Principles and Practices of Performance-Based Project Management®

CONNECTING THE 5 PRINCIPLES AND 5 PRACTICES OF PERFORMANCE-BASED PROJECT MANAGEMENT®

TO INCREASE THE PROBABILITY OF PROJECT SUCCESS

Both are needed, neither can work alone Niwot Ridge, LLC

!  A basic truth, law, or assumption !  An accepted or professed rule of action

!  Habitual or customary performance !  Repeated performance or systematic exercise for the

purpose of acquiring skill or proficiency !  Condition arrived at by experience or exercise

!  All progress to plan measured in tangible evidence. !  Performance measured in units meaningful to the

decision makers. Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

Structure of Performance-Based Project Management®

" Detailed handbooks for the 5 practice areas of Performance Based Management !  Identify Capabilities ! Define Requirements ! Establish Performance Measurement Baseline (PMB) ! Execute the PMB ! Apply Continuous Risk Management

" Work examples for each practice that can be put to work as a reference design for the actual processes needed to increase the Probability of Program Success.

Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014 Performance-Based Project Management® is a register trademark of Niwot Ridge LLC

Our REAL goal is to align all the measures of performance into a single cohesive

view of the Probability of Success

Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

Motivation for integrating the Principles and Practices is to increase the probability of success

" We need to… !  Improve our ability to define an Executable Plan !  Improve our ability to track Execution to Plan ! Provide better visibility to stakeholders ! Provide framework for accurate and timely issue

identification / prediction

" …in order to ! Reduce cycle time ! Get required capability to customer quicker, more

effectively, and within budget


1.  What Does DONE Look Like?

2.  What is the path to DONE?

3.  Do We Have Enough Time, Resources, And Money To Get To DONE?

4.  What Impediments Will We Encounter Along The Way To DONE?

5.  How Do We Know We Are Making Progress Toward DONE?

Five Immutable Principles Of All Successful Projects …


7

Apply Con)nuous Risk Management to each

Performance Based Management process area

Identify Needed Capabilities needed to

achieve the project objectives or the particular

end state for a specific scenario.

Elicit Technical & Operational Requirements needed for the system capabilities to be fulfilled.

Establish Performance Measurement Baseline time–phased network of work activities describing the work to be performed

Execute Performance Measurement Baseline

activities while assuring technical performance is met

# $

% &

'


The Structure Of This Briefing

"  For each of the 5 Principles and 5 Practices there is tangible evidence that the principles are being applied according to the practice.

"  The next page shows how the principles and practices are evidenced through these documents.

"  The following page shows the Numbers of the top level documents, 1 through 23.

"  Each document or series of documents is then described with a Numbered pages, 1 through 23.

8


5 Immutable Principles

5 Practices of Performance-Based Project Management®

Identify Needed

Capabilities

Establish Requirements

Baseline

Performance Measurement Baseline (PMB)

Execute the PMB

Continuous Risk

Management

Where are we going?

ConOps, SOO, SOW

Technical and Operational Based Plan

Incremental Maturity Measures

Physical Percent

Complete Risk

Identification

How are we going to get

there? Integrated Master Plan

(IMP)

Work Breakdown Structure Integrated

Master Schedule (IMS)

Iterative and Incremental

Delivery Risk

Analysis

What do we need along the way?

Resource Management

Plan

Future Performance Forecasting

Risk Planning

What impediments

will we encounter along the

way?

4 Levels of Uncertainty:

1) Variance, 2) Foreseen, 3) Unforeseen, 4) Chaos

Technical and Programmatic Risk handling

assigned to all WBS

deliverables

Risk adjustments to

cost and schedule measures

Risk adjusted Performance Measurement

Baseline

Risk Tracking

How do we measure progress?

Measures of Effectiveness

(MoE)

Measures of Performance

(MoP)

Technical Performance

Measures (TPM)

Earned Value Management

(EVM) Risk

Control


5 Practices of Program Success

Identify Needed

Capabilities


Baseline


Execute the PMB

Continuous Risk

Management

Where are we going? 1 5 10 14 19


there? 2

6 11

15 20 What do we need along the way?

7 16 21 What

impediments will we

encounter? 3 8 12 17 22


4 9 13 18 23

Identify Needed Capabilities “Planning, under uncertainty, to provide capabilities suitable for a wide range of modern-day challenges and circumstances while working within an economic framework that necessitates choice.”

