1 Insuring Project Success by Knowing What Questions to Ask and Where to Get the Answers ® Donna Dufner, PhD, MBA, MS, PMP University of Nebraska at Omaha.

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Insuring Project Success by Knowing What Questions to Ask and Where to Get the Answers

® Donna Dufner, PhD, MBA, MS, PMPUniversity of Nebraska at Omaha

The Peter Kiewit InstituteCollege of Information Science &Technology

Information Systems and Quantitative AnalysisOmaha, Nebraska, USA

[email protected] or [email protected]

November 2, 2007

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How can we insure project success?

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Use the Best Project Management Tools and

Resources

Project Management Institute Body of Knowledge (http://www.PMI.org) Provides a project management structure

for managing and controlling a project IEEE Standards (http://www.IEEE.org)

Provides best practices and how to perform them.

Experience (lessons learned)

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Plan Using the Project Management Knowledge Areas

Project Management Integration Project Scope Management Project Time Management Project Cost Management Project Quality Management Project Human Resource Management Project Communications Management Project Risk Management Project Procurement Management

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Use a Structure for Managing the Project e.g., Project Management Lifecycle

Initiation – Project Charter and Funding Planning – knowledge area plans Executing – performing the work of the project

Building the product of the project Monitoring and Control

Looking for variances Closing

Closing accounts Accepting no further charges to the project

accounts

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Short Comings of all PM Methods Estimates are based on historical

information Variances based on tracking project

actual costs and schedule against estimates are based on historical information (reactive)-not accurate

Earned Value Analysis is the main tool for forecasting project costs and schedule (proactive)- greater accuracy

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Main Reasons Projects Fail or are Challenged

Miscommunication Subject matter misinformation Overlooking important

stakeholders Deficient risk analysis

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The first three reasons for failure have to do with stakeholders

Identification Communication Subject Matter Expertise

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Management of project stakeholders.

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Be sure to identify all of the stakeholders

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How does one identify all of the project stakeholders?

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How does one manage stakeholders?

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How does one keep the stakeholders interested and involved?

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How can the quality of communication and level of trust among stakeholders be maintained or improved?

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Managing Project Risk

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How does one manage project risk?

Identify risks Use the stakeholder expertise Look for anything that can impact the

achievement of project goals Look for risk triggers

Identify opportunities Ask experts

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Characteristics of risks

Risks are not linear Risks are both challenges and

opportunities. Risks are time dependent. Risks interact. Risk interaction is not linear in

impact. Risks may reoccur.

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Identifying Risks from Triggers

Where do project constraints fit into risk analysis?

What are risk triggers? Feasibilities of task estimates,

resource availability, slack time, etc.

Large deliverables.

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Calculating Risk Impact Is Problematic

Probabilities are subjective. Probability of occurrence multiplied

by the expected impact for a task, for a path in the precedence network, for the project.

This does not work for interacting risks.

Identify bottle necks.

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Why didn’t you know your project was challenged?

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Some tips that your project is in trouble. Scope Creep Triggers The project plan has not been

baselined. The project end date has changed. Tasks have been added or deleted

from the schedule. Estimated effort has changed.

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Responding to Risks: Project compression

Types of compression Crashing Fast-tracking

Adds more risk to the project. Adds more cost to the project. Compression must be evaluated

for costs and risks.

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To Insure Project Success Plan, plan, plan Incremental development with prototyping Implement a change control process and

make sure everyone uses it. Meet regularly for project review Assign action items to everyone Baseline the project Use Best Practices (IEEE and PMI) Use experts

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The Critical Path

Is the longest path through the project network.

Is not necessarily the riskiest path. There are probably going to be

multiple critical paths. Identify the riskiest path by looking

for the riskiest tasks and their interaction

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Looking Back at the Challenger Disaster, Enron’s Collapse, and the Anthrax Clean-up at the State Department

Risk Management: Who Pay’s

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The Challenger Disaster

What have we learned?

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Some HistorySource: Maier, 2002

More than 25 years since the disaster Known facts

Jan. 27, 1986 Morton –Thiokol (the Utah based Rocket

manufacturer) instructed NASA not to launch the Challenger on Jan. 28, 1987

Thiokol’s top expert on the O-ring seal believed the projected temperature of 29 deg. F at launch would cause O-ring seal failure

Serious O-ring damage had occurred in a past launch at a temperature of 53 deg. F.

NASA challenged Thiokol’s recommendation

After a brief conference Thiokol reversed the recommendation to accommodate a high ranking customer, NASA

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Three Little Known Facts

Source: Maier, 2002

Thiokol was not the only contractor to recommend stopping the launch. Rockwell also recommended the launch be stopped.

The astronauts did not die immediately in the explosion but later when the flight deck broke away and the orbiter slammed into the ocean 2 min. and 24 sec. later after an 8 mile fall.

