objectives as well.That helps ensure that your projects are delivering value. It also boosts your prioritization efforts.
This way, you are focusing on risks across your project portfolio and handling them as they affect the larger organization, not simply discrete projects.
4. Relying on Manual, Siloed Processes for Tracking Risks
A PMO increases its risks when it relies on manual and siloed processes such as spreadsheets to track risks. Instead it should use integrated and automated risk management tools to track threats and mitigate them.
Traditionally, of course, manual processes were necessary because more complex platforms did not exist. But today, we have far more robust tools like Prism PPM for handling the project portfolio management process, including risk management.
Unfortunately, some organizations, particularly longstanding ones, are set in their ways. They continue to use the same checklists or Excel spreadsheets to track risks. But manual processes are prone to error. Moreover, if you continue to use these rudimentary tools, you are failing to account for potential new threats.
Innovative technologies specifically designed for PPM offer special features that allow you to manage risk automatically and in real-time. For example, they collect and analyze data, providing ample reporting to help you assess the risk landscape and take action before they escalate. They can also create a centralized repository of information so you don’t need to manually gather data from various sources.
Additionally, they provide a consolidated view of your projects and their interdependencies, giving you a big-picture look for the holistic PMO and portfolio risks. You will be better equipped to monitor risks and take real action. These features go far beyond rudimentary spreadsheets and checklists.
5. Not Executing “What-If” Scenario Planning
Our final PMO risk management mistake is lacking the ability to execute “what-if” scenario planning to model and mitigate interdependency risk. In project management, what-if scenario planning involves identifying potential outcomes by assessing what might happen in various scenarios.
By brainstorming different situations or unexpected incidents that could occur, you can then map out how these variables (or their absence) will affect the outcome. The what-if technique allows you to explore risks and mitigate them before disaster strikes.
For example, you might consider what would happen if funding is cut short, if a team member is absent for a given length of time, or if a client changes the scope of the project. For each scenario, you would map out the risks and impact associated with it. That way, you have the information you need to solidify plans and workarounds for handling unexpected situations and uncertainties.
It is possible to conduct what-if planning manually, mapping out scenarios under various strains. However, today, tools like Prism PPM aid you with the process. Prism PPM’s What If feature allows you to change variables to assess their impact on different project and portfolio factors. You can input potential scenarios to see “What will happen to X if Y or Z occurs?” Then, you can create your responses to these different scenarios.
Technology has the capacity to allow you to consider a much higher volume of scenarios than a manual approach will, enabling you to create an exhaustive list and account for more emergencies. This is an effective tool to use as part of a comprehensive strategy for risk mitigation.
Conclusion: Mitigating PMO Risk Management Mistakes
Your PMO’s approach to risk management is critical to project and organizational success. These five PMO risk management mistakes can derail your portfolio—and your larger company.
By keeping these errors in mind as you solidify your strategies, you can steer clear of common challenges that can interfere with your performance.
Prepare your PMO for the future and reduce unpredictability. See Prism PPM’s advanced capabilities in real-time risk visibility and portfolio control firsthand and learn how the platform helps you mature your PMO’s practice. Book a 15-minute consult or a 45-minute demo today.