By Identifying system capabilities, the elicited technical and operational requirements can be traced from the Measures of Effectiveness (MOE) to each deliverable in the Integrated Master Plan and Schedule. Capabilities state the “why” of the system.




Identify Needed

Capabilities


Baseline


Execute the PMB

Continuous Risk

Management

Where are we going?

ConOps, SOO, SOW



Physical Percent

Complete

Risk Identification



(IMP)




Delivery

Risk Analysis


Resource Management

Plan


Risk Planning

What impediments


way?

4 Levels of Uncertainty Assessment


assigned to all WBS

deliverables

Risk adjustments to



Baseline

Risk Tracking



(MoE)


(MoP)


Measures


Risk Control

! Partition system capabilities into classes of service within operational scenarios ! Connect capabilities to system requirements using sysML ! Define Measures of Effectiveness (MoE) from the customer point of view ! Define in the delivery schedule the achievement of each Technical Performance Measure

! Define scenarios for each system capability ! Connect these scenarios to a Value Stream Map of the increasing maturity of the program ! Assess value flow through the map for each needed capability ! Identify capabilities mismatches and make corrections to improve overall value flow

! Assign costs to a system element using a value model process model ! Assure risk, probabilistic cost and benefit performance attributes are defined ! Use cost, schedule and technical performance probabilistic models to forecast

potential risks to program performance

! Make tradeoffs that connect cost, schedule, and technical performance in a single “trade space” model

! Measures of Effectiveness and Measures of Performance are the raw materials for these tradeoffs

Define the set of capabilities to be employed to achieve desired objectives or a particular end state for a specific scenario. Take the ConOps and define the details of who, where, and how it is to be accomplished, employed and executed.

1.0

1.1

1.2

1.3

1.4

Chapter IV 13 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

What Should We Do?

Where Are We Now?

Identifying Needed System Capabilities

Abstracted from: “Capabilities‒Based Planning – How It Is Intended To Work And Challenges To Its Successful Implementation,” Col. Stephen K. Walker, United States Army, U. S. Army War College, March 2005


I

Concept of Operations, Statement of Objectives, and Statement of Work

"  The Concept of Operations (ConOps) tells us why we are doing the project and what we are going to do with the products or services that result from the project.

"  The ConOps tells the stories of these products and services using scenarios or use cases.

"  Theses stories describe the outcomes in terms meaningful to the recipients of the outcomes from the project.

1


Integrated Master Plan (IMP)

"  The IMP is an event-based plan of a hierarchy of program events, with each event being supported by specific Specific Accomplishments, and each Accomplishment Criteria associated with specific criteria to be satisfied for its completion.

"  The IMP defines the flow of increasing maturity of major deliverables through Significant Accomplishments and Accomplishment Criteria of the Work Packages producing the products or services of the project.

2


! Authorize each Work Package to start work for the planned period of performance.

! Using Work Packages sequences, measures of performance for each work package established – physical percent complete defined in units of measure meaningful to the customer

! Deliverables from each Work Package comple)on assessed against the target Technical Performance Measure.

! Measure other performance metrics – Late Starts, Late Finished, Margin Erosion, near cri)cal path dependencies, and resource u)liza)on.

! Adjustments made to Earned Value from the TPM assessments.

Events / Milestones define the availability of a capability at this point in the schedule

Accomplishments define the entry conditions for each Event or Milestone

Criteria are the exit conditions for each Work Package

Work Package

Work Package

Work Package

Work Package

Work Package

Work Package

Work Package

Work package

2 Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012

2


Two Types of Complexity

"  Task Complexity – the number of interacting and mutually dependent components of the project. ! Coordination is the key challenge in task complexity. !  Identifying, sequencing, allocating resources, ensuring

deviations from the critical path are corrected, and achieving project goals within schedule, budget, and design boundaries.

" Relational Complexity – Conflicting interests lead to disagreements about project goals and about priorities among tasks and features of the project outcome.

3

† “Uncertainty and Project Management: Beyond the Critical Path,” de Meyer, Loch, and Pich, INSEAD Working Paper, 2001 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

4 Levels of Uncertainty†

" Variational Uncertainty – from many small influences yields a range of values on a particular activity.

