Project Management for Computer Scientists PDF

22/06/1446 Project Management for Computer Scientists 5) Risk Management...

22/06/1446 Project Management for Computer Scientists 5) Risk Management Dr. Mourad Mars © 2024 1 Risk Management Risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on project objectives Examples: Deliveries are delayed, Accidents happen, People get sick, etc Risk events can be identified before the project starts like equipment malfunction or change in technical requirements Risks can be beyond imagination like the 2008 financial meltdown Risks can have positive consequences such as unexpected price reduction in materials 2 1 22/06/1446 Project Risk Reduction Over Time Risk event occurring is greatest during the early stages of a project As we approach the final stages of the project, risks decrease as we resolve key uncertainties, such as the viability of the technology and the feasibility of the timeline Risk Event Graph 3 Proactive Risk Management: A Preventive Approach 4 2 22/06/1446 The Risk Management Process The Risk Management Process 5 The Risk Management Process Step 1: Risk Identification Step 1 generates a list of all the possible risks that could affect the project Organizations use Risk breakdown structures (RBSs) in conjunction with work breakdown structures (WBSs) to help management teams identify and eventually analyze risks. It differs from a project to another Use of the RBS reduces the chance a risk event will be missed On large projects multiple risk teams are organized The Risk Breakdown Structure (RBS) around specific deliverables and submit their risk management reports to the project manager 6 3 22/06/1446 The Risk Management Process Step 1: Risk Identification A risk profile is another useful tool It is a list of questions that address traditional areas of uncertainty on a project These questions have been developed and refined from previous, similar projects Partial Risk Profile for Product Development Project 7 The Risk Management Process Step 2: Risk Assessment Step 1 produces a list of potential risks Not all these risks deserve attention. Some are trivial and can be ignored, while others pose serious threats to the welfare of the project Managers must refine the list in terms of importance and need for attention Scenario analysis is the easiest and most used technique for analyzing risks Team members assess the significance of each risk event in terms of: Probability of the event Impact of the event 8 4 22/06/1446 The Risk Management Process Step 2: Risk Assessment Defined Conditions for Impact Scales of a Risk on Major Project Objectives (examples for negative impacts only) 9 The Risk Management Process Step 2: Risk Assessment Partial example of a risk assessment form used on an IS project involving the upgrade from Windows 10 to Windows 11 10 5 22/06/1446 The Risk Management Process Step 2: Risk Assessment The risk severity matrix provides the basis for prioritizing which risks to address Red zone risks receive first priority followed by yellow zone risks. Green zone risks are typically considered inconsequential and ignored unless their status changes Failure Mode and Effects Analysis (FMEA) extends the risk severity matrix by including ease of detection in the equation: Impact * Probability * Detection = Risk Value Risk Severity Matrix 11 The Risk Management Process Step 3: Risk Response Development When a risk event is identified and assessed, a decision must be made concerning which response is appropriate for the specific event Responses to risk can be classified as: 1) Mitigating Risk a) reduce the likelihood that the event will occur and/or b) reduce the impact that the adverse event would have on the project 2) Avoiding Risk Risk avoidance is changing the project plan to eliminate the risk or condition Although it is impossible to eliminate all risk events, some specific risks may be avoided before you launch the project For example, adopting proven technology instead of experimental technology can eliminate technical failure 12 6 22/06/1446 The Risk Management Process Step 3: Risk Response Development Responses to risk can be classified as: 3) Transferring Risk 13 The Risk Management Process Step 3: Risk Response Development Responses to risk can be classified as: 4) Accept Risk In some cases, a conscious decision is made to accept the risk of an event occurring Some risks are so large it is not feasible to consider transferring or reducing the event (e.g., an earthquake or flood) The project owner assumes the risk because the chance of such an event occurring is slim 14 7 22/06/1446 Contingency Planning A contingency plan is an alternative plan that will be used if a possible foreseen risk event becomes a reality The contingency plan represents actions that will reduce or mitigate the negative impact of the risk event The absence of a contingency plan, can cause a manager to delay the decision to implement a remedy Risk response Contingency plan A response is part of the A contingency plan is not actual implementation part of the initial plan, and the action is implementation plan and taken before the risk can only goes into effect after materialize the risk is recognized 15 Contingency Planning Risk response matrix is useful for summarizing how the project team plans to manage risks that have been identified Risk Response Matrix 16 8 22/06/1446 Opportunity Management Opportunity is an event that can have a positive impact on project objectives Examples: unusually favourable weather can accelerate construction work, or a drop in fuel prices may create savings that could be used to add value to a project Types of response to an opportunity: 1) Exploit 2) Share 3) Enhance 4) Accept eliminating the uncertainty allocating some or all the increasing the probability being willing to take associated with an ownership of an and/or the positive impact advantage of it if it occurs, opportunity to ensure that opportunity to another of an opportunity but not taking action to it happens party who is best able to Example: choosing site pursue it Example: assigning your capture the opportunity for location based on favorable best personnel to a critical the benefit of the project weather patterns or activity to reduce the Example: establishing choosing raw materials that completion time continuous improvement are likely to decline in price incentives for external contractors 17 Contingency Funds Contingency Funds are established to cover project risks identified and unknown When, where, and how much money will be spent is not known until the risk event occurs Contingency reserve fund divided into: 1) Budget reserves are set up to cover identified risks are allocated to specific segments or deliverables of the project 2) Management reserves are set up to cover unidentified risks Contingency Fund Estimate are allocated to risks associated with the total project 18 9 22/06/1446 The Risk Management Process Step 4: Risk Response Control The results of the first three steps of the risk management process are summarized in a formal document often called the risk register A risk register details all identified risks, including descriptions, category, and probability of occurring, impact, responses, contingency plans, owners, and current status The risk register is the backbone for the last step in the risk management process Risk control involves executing the risk response strategy, monitoring triggering events, initiating contingency plans, and watching for new risks Project managers need to monitor risks just like they track project progress 19 Change Control Management Change is inevitable Changes come from many sources such as the project customer, owner, project manager, team members, and occurrence of risk events Most changes easily fall into three categories: Improvement Changes Contingency Plan Scope Changes suggested by project team Implementation members Scope changes in the form Contingency plan of design or additions implementation represents Example: customer changes in baseline costs requests new feature or and schedules product redesign 20 10 22/06/1446 Change Control Management We need a clear change review and control process Change management system involves reporting, controlling, and recording changes to the project baseline Change Management systems are designed to accomplish the following: List expected effects of Review, evaluate, and Negotiate and resolve Identify proposed proposed changes on approve or disapprove conflicts of change, changes schedule and budget changes formally conditions, and cost Communicate changes to Assign responsibility for Adjust master schedule Track all changes that are parties affected implementing change and budget to be implemented 21 Thank You 22 11