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Project Management Tool
Practical way to integrate risk into project
planning and control and there are project
tools that effectively support risk
management.
Once risks are identified as business risks,
risk assessment and management are
integrated into the project planningprocess.
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ustomer !e"uirement
!e"uirements are customer#driven and so
are risks
The ! document is the project manager$s
definition of customer re"uirements,
developed from information gleaned from
the customer.
The re"uirements document addresses thecustomer$s business setting and needs and
e%pectations for a project solution.
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&ork 'reakdown (tructure
First level: The Deliverable
) defining the work necessary to produce the
deliverable is to complete a work breakdown
structure *&'(+ from the top *the deliverable+
down tothe third or fourth level of tasks.) t represents the final product or service
outcome of the project, performing tospecification and accepted by the sponsor,
client, andlor user.
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&ork 'reakdown (tructure
Second level: Summar Tasks -ive or si% basic chunks of high#level work that serve
as the basic components of the project#the summary
tasks which are integrated at the end of the project tocomplete the job.
) 'uilding project / architectural drawing, building supplies,
ventilation systems, water, and electrical systems.
) (oftware project / hardware platform, software, interfaces,
training program, and financing.
) 0ealth management system / clinic population, health
information system, medical personnel, space, and e"uipment.
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&ork 'reakdown (tructure
Third level: Subtasks 'reakdown of the summary tasks outlined above into
two or more subtasks, which would be necessary to
complete to produce the second level summary task.) i.e. building project, under the summary task architectural
drawing, this might include three tasks#get ad architect, prepare
preliminary blueprint, and check against standard blueprint
template.
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&ork 'reakdown (tructure
Fourth level: !ork Package 1etail at the real tasking level#the work package.
ndividual tasks assigned to team members.
The actual work assignments that will be necessary toschedule and the risks that the work will not make
schedule, cost, and2or "uality re"uirements.
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!isk Matri%
!isk matri%, the fundamental risk template thatcaptures the essential risk information in a
project.
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Steps in Preparing a Risk Matri"
(tep 3/ dentify tasks with risk.
(tep 4/ 1escribe risk.
(tep 5/ 1etermine impact.
(tep 6/ 7stimate chancelprobability of risk event.
(tep 8/ !ank risk by severity.
(tep 9/ dentify mot causes.
(tep :/ Prepare contingency plan.
(tep ;/ 7stimate schedule impacts uslng M( Project software.
(tep
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>etwork 1iagram
'uild a network diagram of this summary
task
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>etwork 1iagram
Start #ith a net#ork template$
)?lways start your network diagramming with a
template or model of the typical network,
and adjust it to the project you are planning.
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>etwork 1iagram
Project paths 3
# ?, , -, @, 0 A 9 B 8= B 58 B 5 B 5 A
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>etwork 1iagram
Tailored net#ork diagram$
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>etwork 1iagram
ndependent actvities)?n activity that doesnCt rely on others to start or to
finish
Predecessor actvities)?n activity that determines the start date or finish date
of a successor activity based on a logical relationship.
Time#based activity2duration)?ctivity that determined by the critical path of the
project
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>etwork 1iagram
ndependent actvities ) ?, '
Predecessor actvities ) ,1,7,-,@,0
Time#based activity2duration ) ?,,-,@,0
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>etwork 1iagram
%nalsis o& earl and late starts and slack
Project paths
?, , -, @, 0 A 9 B 8= B 58 B 5 B 5 A
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>etwork 1iagram
%nalsis o& earl and late starts and slack
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@annt hart
'ar chart representing the whole project
graphically, based on linkages and durations
This process, from initial re"uirement through
the @antt chart, is the core process of projectrisk management.
This is where risks are captured and identified,
as part of the project planning process.
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'usiness and project risk
Dey factors in the success or failure of any
project are the broad business factors for
success and failure and the process of
selecting the project in the first place.
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'usiness and project risk
S!(T analsis: risk identi&ication
Strengths
) ts competencies and its core capabilities and
identifies its current performance advantage itsdifferentiators
!eaknesses
) The company looks at its weaknesses in terms of its
inability to overcome risk and uncertainty in past
initiatives and identifies internal improvements
that it must make to address them.
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'usiness and project risk
S!(T analsis: risk identi&ication
(pportunities$
) Opportunity is the converse of riskE there is no
risk if there is not opportunity on the other side.
Threats$
) ompetition, technological change, economic
crisis, and financial difficulty, all constitute therisk factors that the business faces and thus
the risk factors that individual projects face
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'usiness and project risk
S!(T analsis: risk identi&ication
!eighted scoring model$
) Fse the weighted scoring model to select
projects based on their relative scores against
strategic objectives,
) This process is evaluating contingency plans
to address risk inherent in various candidateproject plans, costs estimates, and cash flow
forecasts.
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'usiness and project risk
)ustomer and )lient Risk
) lient risk management issues
) Project deliverable impacts
) Partnering in risk management
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'usiness and project risk
Project and Risk Management Processes
) (electing the right projects
) The analysis of risk in project selection involves
three basic issues/
-inancial risk
(chedule risk
Guality risk
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Project Manager*s Roles
Headership
Motivation
Deeping risk manageable -acilitator2Manager
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!isk#based scheduling *P7!T+
alculating a risk#based schedule/ P7!T
analysis.
To use risk assessment and analysis
information to calculate a risk#based
project schedule in Microsoft Project.
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!isk#based scheduling
The risk#based schedule is calculated from
your original project schedule, but uses
your weighted estimates of three possible
task durations *e%pected, pessimistic, andoptimistic+ to come up with a new project
schedule.
The new schedule is calculated forindividual tasks and rolled up to the whole
project
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!isk#based scheduling
'asis for estimates
) nternal accounting records
) Project team knowledge
) 7stimating manuals and databases.
) onstruction
) (oftware development
) Hearning curves
) Parametric estimating
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!isk#based scheduling
Project ssues
) Poorly defined project scope
) Major omissions *overloooked+ in
taskdactivities
) Optimistic time2cost estimates
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Management !eserve
Project -inancial) ssues such as internal resources, commercial credit,
e"uity issues, venture capital, government
grantslsubsidies, and capital rationing govern theviability of the company itself and its capacity to
finance a project up front.
) To share risk, many companies are going to
earmarked venture funds for new product
developmen so that sponsorsI funds are bounded by
a project to avoid cross subsidy.
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Management !eserve
+nsurable risk
) !isk that is determined to be insurable on the
open market and which is not self funded.
) nsurance is a vehicle to share risk and to
outsource risk that has a high probability and
impact severity.
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Management !eserve
+denti&ication o& project risks$
) nternal
) Technical
) >ontechnical
) 7%ternal
) Predictable
) Fnpredictable) Hegal
) !isk event