The veracity of the entire public record is questionable.

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Why did -

Thiokol reverse their original recommendation to stop the launch?

Rockwell’s communication, “Rockwell feels it is not safe to launch.” fall on deaf ears?

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Some Risks Identified The organizational culture at NASA The relationships with contractors Core values Blind faith in the procedures Strict observance of the chain of command Blinders- Limit one’s concerns to one’s job Obey the manager Short-term results drive everything Meet project goals regardless Distort or suppress bad news

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The Role of Risk at NASA

Risk taking culture Evaluation of risk focused on the

probability of occurrence Risk analysis was performed with

incomplete and distorted information

No focus on the impact or consequences

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No one asked “Who pays?”

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Probabilities of occurrence and consequences or impact must be evaluated

Hurricane Katrina

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The Enron Collapse

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The Enron Collapse: questions for discussion

What risks (problems) can you identify that might have contributed to the collapse of Enron?

Where and why did it go wrong? What were the main reasons for

Enron’s collapse? What part did risk play?

Could this happen in some part of your company?

How easy is it to bend or break rules? What is the importance of values? Who pays?

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Enron filed for Bankruptcy 12/2/01

High profile leader in the world of energy

Many employees had their entire retirement invested in Enron

Enron had been lauded by McKinsey, frequently as an example of an innovative company

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What Happened?

Elements of a Ponzi Scheme Extensive use of “aggressive’

accounting policies e.g., Special Purposes Entities

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The real picture By the end of 1987, Enron’s debt was

75% of its market capitalization Managing the debt load was a constant

problem 1990 conflict internally over the strategic

direction of the company Two directions were pursued which place

strain on the balance sheet Investing in physical assets Expanding its trading activities

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The real picture continued

Enron’s auditors, Andersen, considered Enron a difficult and demanding client

At Andersen doubts about some of the accounting policies were expressed

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Enron

No risk analysis, over optimism and group think

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The Anthrax Clean-up at the State Department

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State Annex 32, Sterling Virginia

1. A sorting, collection and distribution point for U.S. mail and parcels sent to and from embassies abroad

2. The Daschel letter came through this distribution center and contaminated Annex 32

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Some History October 2001 Anthrax is received

Several people were killed within days Many lay ill Many were required to take a very

potent antibiotic, CIPRO State Department Priorities

Safety Clean-up Repair damage

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Scope of the Project 70,000 square foot warehouse Flat sorters, Parcel sorters Rolling stock, Cabinets Large quantities of electronic

equipment 80 employees

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Decontamination and Rehabilitation Project

Project Manager: Tom Sgroi Close and contain the entire facility

immediately Project team

Large Cross functional (public health, EPA, CDC,

U.S. Army, OSHA, Loudoun Fire and Rescue, Loudoun County Board of Supervisors

Communication Methods Frequent Town Hall meetings Frequent reports to the Loudoun County

Board of Supervisors

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Risk Identification

1. Waste disposal 2. Fumigation3. Air quality4. Environmental sampling 5. Emergency preparedness6. Equipment disposal7. Salvage8. Communication9. Conflicts of Interest

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Avoiding Conflicts of Interest An Environmental Clearance

Committee (ECC) comprised of public health experts was to review the whole process and decide on suitability of re-occupancy of the building

EEC members were not involved in the planning and decision making efforts of the clean-up

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Sgroi Decided to Removed the Entire Contents of the Building?

400 tons of materials, supplies and machinery

All contents were removed then incinerated, steam sterilized or cleaned with ethylene oxide

Total removal resulted in more costs than just clean-up and partial removal

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Risk Management What was the risk Sgroi had

identified that resulted in the total and more costly removal of building contents?

What were the impacts of the identified risk?

Who would ultimately pay if Sgroi had underestimated the risk probability or the impact?

Did the probability really matter?

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Zero Tolerance

Health and safety were the highest goals of the project.

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Lessons Learned from the Anthrax Clean-up Incorporate mail screening and

containment with engineering controls such as ventilation and exhaust systems

Provide improved protection for mail handling employees

Having the case file with agency names and responsibilities will facilitate any future clean-up efforts

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What Have We Learned

Identify risks and impacts – Ask yourself, “Who pays?”

Don’t be afraid to incur higher costs if the impact is too high for choosing a less costly alternative.

Assess risks and reassess risks. Save your project notes for Lessons

Learned.

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Examine various scenarios when performing risk identification. Before assigning the probabilities evaluate the impact.

If you can not live with the impact of a risk (the worst case scenario)

then you can not take the risk regardless of the probability of

occurrence.

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Thank you for your attention.

Please contact Dr. Dufnerif you have questions or comments.

[email protected] or

[email protected]