Risk Management or Do I Feel Lucky?

Jack J. Ference, PMP®, PMI-RMP®

Jack.ference@dot.gov

PMI Baltimore Luncheon Meeting Columbia, MD

2October 26, 2009

Presentation Outline• Project Introduction and Background • Risk Management Process

– Risk Management Planning– Risk Identification– Risk Analysis

• Results from Process• Benefits and Lessons Learned• Questions

PMI Baltimore Luncheon Meeting Columbia, MD

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What this Project is About

Photo clips from abcNews.com

PMI Baltimore Luncheon Meeting Columbia, MD

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Project Challenges• “Low to Moderate” risk project• Basic type of work had been done before,

however, challenges included:– Completing project in four-year timeframe– Executing two concurrent field tests – Agreement upon system requirements/tests– Integration/testing of three standalone functions– Development of new capabilities– Collecting driving data in “down” economy – Varied project management culture within team

PMI Baltimore Luncheon Meeting Columbia, MD

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Project Timeline

Nov 2005 Nov 2006 Nov 2008 May 2010June 2008 Feb 2009

EngineeringDevelopment

Vehicles

Prototype Vehicles

Pilot Vehicles

Extended Pilot Test

FOTData

Collection

Phase II – 24 monthsPhase I – 30 months

Project Information

Five-year Cooperative Agreement (80%-20%)

“Best-efforts” cost reimbursable agreement

Federal Funds $25.6M – Private Funds $7.4M

Other Federal Partners – $7.9M Support Staff – $1.9M

Phase I – $28.3M Phase II – $14.5M

PMI Baltimore Luncheon Meeting Columbia, MD

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Risk Management Process

Plan Risk Management

Identify Risks

Perform Risk Analysis

Plan Risk Responses

Monitor and Control Risks

PMI Baltimore Luncheon Meeting Columbia, MD

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Risk Management Planning• Deciding your approach – how formal?• Scaling effort to meet project needs/budget• Showing value of process and obtaining buy-in • Acknowledging training needs• Writing, communicating and following the plan

– Developing probability and impact definitions– Writing actionable risk statements– Selecting tools and processes– All needed to ensure consistency

• Following up, making adjustments, repeating processes

PMI Baltimore Luncheon Meeting Columbia, MD

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Probability and Impact Matrix

PMI Baltimore Luncheon Meeting Columbia, MD

9October 26, 2009

Risk Identification• Phase II statement of work, schedule and

project budget• Phase I and past experience• Tools and Techniques

– Adobe® Acrobat fill-able Form/Workshop – Risk Breakdown Structure– Project-specific checklist– Interviewing

PMI Baltimore Luncheon Meeting Columbia, MD

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Risk Identification Worksheet

PMI Baltimore Luncheon Meeting Columbia, MD

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Risk Register – Part I

PMI Baltimore Luncheon Meeting Columbia, MD

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Risk Rating Form

PMI Baltimore Luncheon Meeting Columbia, MD

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Consensus Risk Rating

Name Prob Impact Matrix Pos RiskReviewer 1 1 2 2 LOWReviewer 2 3 3 13 MEDReviewer 3 2 3 8 LOWReviewer 4 2 4 9 MEDReviewer 5 2 3 8 LOWReviewer 6 2 2 7 LOWReviewer 7 1 2 2 LOWReviewer 8 2 2 7 LOWReviewer 9 2 3 8 LOWReviewer 10 0 NRReviewer 11 0 NRReviewer 12 0 NRReviewer 13 2 3 8 LOWReviewer 14 0 NR

Mean 1.9 2.7 7 LOW

Risk Level Consensus LOW

Risk # 069

IF prototype vehicles are not produced to specifications in time for the EPT, THEN the EPT will be delayed or compromised.

PMI Baltimore Luncheon Meeting Columbia, MD

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Risk Register – Part II

PMI Baltimore Luncheon Meeting Columbia, MD

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Risk Response Worksheet

PMI Baltimore Luncheon Meeting Columbia, MD

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Risk Radar®

PMI Baltimore Luncheon Meeting Columbia, MD

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Individual Risk Summary

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Risk Radar® Reports

9 8 8

37 36 3639

339

83 85 85 89 9142

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Oct '08 Nov '08 Dec '08 Jan '09 Feb '09 Mar '09

High Medium Low

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Risk Radar® Reports cont’d

PMI Baltimore Luncheon Meeting Columbia, MD

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Results from Process• Risks avoided

– Impact of model year change – Oct 2006• Identified risks realized

– High false alarm rate for heavy truck platform – Oct 2007– Impact of economy on conducting field test – Nov 2008-present

• Unidentified risks realized– Truck manufacturer leaves project – Aug 2007– Test track closes abruptly – Nov 2007– Phase II approval delayed – Dec 2007 (unknown-unknown)– Lead S/W engineer detained in China – Dec 2007– Vehicle build cost over-run and schedule delay – Feb 2009– Lead IT developer becomes ill while in India – Mar-Apr 2009– Software development cost over-run – Apr 2009– Supplier/Developer in Chapter 11 bankruptcy – May 2009

PMI Baltimore Luncheon Meeting Columbia, MD

21October 26, 2009

Benefits of Formal Process• Improved project focus and team

communications and coordination• Provided framework for discussing project

issues with emphasis on problem solving• Brought the whole team together, creating

a broader view of the project• Discussion of risk became a regular part of

program reviews

PMI Baltimore Luncheon Meeting Columbia, MD

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Lessons Learned• To improve chance of success, risk management

effort needs:– A “Process Owner”, team buy-in and cooperation– To be scaled to project needs, not be a burden– Consistent, open and honest process that is repeated

• Tendency to use past experience to judge risk and overlook associated new risks:– Vehicle build (cost over-run, schedule delay)– Database development delays affected other efforts– Data synchronization issues impacted test schedule

PMI Baltimore Luncheon Meeting Columbia, MD

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Resources1. MITRE Risk Management website:

http://www.mitre.org/work/sepo/toolkits/risk/2. Mulcahy, R. P. Risk Management - Tricks of the Trade for Project

Managers, Minneapolis, MN: RMC Publications, Inc., (2003). 3. Pritchard, Carl L. Risk Management Concepts and Guidance.

3rd Edition. Arlington, VA: ESI International, (2005).4. Survey Monkey® website: http://www.surveymonkey.com5. Risk Radar® website: http://www.AmericanSystems.com

Email: RiskRadar@AmericanSystems.com Phone: (757) 424-3711, ext. 310; H. Duncan Wynne

6. Defense Acquisition University: https://acc.dau.mil/rm7. Guide to the Project Management Body of Knowledge (PMBOK).

Fourth Edition. Newton Square, PA: Project Management Institute, (2009)

8. Practice Standard for Project Risk Management. Newton Square, PA: Project Management Institute, (2009)

9. The Risk Doctor website: http://www.risk-doctor.com/

PMI Baltimore Luncheon Meeting Columbia, MD

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Questions?

Jack J. Ference, PMP®, PMI-RMP®

U.S. DOT/National Highway Traffic Safety AdministrationAdvanced Vehicle Safety Research

Intelligent Technologies Research Division

1200 New Jersey Avenue, SE, W46-447

Washington, DC 20590

(202) 366-0168

Jack.ference@dot.gov