risk management
DESCRIPTION
Risk Management. Figure 4-4 Estimate of Project Cost: Estimate Made at Project Start. Risk Management. What is Risk? An uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives. PMI (project management institute). Risk Management. - PowerPoint PPT PresentationTRANSCRIPT
Risk Management
Figure 4-4 Estimate of Project Cost: Estimate Made at Project Start
Risk Management
What is Risk? An uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives.
PMI (project management institute)
Risk Management
Risk Analysis Risk analysis includes the estimating
its probability, evaluating its impact and preparing for solution in advance.
Project size/complexity vs. risk
Risk analysis is not free
Risk Management
Successful Risk ManagementSEI summaries successful risk management as follows A successful risk management practice is one
which risks are continuously identified and analyzed for relative importance.
Risks are mitigated, tracked, and controlled to effectively use program resources.
Problems are prevented before they occur and personnel consciously focus on what could affect product quality and schedules
Risk Management
Common Risk factors Lack of top management commitment to the
project Failure to gain user commitment Misunderstanding the requirement Lack of adequate user involvement Failure to manage end user expectation Changing scope and objectives Lack of required knowledge/skill in the project
personnel New technology Insufficient / inappropriate staffing Conflict between user departments
Risk Management
Anticipating Problems The first stage of risk analysis
requires a review of all project technical and administrative plans in order to identify potential problems. It includes: The project development plan The requirement specification The design specification External dependences Project support issues
Risk ManagementRisk Identification
Problem DescriptionLate delivery of the development computer
If the development computer is not delivered by DATE (e.g. 05/01/03) as planned , the integration phase will be delayed
Internet communication is slow
Information to be posted and download from the Internet site is too slow and cannot support the amount of data to be transmitted
No operating systems expert
The system requires changes to the standard operating system. Ben and Alyssa are the only Unix experts in the company and they will not be available for this project
High staff turnaround The schedule is tight with only minimal slack time. If there is more than average staff replacement during development, we will slip the schedule. Nadia and Effie already informed us that they are leaving the or the company.
Late delivery of the database system
The database subsystem is subcontracted to Software Development Inc (SDI), which has committed to delivery by August, 1. SDI may not deliver on time, thus delaying the final integration and test phase
Risk Management
Risk Analysis Evaluate each problem
Estimate the probability that the problem will occur
Estimate the impact of the problem on the project if occurred
Attribute a measure of severity to the problem
Risk Management
Measuring the severity for each anticipated problem
1. Assign an expectation number between 1-10 based on the probability that the problem will occur. 10 = high probability 1= low probability
2. Assign a number between 1 and 10 based on the impact of the problem on the project. 10 = high impact 1= low impact
3. Multiply the value produced in step 1 by the value produced in step 2 to produce the measure of the severity for the problem.
Risk Management
Problem Expectation Impact Severity
Late delivery of the development computer
6 5 30
Internet communication is slow
4 2 8
No operating systems expert
5 5 25
High staff turnaround 8 8 64
Late delivery of the database system
3 9 27
Risk ManagementRisk Analysis and contingency plan
Sort according to the severity of the problem Severity less than may not be considered Develop a contingency plan for each problem
Problem Severity
Contingency plan Tracker
High staff turnaround
64 Allocated big bonus for successful project completion. Hire new people
PM and Sponsor
Late delivery of the development computer
30 Make arrangement for alternative computer systems
Kelly
Late delivery of the database system
27 Design a database subsystem simulator to be used for integration.
David
No operating systems expert
25 Locate an OS expert outside the company, and hire a consultant
PM and Becky
Internet communication is slow
8 Not considered Jason if condition get worse.
Risk Management
Anticipating, Analyzing and Implementing Risk analysis
Project severity = expectation (1-10) * impact (1-10)
When should risk analysis be formed?
Problem Description Severity Contingency plan
Tracker
Risk Management
Implementing contingency plan Contingency plans are implemented
in one of the following instances The anticipated problem occurs, or
becomes imminent The contingency plan requires advance
preparation
Individual Assignment 20%
Using the Bigelow Inc. case study conduct a risk analysis for the top 10 risks. You may make any assumption, simply
state your assumptions.