"  Foreseen Uncertainty – are identifiable and understood influences that the team cannot be sure will occur.

" Unforeseen Uncertainty – can’t be identified during project planning. There is no Plan B.

" Chaos – the basic structure of the project plan is uncertain, as is the case when technology is in upheaval or when research, not development, is the main goal.

3

† “Managing Project Uncertainty: From Variation to Chaos,” de Meyer, Loch, and Pich, MIT Sloan Management Review, Winter, 2002 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

Measures of Effectiveness (MoE)

Measures of Effectiveness … " Are stated in units meaningful to the buyer, "  Focus on capabilities independent of any technical

implementation, " Are connected to the mission success.

4


Define Technical and Operational Requirements

Baselined requirements are the basis of Work Packages and Planning Packages and the work efforts needed to produce the deliverables from these Packages.

These deliverables fulfill the technical and operational requirements needed to deliver the system Capabilities.

Tracing Capabilities to Requirements assures each requirement has a “home” in the system.




Identify Needed

Capabilities


Baseline


Execute the PMB

Continuous Risk

Management

Where are we going?

ConOps, SOO, SOW



Physical Percent

Complete

Risk Identification



(IMP)

Work Breakdown

Structure Integrated Master

Schedule (IMS)


Delivery

Risk Analysis


Resource Management

Plan


Risk Planning

What impediments


way?


Technical and Programmatic Risk Handling assigned to

all WBS deliverables

Risk adjustments to



Baseline

Risk Tracking



(MoE)


(MoP)


Measures


Risk Control

Define the technical and operational requirements that must be in place for the system capabilities to be fulfilled. Define these requirements in terms isolated from any implementation.

2.0

! Produce an overall statement of the problem in an operational context. ! Develop the overall operational and technical objectives of the target system. ! Defined the boundaries and interfaces of the target system.

2.1

! Gather required system capabilities, functional, nonfunctional and environmental requirements, and design constraints.

! Build a Top Down Capabilities and Functional decomposition of the requirements in a flow down tree using a Requirements Management System.

2.2

! Answer the question “why do I need this?” in terms of operational benefits. ! Build a cost benefit / model using probabilistic assessment of all variables and

dependencies. ! For technical requirements, perform a risk assessment to cost and schedule.

2.3

! Determine criticality for the functions for the system mission. ! Determine trade off relationships for all requirements to be used when option decisions

are made. ! For technical items prioritize on cost and dependency.

2.4

! Address completeness of requirements by removing all “TBD” items. ! Validate the requirements agree and are traceable to system capabilities, goals, and

mission. ! Resolve any requirements inconsistencies and conflicts.

2.5

Chapter V 23 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

Identifying Requirements†

†Systems Requirements Practices, Jeffery O. Grady, McGraw Hill, 1993 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

II


"  The Value Stream is the sequence of deliverables needed to produce the technical and operational outcomes of the project.

"  For each deliverable, an assessment of risk, cost, and schedule to the successful delivery of the planned value.

" Value of each deliverable measures in units meaningful to the buyer of that value.

5


Work Breakdown Structure (WBS)

"  The WBS provides a framework for describing program objectives. Each WBS element provides logical summary levels for assessing technical accomplishments, for supporting the required event-based technical reviews, and for measuring cost and schedule performance.

"  The WBS defines the program in terms of hierarchically-related, product-oriented elements.

"  The WBS is defined, developed, and maintained throughout the system life cycle based on a disciplined application of a systems engineering process.

6


Resource Management Plan

"  Identifies all of the resources required to complete the project successfully.

" Starts with the Work Breakdown Structure, add cost and period of performance elements to each level of the WBS.

" Defines resource categories, types, or other distinguishing attributes needed to identify resources for the project.

"  This plan used to verify project has all the needed resources to successfully deliver the planned outcomes.

7


Risks Assigned to Deliverables

"  Each attribute of each deliverable and the work needed to produce the deliverable needs a risk adjusted value.

"  Each risk has a probability of occurrence, cost impact if not handled, cost to handle, residual probability after handling, and residual cost.

"  The risk registry records this information as well as the period of exposure, the handling period, and the period remaining after handling is complete.

8


Risk Handling Assigned to Deliverables

"  Capture all risk information in a Risk Management Tool, to be connected to the Integrated Master Schedule.

