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19 views16 pages

Creating A Communicatins Planv1-0

Uploaded by

neratoraca
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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WEEK 7

MANAGEMENT
Information Technology Project Management
Magister Sistem Informasi
Universitas Komputer Indonesia
SOURCE:
PINTO, J.K. 2010, 2ND. ED.
PROJECT

• Project Risk, is any


possible event that
can negatively
affect the viability
of a project.
RISK MANAGEMENT
• Risk Management is the
art and science of
identifying, analyzing,
and responding to risk
factors throughout the
life of the project and in
the best interests of its
objectives.
PROCESS OF RISK MANAGEMENT
• Risk Identification – the process of determining the specific
risk factors that can reasonably be expected to affect our project.
• Analysis of Probability and Consequences – the potential
impact of these risk factors, determined by how likely they are to
occur and the effect they would have on the project if they did
occur.
• Risk Mitigation Strategies – steps taken to minimize the
potential impact of those risk factors deemed sufficiently
threatening to the project.
• Control and Documentation – creating a knowledge base for
future projects based on lessons learned.
RISK IDENTIFICATION
• Financial Risk
• Technical Risk
• Commercial Risk
• Execution Risk
• Contractual or Legal Risk
• Others: Absenteeism, Resignation, Staff pulled away by management,
Additional staff/skills not available, Training not as effective as desired,
Initial specifications poorly or incompletely specified, Work or change
orders multiply due to various problems, etc.
RISK IDENTIFICATION METHOD
• Brainstorming meetings – Bringing the members of the
projects team, top management and even clients together for a
brainstorming meeting can generate a good list of potential risk
factors.
• Expert Opinion – The collective “wisdom” of sets of experts
is then used as the basis for decision making.
• History – In many cases the best source of information on
future risk is history.
• Multiple (or team based) Assesment – A team based
approach to risk factor identification encourages identification of
more comprehensive set of potential project risks.
TYPICAL RISK VARIABLES
(Jafary, 2001:85, Management of Risks, International Journal of Project Management, 19(2))

• Promotion Risk
• Market Risk, volume
• Market Risk, price
• Political Risks
• Technical Risks
• Financing Risks
• Environmental Risks
• Cost Estimate Risk (completion risk)
• Schedule Risk (delay risk)
• Operating Risk
• Organizational Risk
• Integration Risk
• Acts of God
ANALYSIS OF PROBABILITY & CONSEQUENCES

• Risk = (Probability of Event)(Consequences of Event).


• Risk Impact Matrix:
Consequences
Low High
High
Likelihood
Low
ANALYSIS OF PROBABILITY & CONSEQUENCES
Example: DEVELOPING A NEW SOFTWARE PRODUCT FOR THE RETAIL MARKET
Risk Factor Consequences Likelihood Impact Potential
A. Loss of lead programmer High Low Moderate

B. Technical failure High Medium Serious


C. Budget cut Medium Low Minor
D. Competitor first to market High High Serious

Consequences
Low Medium High

D
Likelihood

B
Medium
high

C A
Low
DETERMINING LIKELY RISKS & CONSEQUENCES
Probability of Failure (Pf)
SCORE MATURITY COMPLEXITY DEPENDENCY

Low (0.1) Existing software Simple design Not limited to existing system

Minor (0.3) Minor redesign Minor increase in Schedule or performance depend on existing
complexity system
Moderate (0.5) Major change Moderate increase Moderate risk to schedule or performance

Significant (0.7) Tech. available but Significant increase Schedule or performance depend on new
complex design system or process. Significant cost or risk
Major (0.9) State of art, some Extremely complex Schedule or performance depend on new
research complete system or process. Very high risk.

Consequences of Failure (Cf)


SCORE COST SCHEDULE RELIABILITY PERFORMANCE

Low (0.1) Budget estimate not Negligible/ Minimal or no reliability Minimal or no performance
exceeded no impact consequences consequences
Minor Cost estimate exceeds Minor slip in Small reduction in Small reduction in system
(0.3) budget < 5% schedule reliability performance
Moderate Cost estimate exceeds Small slip in Some reduction in Some reduction in system
(0.5) budget < 15% schedule reliability performance
Significant Cost estimate exceeds Slips excess 1 Significant degradation in Significant degradation in
(0.7) budget < 30% month reliability system performance
Major Cost estimate exceeds Large Reliability goals cannot be Performance goals cannot
(0.9) budget < 50% schedule slip achieved under current plan be achieved
CALCULATING A PROJECT RISK FACTOR
• Use the project team consensus to determine the scores for each
Probability of Failure Category: Maturity (Pm), Complexity (Pc),
Dependency (Pd).
• Calculate Pf by adding the three categories and dividing by 3:
Pf=(Pm+Pc+Pd)/3.
• Determine the scores for each Consequences of Failure Category: Cost
(Cc), Schedule (Cs), Reliability (Cr), Performance (Cp).
• Calculate Cf by adding the three categories and dividing by 4:
Cf=(Cc+Cs+Cr+Cp)/4.
• Calculate Overall Risk Factor for the project by using the formula:
RF=Pf+Cf-(Pf)(Cf)
• Rule of Thumb: Low risk Rf < 0.3
Medium risk Rf = 0.3 to 0.7
High risk Rf > 0.7
QUANTITATIVE RISK ASESSMENT
• Assume your project team has decided upon
the following risk values:
• Pm = .1, Pc = .5, Pd = .9
• Cc = .7, Cs = .5, Cr = .3, Cp = .1
• Determine the overall Project Risk using
qualitative method
RISK MITIGATION STRATEGIES
• Accept Risk
• Minimize Risk
• Share Risk
• Transfer Risk
• Use of Contingency Reserves
CONTROL AND DOCUMENTATION
• Control and documentation methods help
manager classify and codify the various risks
the firm faces, its responses to these risks, and
the outcome of its response strategies.
• Control document has to coherently identify
the key information: what, who, when, why,
how.
PROJECT RISK ANALISYS & MANAGEMENT
(The European Association for Project Management)

• Define
• Focus
• Identify
• Structure
• Clarify Ownership of Risk
• Estimate
• Evaluate
• Plan
• Manage

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