Be wary of any project that includes a single point of failure, says Caseley, because it's almost a given that something will go wrong, and without a backup plan the entire project is at risk. Years ago, Casely says, he was managing a project for a large Canadian telecommunications firm to integrate new equipment. Everything seemed to be going smoothly; on time, on budget, and the project looked like it was going to be a success. "Famous last words, "Caseley says.
"We were dealing with a single vendor for this equipment, and we'd done our due diligence on them, and on the project. What happened was that the government suddenly passed a new sales-tax law that impacted our project, and that threw everything into a tailspin. Our vendor started having to go back and do retrofitting on previous clients, which threw them off schedule for our project. Then, they completely dropped the ball on doing ours, and we were left hanging. The project eventually got cancelled," he says. In other words, the red flag may be one that's external, and isn't in any way something a project manager can control.
Theoretically, you always should have a backup plan -- in the case of this example, a secondary vendor that could come in when the original vendor dropped out, Ward says. But in the real world, many times there isn't enough room in the budget to afford to keep a backup vendor on the books, or there isn't enough time in the project schedule to account for this.
"This comes down to a risk management problem. Sometimes, you have to assess the amount of risk and take the chance, and sometimes the risk is huge but you take the steps to mitigate it, like having a backup, or by instituting SLAs or by buying insurance. Sometimes, no matter what you do, the project can fail," he says.