8


Measures of Performance (MoP)

Measures of Performance are … " Attributes that assure the system has the capability

to perform, " Assessment of the system to assure it meets design

requirements to satisfy the MoE.

9


Establish the Performance Measurement Baseline

The Performance Measurement Baseline (PMB) assesses progress to plan through measures of physical percent complete.

Starting at the Work Package level, a pre–defined performance measure is established.

During the performance period assessment of “progress to plan” produces measures of Physical Percent Complete




Identify Needed

Capabilities


Baseline


Execute the PMB

Continuous Risk

Management

Where are we going?

ConOps, SOO, SOW



Physical Percent

Complete

Risk Identification



(IMP)

Work Breakdown Structure

Integrated Master

Schedule (IMS)


Delivery

Risk Analysis


Resource Management

Plan


Risk Planning

What impediments


way?



assigned to all WBS

deliverables

Risk adjusted cost and schedule measures


Baseline

Risk Tracking



(MoE)


(MoP)


Measures


Risk Control

Build a time–phased network of schedule activities describing the work to be performed, the budgeted cost for this work, the organizational elements that produce the deliverables, and the performance measures showing this work is proceeding according to plan.

3.0

Decompose the Project Scope into a product based Work Breakdown Structure (WBS), then further into Work Packages describing the production of all deliverables traceable to the requirements

3.1

Assign Responsibility to Work Packages (the groupings of deliverables) for the named owner accountable for the management of resource allocation and cost baseline and technical delivery

3.2

Arrange the Work Packages in a well formed network with defined deliverables, milestones, internal and external dependencies, appropriate schedule and cost margin.

3.3

Develop a Time–Phased Budgeted Cost for Work Scheduled (BCWS) from labor and material costs in each Work Package and the Project as a whole. Assure proper resource allocations can be met and budget profiles match expectations of the program sponsor

3.4

Assign objective Measures of Performance (MOP) and Measures of Effectiveness (MOE) for each Work Package and summarize these for the Project as a whole

3.5

Establish a Performance Measurement Baseline (PMB) used to forecast Work Package and Project ongoing and completion cost and schedule metrics

3.6

Chapter VI 33 Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

Establishing the Three Elements of the Performance Measurement Baseline

Cost Baseline

Schedule Baseline

Technical Baseline

Determine Scope and Approach

Develop Technical

Logic

Develop Technical Baseline

Develop WBS

Define Activities

Estimate Time

Durations

Sequence Activities

Finalize Schedule

Identify Apportioned

Milestones

Determine Resource

Requirement

Prepare Cost

Estimate

Resource Load

Schedule

Finalize Apportioned

Milestones

Determine Funding

Constraints

Approve PMB

Perform Functional Analysis


III

Incremental Maturity Assessments

" Maturity measures are defined through their technical performance measures appropriate for the stage of the project. ! Target performance – throughput, speed, reliability ! Target physical characteristics – mass, size

"  Fidelity of a measure increases as the project moved from left to right. ! Broader bands early in the project, narrow bands as

the delivery date nears.

10


Integrated Master Schedule (IMS)

"  The Integrated Master Schedule (IMS) is an integrated schedule containing the networked, detailed tasks necessary to ensure successful program execution.

"  The IMS is vertically traceable to the Integrated Master Plan (IMP) (if applicable), the Contract Work Breakdown Structure (CWBS), and the Statement of Work (SOW).

"  The IMS shall be used to verify attainability of contract objectives, to evaluate progress toward meeting program objectives, and to integrate the program schedule activities with all related components.

11


Risk Adjusted Cost and Schedule

" Single point estimates of cost and duration are wrong without the underlying statistical variance.

" Cost risk is related to duration risk as well as inherent cost risk drivers. But these relationships are rarely linear and are always probabilistic in nature.

" All margin for cost and schedule must be derived from the model or some credible source.

" Management of this margin is embedded in the program controls processes.

12


Monte Carlo Risk analysis starts with a credible schedule and defines the probabilistic behavior of each activities and how it

drives the deliverables 12

The Risk+ tool sets the upper and lower bounds of the durations Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

It shows 40% chance of completely on or before 2/10/03, the target completion date.

