5-Indentifying Project Resource Risks

The Primary Goal of Project Resource Risk Analysis is:

To Identify the portions of the Project where the Resources available may not be able to support the Foreseen Project Work. This is a probabilistic assertion.

The Concept of Resource

Take a wide perspective on the concept of <Resources>.

The riders on the resources are: Quality, Quantity, Timing. i.e. the resource should be in sufficient quantity, it should be of requisite quality and it should be available at the time needed

Examples of Resources

Among the resources most often discussed are:• Manpower• Information• Machinery, Equipment, Software, Components• Money• Time• Establishment (Physical and Organizational

Frameworks)• Services (Communication, Transportation, Legal)• Access to Consumables (Power, Fuel, Food, etc)

Benefits of Resource Planning

• Identifying Resource Risks

• Improving the Precision of the Schedule

• Building compelling evidence for negotiating budgets and schedules

• Focusing more attention on Project Estimates

The Need for Effort Investment for Achieving the Benefits

In order to achieve the enumerated Benefits, the PM is required to invest Effort, into Initial gathering of data, Feeding the data into the data base, and iteratively Updating the data to produce better and better Resource Plans. For each iteration “what if” type of analysis, should proceed to locate new constriction points.

Typical Effort Loading on Projects

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ffor

t

Time

Work

Historical Development of the Concept of Work.

Onset of Industry – Use of Machinery

Productivity of Man and Machinery

Time and Effort Studies (Taylor, Tavistock, Boehm [Lines of Code])

Most staff are productive for only 5-6 hrs/day

Scaling: Up-DownMeasurement: Absolute or Relative

Scaling: Not LinearScope, Duration, # of Deliverables, Complexity,

# of Contributors, # of Locations.

Productivity: Absolute and Relative.

(10:1); Staff names for activity (needed for preparing staff availability)

Manual Methods vs Use of Tools

For smaller Projects, manual collection, compilation, and manipulation of data to produce reports is sufficient.

For Larger Projects and in order to utilize details about the variables, one needs Computerized tools, such as: any Spreadsheet; MS Project; CA SuperProject, Autoplan, Project Scheduler, Primavera and Project Workbench

Outputs of Planning + Location of Risk Points

The outputs of the planning process are:Charts giving timelines for Activities, for Staff

and for the mobilization of other resources.On the Schedule initially outputted one

performs the “What if?” analysis, to discover the possible points in the Project Process where Resource Problems might arise.

Sources of Resource Risk

Resource Type Count

Cumulative Impact (weeks)

Average Impact (weeks)

1. People 45 194 4.3

2. Outsourcing 17 109 6.9

3. Money 2 58 29.0

Different Types of People Risks

• Staff leaving the Project PERMANENTLY• Staff leaving the Project TEMPORARILY• Staff joining the Project LATE• Queuing issues involving NON-DEDICATED

staff-----------------• Conflict between simultaneously on-going

similar projects.• Low motivation / Falling Morale

Different Types of OUTSOURCING Risks

• Late Delivery (hardware, software, components, machinery, sub-components)

[on account of queuing people or facilities]

• Violation of Specified Standards

• Protracted Negotiations – late Start on account of

• Turn over of Service or Product Supplier

Different Types of MONEY Risks

Causes of this type of Risk are:

• Change in Government

• Sudden Change in National Economic / Financial Policy

• Displeasure of International Funding Sources e.g. World Bank, USAid, etc.

This type of risk does not happen often, but when it does, the effects are drastic.

Resource Planning

The best way of avoiding problems is to Plan; so let us start with planning.

Some of the key inputs to the Resource planning process are:

1. WBS

2. Project Scope Definition

3. Activity Descriptions

4. Preliminary Duration Analysis

5. Project Preliminary Schedule

6. Assumptions about the Project

Resource Planning: Basics

1. Identify (by name) staff for each Activity.Classify as RISK any project staff that cannot be named

2. Identify all holidays, Scheduled time-off for each member, significant non-project meetings for each member

3. Identify any Scheduling differences for different regions

4. Identify all non-dedicated staff. Classify their activities as potential risk.

Compare the Project Effort Profile with the Performa Effort Profile

• Draw the Effort Profile for your Project and Compare it with the “Typical Effort Profile”, shown in Slide 6.

• Gross difference between the two are probably a result of Omissions or Errors in your plan.

• The Period of Project “RAMPING” should be used for:– Staff Development– Infrastructure Upgrade

Skills Need and Skills Available the Skill-GAP

From the Project Scope Definition, the WBS, the Activity Lists, etc. Determine the Skills NEEDED (quality, quantity, timing) by the Project.

From the Staff Available determine the degree to which there is a match between the skills-set needed and skills-set available. This is the SKILLS-GAP.

