Project Management Risk

7/30/2019 Project Management Risk

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Risk Management for I/S Projects


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Risk Management for I/S

ProjectsWhy is Risk Management

Important?

What is Risk?

Risk Management Process

Identify project goals & objectives

Identify Risk

Analyze Risk

Plan for Risk

Control Risk


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Why are we here?

Information Technology

Projects are difficult to

manageProject failures occur

with alarming frequency

Prudent measures toassess and manage

risk can increase

probability of project

success


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What is Risk?

A potential

problem waiting

to happenMay adversely

impact schedule,

cost, objectivesWill vary in

probability, impact

and timeframe


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What is Risk Management?

Risk Management is a

systematic process

of identifying,analyzing and

responding to

project risk.

PMIs PMBOK


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Step 1: Identify Project Goals

and ObjectivesWhat are business objectives?

What are technical objectives?

What are project constraints?

Identify and state risks as they relate to

the ability to achieve objectives within

the known constraints

Note: If objectives arent well-defined -

that is a major risk.


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Case Study Introduction

Improving and

enforcing the

SoftwareDevelopment Life

Cycle

Small Shop

Not a process-oriented culture

Project Objectives:

Increase consistency

among all softwaredevelopment

projects

Utilize processes that

will increase the

probability of project

success


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Step 2: Identify Risks

Encourage input of perceived risk

Identify risk while there is time to take

action

Capture risk in readable format

Communicate risk to those who can

solve it

Goal: Prevent project surprises


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Risk Identification: examples

Inadequate

Management

CommitmentAmbiguous

requirements

Inadequate userinvolvement

New Technology

Undefined or

ambiguous Scope

Insufficient orinappropriate staffing

Inadequate tools or

technologyLarge and dispersed

project team


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Identifying Risks

Various publications

and organizations

have developedgeneric risk categories

and generic checklists.

Checklists help assure

arent overlookingsomething

Consider three

perspectives:

Project Managementand staffing

Technical

Quality of Product


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Project Management Perspective:

Tactical Considerations

Budget

Resource availability

and expertise

Adequacy of

Methodology /

process

Project Size &

Complexity

Schedule &

Estimating risks

Vendor

Management

Project

Communication

Sponsorship and

high-level support


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Technical Perspective

Data Conversion: (GIGO)

System Interfaces

Operations / Post-implementation Support

New or unproven

Technology

Implementation & rollout

Infrastructure support

Adequacy of Infrastructure

Legacy Impacts / Support


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Quality Risks

How well will

product meet

expectations? Ease of Use

Data Integrity

Understand impact

to users

Defects in

production


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Techniques to Identify Risk

Checklists: Several Checklists are

available as reminders of possible risk

areas to considerInterviews: Group or individual

Working Group / Workshop

Periodic meetings: Dialogue of riskinformation

Surveys: Selected categories of people

identify risks quickly


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Statement of Risk

May need to Drill Down to determine

the real risk to the project:

Asking Why?

Why is this situation a risk to the project?

What is the worst case scenario if the risk

is realized? Some less than ideal circumstances may

not be true risks


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Discussion

Case Study: Enhancing

and enforcing the

Software DevelopmentLife Cycle

What are some of the

risks?

(be creative- pretend you

know this company)


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Step 2: Risk Analysis

Quantify two factors:

Probability of a failure

Impact of a failure

Risk Exposure (RE) = P x I

Examples:

Tornado in Wisconsin (low probability, high impact)

My son forgetting to take out garbage (High

probability, low impact)

Others: What risk(s) have you taken today??


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Quantifying Risk

Early in Project

More difficult to be

preciseEstablish risk order

of magnitude

Continue to revisitas part of risk

management

process


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Quantifying Risk: Tools and

Techniques

Decision tree

Identify possible outcomes: associated

likelihood and impactIdentify expected monetary value:

(probability %) x (Risk event value)

Simulation: Prototype what if scenarios

Expert Judgement (Use a judgement

based scale)


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Quantifying Risk

Define scale you will be

using for Probability and

ImpactTry to define scale to

correspond to key

objectives andconstraints

Look at example

Checklist


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See GCs Risk Checklist

Work in Process

Based on Lessons Learned & Industry

standard risks

Tool for PMs

Includes a risk scale for probability and

impact

Weighted factors for size & complexity


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Discussion: Case Study Risks

What is probability

of each risk

occurring?What is impact if the

risk is realized?


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Step 4: Plan for Risk

Develop Risk

Management Plan

For each Risk Determine Time

Frame for action

Define Mitigation

Strategy


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Plan for Risk: Risk Management

PlanDefine the Process for

tracking and monitoring

riskRoles &

Responsibilities

What and how riskinformation will be

tracked

Establish Mitigation


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Possible Mitigation Strategies

Acceptance: Consciously choose to live

with the risk consequences

Avoidance: Eliminate the risk.

Protection: Backup / contingency plan,

i.e. Redundant system.

Reduction: Reduce either the

probability or impact of the risk.


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More Mitigation Strategies

Research: Need more information - i.e.

market research; prototypesRisk Reserves: Leave a contingency -

or margin for error.

Transfer: Shift risk to anotherorganization, person or group (retain

responsibility)


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Document Known Risks

Description of risk

Date identified

Who identified

Category

Status

Risk Owner

Who is assigned

Mitigation strategy

Action Plan

Time Frame to

actRE: Probability &

Impact

Other Measures: Quantitative

threshold

Leading indicators

Risk Leverage


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Discussion

Discuss possible

mitigation strategies

for case study risks


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Step 5: Control Risk - On-going

Periodic monitoring and reporting of risk

data

Visibility and accountability regarding riskstatus

Reports from risk repository

Periodic meetings / updates regardingrisk status

Periodic re-assessment of risk exposure

Update Risk data and project plan


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Summary

Why Risk Management is Important

Steps of a Risk Management Process

Identify Project Goals & Objectives

Identify Risk

Analyze Risk

Plan for Risk

Control Risk


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Thank you


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Bibliography

Project Management Institute: Project Management Body of

Knowledge

Keil, Mark; Cule, Paul; Lytinen, Kalle; Schmidt, Roy: A

Framework for identifying software project risks:Communications of the ACM, November 1998

Hall, Elaine. Managing Risk. Methods for software systems

development. Reading, MA: Addison-Wesley Publishing,

1998. Jones, Capers. Assessment and Control of Software Risks,

1994.

Mulcahy, Rita, Managing and Estimating Project Risks,

September 1999

Project Management Risk

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