Date: 2/25/2009 3:34:12 PMSamples: 300Unique ID: 30Name: Final Testing

Completion Std Deviation: 5.51d95% Confidence Interval: 0.62dEach bar represents 2d

Completion Date

Freq

uenc

y

Cum

ulat

ive

Prob

abilit

y

Tue 2/11/03Mon 1/20/03 Mon 3/3/03

0.1

0.2

0.30.4

0.5

0.60.7

0.8

0.91.0

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16 Completion Probability Table

Prob ProbDate Date0.05 Wed 1/29/030.10 Fri 1/31/030.15 Tue 2/4/030.20 Wed 2/5/030.25 Wed 2/5/030.30 Thu 2/6/030.35 Fri 2/7/030.40 Mon 2/10/030.45 Mon 2/10/030.50 Tue 2/11/03

0.55 Wed 2/12/030.60 Thu 2/13/030.65 Fri 2/14/030.70 Fri 2/14/030.75 Mon 2/17/030.80 Tue 2/18/030.85 Wed 2/19/030.90 Thu 2/20/030.95 Tue 2/25/031.00 Mon 3/3/03

12


Tie risk retirement to the Integrated Master Schedule

"  Each risk reduction activity must be defined in the IMS, showing dates of reduction and dependencies to produce this reduction in risk.

"  This integration provides credibility that risk is actually being managed.

12


Cost probability distributions change as a function of the weighted cost drivers 12

$

Cost Driver (Weight)

Cost = a + bXc

Cost Estimate

Historical data point

Cost estimating relationship

Standard percent error bounds Technical Uncertainty

Combined Cost Modeling and Technical Uncertainty

Cost Modeling Uncertainty


Managing margin from the Monte Carlo model means having Plan B not delay beyond Plan A 12

!  Plan the risk alternatives that “might” be needed !  Each mitigation has a Plan B

branch !  Keep alternatives as simple as

possible (maybe one task) !  Assess probability of the

alternative occurring

!  Assign duration and resource estimates to both branches

!  Turn off for alternative for a “success” path assessment

!  Turn off primary for a “failure” path assessment

30% Probabilityof failure

70% Probabilityof success

Plan B

Plan A Current Margin Future Margin

80% Confidence for completion with current margin

Duration of Plan B Plan A + Margin≤Performance-Based Project Management®, Copyright © Glen B. Alleman, 2012, 2013, 2014

Margin management means reusing margin on future work activities 12

! Programmatic Margin is added between Development, Production and Integration & Test phases

! Risk Margin is added to the IMS where risk alternatives are identified

! Margin that is not used in the IMS for risk mitigation will be moved to the next sequence of risk alternatives – This enables us to buy back schedule

margin for activities further downstream

– This enables us to control the ripple effect of schedule shifts on Margin activities

5 Days Margin

5 Days Margin

Plan B

Plan A

Plan B

Plan AFirst Identified Risk Alternative in IMS

Second Identified Risk Alternative in IMS

3 Days Margin Used

Downstream Activities shifted to

left 2 days

Duration of Plan B < Plan A + Margin

2 days will be added to this margin task to bring schedule back on track


Technical Performance Measures (TPM)

Technical Performance Measures … " Assess increasing maturity of the design progress " Define compliance to performance requirements "  Identify technical risks and their handling strategies " Are limited to critical thresholds for program success "  Include projected performance adherence within these

critical thresholds

13


Technical Performance Measures (TPM) 13

Variance

Planned Value

Planned Profile Current Es)mate

Milestones

Threshold

Upper Limit

Lower Limit

Mean To

Between Failure

Time = Program Maturity

Achieved to Date

TPM


Execute the Performance Measurement Baseline

Using the Performance Measurement Baseline (PMB), each Work Package must start as planned, complete on or near the planned date, and produce the planned technical performance.

This is the key to success for any credible Performance Base Management plan.

In the absence of this, the program is behind schedule, over budget, and non–compliant with the technical goals.




Identify Needed

Capabilities


Baseline


Execute the PMB

Continuous Risk

Management

Where are we going?

ConOps, SOO, SOW



Physical Percent

Complete

Risk Identification



(IMP)




Delivery

Risk Analysis


Resource Management

Plan


Risk Planning

What impediments


way?



assigned to all WBS

deliverables

Risk adjustments to



Baseline

Risk Tracking



(MoE)


(MoP)


Measures


Risk Control

Execute the Performance Measurement Baseline (PMB)


IV

Physical Percent Complete

" Physical Percent Complete means tangible evidence of progress to plan.