Note: Unique Skills is a Risky item; on account of Queuing, illness, resignation, injury or reassignment

Strategies to overcome the Skills Gap

There are two strategies for dealing with the Skills-Gap

1. Acquisition of Skills through RECRUITING / TRAINING / MENTORING / OURSOURCING

2. Alternate Planning – reducing or avoiding the skills not possessed

Note: Recruiting is a RISKY strategy, for one does not know the SKILL level of the person.

A Reminder

Resource Planning relies on Activity Estimation. As the Staffing Plan develops, additional resource risks become apparent through review of the assumptions used in the estimating.

Project Resource Risks are usually severe for Activities that are on the Critical (or Near Critical) Path. Reviewing the Effort Estimates for these and other activities reveals Resource Risks related with Staff Ability, Staff Availability, and Work Environment

Individual Productivity and Organizational Effect

Competent Staff are promoted (to PM for the next Project). This leads to a situation of possible conflict.

Will the work have to be done by those less competent? Will the PM have to pitch-in to do the work (of the less able colleague) and abscond from his/her own work. PMs who do that are a RISK TO THE PROJECT.

Quality of Project Estimates: Staff Availability

• Queuing

• Multiple Project

Changes in Productivity when working on Multiple Projects

70%

80%

60% 45

% 30%

# of Projects 1 2 3 4 5

Thus an Engineer working 50 hours on 5 Projects will be able to put in 3 hours on each project.

Quality of Project Estimates: Project Environment

Working Facilities:

• Printer, Copier, Computer Connectivity, Conference / Discussion facilities

• Work-friendly and Ergonomic Considerations

air / light / heat / cold / humidity /

office-furniture / Personal-space.

1

Multi-centre Projects: Elevated Risk

Experts in Team Building discuss four phases: Forming, Storming, Norming and Performing. Industrial Psychologists suggest the TRUST is built through face-to-face meetings. In Multi-centre Projects where most communications are through tele-equipment creating a team spirit is a challenge. Multi-Centre Projects have elevated risk.

Not-Dedicated Worker: Raised Risk

Members of a Project working on simultaneously on other Project(s) Raise the Risk Level for the Project.

The total devotion (importance and urgency) of these people to THIS project is missing – they might have a lower Priority for this Project.

Procurement Planning - 1

The Steps in the PROCUREMENT Process are:

1. Procurement Planning

2. Solicitation Planning

3. Solicitation

4. Source Selection

5. Contract Administration

6. Contract Closeout

Procurement Planning - 2

The process starts by delineating the requirements of the project that may not be met internally.

Procurement Planning involves investigation of possible options and requires a “make or buy” decision.

From the Project Perspective giving work to outsiders is a Risk. It can also beget higher cost; potential loss of confidential information; potential loss of core skills; drop in confidence of internal staff.

Procurement Planning - 3

Solicitation Planning starts with development of RFP

Use of Standard (Tested) Form is recommended, for the latter steps of ASSEMBLING, DISTRIBUTING, ANALYSING the responses received is often done by others than the Project Team.

Appoint a team member to participate in contracting for outside services and answers queries.

Procurement Planning - 4

RFP should be unambiguous in the definition of the Scope; in the Terms and Conditions for Evaluation and of Payment.

Each Deliverable must be scrupulously defined.

RFP must also establish the criteria to be used for evaluating the responses received.

Note: As RFP evaluation criteria must be frequently adjusted, adjust the acceptance criteria before sending the RFP.

Procurement Planning - 5

The responders should be asked to provide information on any similar work they have done.

The responders should be asked to provide References.

Before Finalizing the RFP, determine if any bidder conference or meetings will be scheduled and to whom the bidders should address questions and queries or other feedback.

Procurement Planning - 6 Solicitation - 1

Effort should be made to ensure that the RFP reaches every organisation likely to be in a position to respond. [known suppliers list; organisations own Web site; newspapers; etc.]

Clarification sought should be shared with all potential responders.

The best responders are those who provide insightful feedback – ask about things which should have been in the RFP but were missed.

Procurement Planning - 7 Solicitation - 2

Source Selection – is a source of Risk

Decision Making – Decision on Selection should be based solely on Merit: the ability of the responders to fulfill the obligation (quality, quantity, timing) [Not politically]

Once the Selection is made, the power begins to shift from the purchaser to the supplier

Procurement Planning - 8 Solicitation - 3

Negotiation – Discuss and define:• Gain mutual understanding of Scope of Work totally

unambiguously • Tests, Inspections, Prototypes and other interim

deliverables.• Partial and Final payments • The transaction Process• Cost of changes and procedure for change• Handling of breakdown (supplier non-performance)

Procurement Planning - 9Solicitation - 4

Contracting – Writing of the Contract:Use standard (tested) pre-printed contract

format, with appropriate changes. Higher approval is easier with standard forms

Protect confidential informationInsert what tests will be used and who will

perform them.Use limiting terms like: <not to exceed>; <time

is of essence> to make the contract enforceable.