Topic 1 - Risk Project Management

7/26/2019 Topic 1 - Risk Project Management

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Project Management Tool

Practical way to integrate risk into project

planning and control and there are project

tools that effectively support risk

management.

Once risks are identified as business risks,

risk assessment and management are

integrated into the project planningprocess.


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ustomer !e"uirement

!e"uirements are customer#driven and so

are risks

The ! document is the project manager$s

definition of customer re"uirements,

developed from information gleaned from

the customer.

The re"uirements document addresses thecustomer$s business setting and needs and

e%pectations for a project solution.


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&ork 'reakdown (tructure

First level: The Deliverable

) defining the work necessary to produce the

deliverable is to complete a work breakdown

structure *&'(+ from the top *the deliverable+

down tothe third or fourth level of tasks.) t represents the final product or service

outcome of the project, performing tospecification and accepted by the sponsor,

client, andlor user.


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Second level: Summar Tasks -ive or si% basic chunks of high#level work that serve

as the basic components of the project#the summary

tasks which are integrated at the end of the project tocomplete the job.

) 'uilding project / architectural drawing, building supplies,

ventilation systems, water, and electrical systems.

) (oftware project / hardware platform, software, interfaces,

training program, and financing.

) 0ealth management system / clinic population, health

information system, medical personnel, space, and e"uipment.


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Third level: Subtasks 'reakdown of the summary tasks outlined above into

two or more subtasks, which would be necessary to

complete to produce the second level summary task.) i.e. building project, under the summary task architectural

drawing, this might include three tasks#get ad architect, prepare

preliminary blueprint, and check against standard blueprint

template.


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Fourth level: !ork Package 1etail at the real tasking level#the work package.

ndividual tasks assigned to team members.

The actual work assignments that will be necessary toschedule and the risks that the work will not make

schedule, cost, and2or "uality re"uirements.


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!isk Matri%

!isk matri%, the fundamental risk template thatcaptures the essential risk information in a

project.


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Steps in Preparing a Risk Matri"

(tep 3/ dentify tasks with risk.

(tep 4/ 1escribe risk.

(tep 5/ 1etermine impact.

(tep 6/ 7stimate chancelprobability of risk event.

(tep 8/ !ank risk by severity.

(tep 9/ dentify mot causes.

(tep :/ Prepare contingency plan.

(tep ;/ 7stimate schedule impacts uslng M( Project software.

(tep


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>etwork 1iagram

'uild a network diagram of this summary

task


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>etwork 1iagram

Start #ith a net#ork template$

)?lways start your network diagramming with a

template or model of the typical network,

and adjust it to the project you are planning.


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>etwork 1iagram

Project paths 3

# ?, , -, @, 0 A 9 B 8= B 58 B 5 B 5 A


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>etwork 1iagram

Tailored net#ork diagram$


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>etwork 1iagram

ndependent actvities)?n activity that doesnCt rely on others to start or to

finish

Predecessor actvities)?n activity that determines the start date or finish date

of a successor activity based on a logical relationship.

Time#based activity2duration)?ctivity that determined by the critical path of the

project


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>etwork 1iagram

ndependent actvities ) ?, '

Predecessor actvities ) ,1,7,-,@,0

Time#based activity2duration ) ?,,-,@,0


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>etwork 1iagram

%nalsis o& earl and late starts and slack

Project paths

?, , -, @, 0 A 9 B 8= B 58 B 5 B 5 A


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>etwork 1iagram

%nalsis o& earl and late starts and slack


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@annt hart

'ar chart representing the whole project

graphically, based on linkages and durations

This process, from initial re"uirement through

the @antt chart, is the core process of projectrisk management.

This is where risks are captured and identified,

as part of the project planning process.


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'usiness and project risk

Dey factors in the success or failure of any

project are the broad business factors for

success and failure and the process of

selecting the project in the first place.


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S!(T analsis: risk identi&ication

Strengths

) ts competencies and its core capabilities and

identifies its current performance advantage itsdifferentiators

!eaknesses

) The company looks at its weaknesses in terms of its

inability to overcome risk and uncertainty in past

initiatives and identifies internal improvements

that it must make to address them.


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(pportunities$

) Opportunity is the converse of riskE there is no

risk if there is not opportunity on the other side.

Threats$

) ompetition, technological change, economic

crisis, and financial difficulty, all constitute therisk factors that the business faces and thus

the risk factors that individual projects face


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!eighted scoring model$

) Fse the weighted scoring model to select

projects based on their relative scores against

strategic objectives,

) This process is evaluating contingency plans

to address risk inherent in various candidateproject plans, costs estimates, and cash flow

forecasts.


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)ustomer and )lient Risk

) lient risk management issues

) Project deliverable impacts

) Partnering in risk management


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Project and Risk Management Processes

) (electing the right projects

) The analysis of risk in project selection involves

three basic issues/

-inancial risk

(chedule risk

Guality risk


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Project Manager*s Roles

Headership

Motivation

Deeping risk manageable -acilitator2Manager


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!isk#based scheduling *P7!T+

alculating a risk#based schedule/ P7!T

analysis.

To use risk assessment and analysis

information to calculate a risk#based

project schedule in Microsoft Project.


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!isk#based scheduling

The risk#based schedule is calculated from

your original project schedule, but uses

your weighted estimates of three possible

task durations *e%pected, pessimistic, andoptimistic+ to come up with a new project

schedule.

The new schedule is calculated forindividual tasks and rolled up to the whole

project


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'asis for estimates

) nternal accounting records

) Project team knowledge

) 7stimating manuals and databases.

) onstruction

) (oftware development

) Hearning curves

) Parametric estimating


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Project ssues

) Poorly defined project scope

) Major omissions *overloooked+ in

taskdactivities

) Optimistic time2cost estimates


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Management !eserve

Project -inancial) ssues such as internal resources, commercial credit,

e"uity issues, venture capital, government

grantslsubsidies, and capital rationing govern theviability of the company itself and its capacity to

finance a project up front.

) To share risk, many companies are going to

earmarked venture funds for new product

developmen so that sponsorsI funds are bounded by

a project to avoid cross subsidy.


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Management !eserve

+nsurable risk

) !isk that is determined to be insurable on the

open market and which is not self funded.

) nsurance is a vehicle to share risk and to

outsource risk that has a high probability and

impact severity.


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Management !eserve

+denti&ication o& project risks$

) nternal

) Technical

) >ontechnical

) 7%ternal

) Predictable

) Fnpredictable) Hegal

) !isk event

Topic 1 - Risk Project Management

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