a potential event that has a positive impact on the achievement of project objectives.
Opportunity Management is the practice of identifying, evaluating and pursuing factors that can maximise the positive impacts, creating value. Opportunities may be about improvement (doing things better) or innovation (doing things differently).
There a numerous parallels between risk and opportunity management. In particular, you (change manager) are responsible for managing project opportunities, and opportunity management is part of everything we do. Good managers continuously identify, evaluate and manage opportunities.
There are four basic strategies that can be adopted for any opportunity:
Exploit - take action to build the opportunity into the project plan, ensuring it occurs, so that the beneficial outcome is certain (probability becomes 100%).
Improve - identify actions with the purpose of increasing the probability of occurrence and or increase the impact (benefits) should the opportunity occur.
Transfer - allocate management to another party who is best able to handle it, both in terms of maximising the probability of occurrence and increasing the benefits which may occur.
Accept (tolerate) - leave the situation to chance, if the opportunity occurs the project is fortunate, if not the beneficial outcome is not realised.
Just like risk, opportunity is a fundamental concept in project contracting. Your suppliers will cost risk and opportunity into a job, and you must always know exactly how your commercial agreements handle opportunities. Opportunities may take many forms:
Cost reduction - e.g. re-negotiating prices
Cost recovery - recovery of previously spent cash from a supplier for services/products already supplied.
Periodic cost improvement - activities in one financial year that has derived benefit benefits in future years, or agreements on costs that will reduce for future work.
Cost avoidance - avoiding cost that would have been incurred, by not doing things or doing things differently
Income generation - creating additional income in the course of the project.
Quality improvement - improving quality for the same cost or same quality for less.
Scope reduction - reducing scope while still meeting the business need, or eliminating functionality that is not required.
Capital deferral - savings generated from delaying capital expenditure.
It must always be borne in mind that an opportunity may create additional risks, which should be added to the risk register and managed in the same way as other risks. Risk, opportunity and issue management are interlinked, and should be considered together. A risk may become and issue, or the resolution of a risk may reveal an opportunity.
Many change managers only explore opportunities when faced with potential cost overruns, why not start earlier! Then you might surprise people, and finish under budget. Also, you may find opportunities that don't save money but do improve quality or customer experiences without additional cost. These are also good.