"  This evidence is defined before the work starts in units of measure meaningful to the decision makers. ! Number of units ! A Technical Performance Measure ! A compliance with specification, within error bands ! 0%/100% means defining what 100% means upfront

14


Iterative and Incremental Delivery

" Answer the question how long are you willing to wait before you find out you’re late?

"  The primary role of iterative and incremental delivery is to provide sufficient time to correct any deficiencies in the deliverables before they show up late.

" Other advantages exist ! Feedback from users for technical improvement ! Adaptive requirements ! Rapid deployment of incremental usability

15



" Using past performance and probabilistic modeling produce a forecast of future performance of cost, schedule, and technical performance.

" All forecasting is based on probabilistic confidence intervals for the project’s variables.

"  These probabilistic estimates are driven by the underlying statistical processes of cost, schedule, and technical performance.

16


Risk Adjusted PMB

" All numbers in the Performance Measurement Baseline (PMB) are drawn from an underlying probability distribution.

" Making adjustments for the probabilistic nature of cost, schedule, and technical performance is mandated by good management practices.

" Monte Carlo Simulation of cost, schedule, and performance provides insight into the Probability of Program Success (PoPS).

17



" Assign a Planned Value (PV)(BCWS) to each element of work for all costs associated with developing the outcomes.

" Measure physical percent complete to calculate the Earned Value (EV)(BCWP) for that outcome at the planned time of completion.

" Record the Actual Cost (AC)(ACWP) to perform the work that produced the Earned Value.

" Calculate the Earned Value metrics needed to make management decisions.

18


Perform Continuous Risk Management

This section is extracted from the Software Engineering Institute’s Continuous Risk Management (CRM) Guidebook. The CRM describes the underlying principles, concepts, and functions of risk management and provides guidance on how to implement it as a continuous practice in projects and organizations.




Identify Needed

Capabilities

Define Requirements

Baseline


Execute the PMB

Continuous Risk

Management

Where are we going?

ConOps, SOO, SOW



Physical Percent

Complete

Risk Identification



(IMP)




Delivery

Risk Analysis


Resource Management

Plan


Risk Planning

What impediments


way?



assigned to all WBS

deliverables

Risk adjustments to



Baseline

Risk Tracking



(MoE)


(MoP)


Measures


Risk Control

Perform Continuous Risk Management


V

Risk Identification

"  Transform uncertainties and issues about the program into distinct and tangible risks that can be described, assessed, and measured.

"  Identify risks associated with technical and programmatic attributes of each deliverable and the associated processes.

"  Two activities are involved in risk identification: ! Capture a statement of risk. ! Capturing the context of the risk.

19


A Well Written Risk Statement

"  A well-written risk statement contains three components: !  Cause – The negative conditions that currently exist relative

to the risk (  Identification of root cause(s) of the risk (  This provides justification that a risk exists

!  Probability of Occurrence – The likelihood of the occurrence of the risk (  Within a future time frame (  Or a future event

!  Consequence – The effect(s), negative impact(s) to the program(s) in case the risk occurs (  The consequence should be related to at least cost, schedule,

scope and performance (  Consequence could also result in opportunities that may surface in

correcting the problems

19


Risk Analysis

" Determine probability of occurrence and cost exposure.

"  Examine risks in detail to determine the extent of the risks and how they relate to each other.

" Determine which risks are important. " Analyzing risks has three activities: evaluate

attributes of the risk, classify the risk, and rank the risk.

20


Risk Planning

" Make sure the consequences and sources (root cause) of risks are known.

" Develop effective risk plans to address not just the risk, but the root cause.

" Plan efficiently to handle the risk. " Produce the correct set of actions that minimize risk

and impacts. ! Buy down the risk – retirement plan ! Remove the root cause

21


Risk Tracking

" Collect accurate, timely, and relevant risk information.

" Present this information in a clear and easily understood manner appropriate to the groups receiving the status report.

22


Risk Control

" Correct for deviations from the risk handling plans. " Update probability of occurrence, impact, and

residual probability from the handling outcomes. " Reassess risk ranking and handling plans after

corrections have occurred.

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Principles and Practices of Performance-Based Project Management®

Technology

Transcript of Principles and Practices of Performance-Based Project Management®