Estimating, Risk and Issue Management Flashcards
What are the four common approaches to estimating ?
Delphi
Analogous
Parametric
Analytical
Risk is an important part of estimating why?
We most allow for the uncertainties that may have an effect on our project
An estimate is ?
An educated guess
An estimate should have a ________ and the accuracy of estimates should ___________.
Range
Improve over time
As we understand more about the project and it’s requirements and discuss and engage with experts and do the work we would expect the range of inaccuracy to reduce this is called ?
Estimating funnel
Estimating funnel is a ______ of the increasing levels of estimating ________ that can be achieved through the phases of the lifecycle.
Representation
Accuracy
An estimate is a forecast of the ?
Probable time or cost of completing work
A subjective estimate
A vague and inaccurate estimate
Early stage of a project
Analogous estimate
Once more information and the requirements are known a comparison can be made between previous jobs and the current one
Parametric estimate
Once everything is finalised
The work and material for each work package from the WBS are measured
Analytical / bottom-up estimate
The cost of each work package up through the levels of the WBS to get a cost estimate for the whole project .
This provides a very accurate estimate
Optimistic estimates can lead to ?
Working late or missing deadlines
Estimates should be checked to determine whether they represent ?
Effort or duration
Effort represent the ?
Cost of the work
Duration represents ?
The time it will take to complete the work
For a network only duration is required for the network to determine the ?
Critical path
Risk management = a key activity for ?
The project management team
Risk management has four key steps ?
Identification of the risk
Analyse there probability and the impact
Response and decide if they need to mitigated if so how and implement that mitigation
Closure , where we close the risk
Risk are normally identified through ?
Brainstorming
Through a risk workshop or part of a planning workshop
Workshops have a facilitator or a agenda. The agenda consists of several risk areas such as :
Technical
Operational
Economic
Environmental
Social
Political
The risk must be expressed in terms of the :
Cause
The area of uncertainty
The effect
Once identified the risk must be analysed in terms of ?
Probability and impact
Probability describes ?
How likely the risk is to happen ; usually at some sort of percentage score
The impact describes
The impact on the project objectives of the risk occurs ; the assessment is made on the basis that we are not not taking any mitigating action.
Probability and impact are assessed on a ?
5 by 5 grid with the scales being low :
Very low
Low
Medium
High
Very high
We need to establish what we mean by these labels before we start the process.
Different areas of the grid are differentiated by different Colors
Green - the risk is an acceptable area and can be reviewed periodically no action is required
Amber - acceptable but be reviewed frequently in case their probability or impact increases and takes them
In to the red area
Red - significant and high priority some action must be taken to reduce either the probability or impact
In the response stage we must decided how to mitigate the risk as there are ____ main mitigating actions
5
1.PREVENT: Ask if it possible to prevent the risk ?
2.REDUCE: Consider if is possible to reduce the probability or impact to an acceptable level ?
3.FALL BACK PLAN: Have a plan in place if the risk occurs
4.ACCEPTANCE: hope for the best(not appropriate for red risks)
5.TRANSFER: can the risk be transferred to another party ?
5 responses
Prevent
Reduce
Fall back plan
Acceptance
Transfer
One or more mitigating action can be chosen and the decision is made based on the ?
Cost of action and the difference it would make
Closure : once the response has been decided the plan must change to take account of it this may mean we have ?
To amend the network
Change some of the estimate
likely that as we estimate each task and look at the associated risk we have to revisit the network until we are satisfied that the associated risks can be achieved whilst keeping the risk at a an acceptable level :
It may take a considerable amount of time to complete properly
Once the action is implemented during the response step it must be monitored
For effectiveness during the project :
- When the risk has passed it is closed
- if any risk occur they become a problem to deal with, the risk itself is closed
- if there any risk associated with the live operation then are based into BAU and the risk is closed
The risk must be recorded in the _______ so they can be reviewed throughout the project
Risk register
We must ensure that the mitigating actions are having ______, keep an eye out for _________ and ensure the risk we have accepted haven’t changed _____
The desired effect
New risks
Adversely
Threat :
Something that if it happened would have an adverse impact on the project objectives
Modern risk management also includes ______ as risks
Opportunities
An opportunity is a?
Uncertainty that if it was to happen would have a positive impact on the project objectives
In response to an objective we could reject because it’s not worth doing we could also ?
Make it more likely , which we call enhance the opportunity
Or exploit the opportunity
Additional opportunity responses:
Share
Plan an option
Share opportunity:
We can share the benefit with a third part who can safest whether we are able to take advantage of an opportunity or not
This is similar to transferring a threat and it usually associated with the context pricing mechanism ( share the pain and share the gain)
Plan an option opportunity:
If the project develops in a certain way then we may be able to take the opportunity and we prepare a plan in case this happens.
Plan an option is similar to fallback
For threats
Risk responses summarised : Threat
- prevent or avoid the risk so it cannot happen anymore or it doesn’t have an impact.
- reduce its probability or impact
- plan b or fall back
- transfer to a third party
- accept the threat because it isn’t very serious
Risk responses summarised : opportunity
EXPLOITthe opportunity or take advantage
Enhance it or make it more likely to happen
SHARE IT with a third party
PLAN AN OPTION in case things develop in a particular way
REJECT the opportunity because it isn’t worth it.
Risk management is one of the keys to a successful project but In order to monitor the situation and the effect of the mitigating actions we need to know ?
What the effects are, by recording the risk in a risk register
A risk register contains
- A reference number for identification purposes
- Description which provides details of the risk
- Probability provides an idea of the likelihood of the risk occurring
- impact describes the complication that may arise if the risk occurs
- counter measure describes the mitigating action that will it can be taken given the risks occurrence
A residual risk is where you will record the probability and impact of the risk after actions are implemented.
The risk owner is the person responsible for monitoring and it’s current status
A risk is closed when ?
It can no longer happen
- the entry is maintained for audit
Purposes in the future
It is unusual for a project to complete without there being some problems along the way many of which are dealt with by the ?
Project manager and the team
Some time resolution of a problem is outside the authority level of the pm and team or they are unable to resolve the situation these are called ?
Issues
- a problem that is now Breaching or is about to breach delegated tolerances for work on a project or programme. Issues require support from the sponsor to agree a resolution
Tolerance is the permissible ______ from the plan without reference to the next level management.
Deviation
A risk is something which has ?
A concern or problem is something which the PM is ?
Uncertainty
Authorised to deal with
An issue is something that left unresolved will cause the plan to ?
Exceed its tolerance and should be immediately escalated for advice and guidance
The overall process for issue management is quite straight forward:
The issue is raised and logged the project manager evaluates it and recommends a solution
The project manager escalates this to the sponsor and or the steering group who make a decision which the project manager implements
The issue log is updated with the progress of the issue and is used in project reviews to establish the outstanding issues that require further attention or escalation
At the end of the project the issue log provides a useful source of lessons learned
Estimating by use of a detailed WBS structure is known as WBS
Analytical
Risk management is applicable ?
Through out the project
Lifecycle
The effect of reducing a risk is ?
The consequence and/or likelihood of the risk are reduced
Estimating uses different methods to produce a prediction of the _____ and ____ required to complete the scope of the work to the defined _______.
Time and resources
Quality requirements
Estimates have multiple purposes:
- to conduct economic analysis for investment appraisals and option selection to support judgements about value for money.
- as an essential input for creating a resourced schedule
- to enable budget setting and consideration of affordability
- as the starting point for risk analysis and contingency determination
There are are choice of methods to produce an estimate - the actual adopted depends on:
- the point of the lifecycle where the estimate is being carried out
- the time available
- and the amount of detailed information that existing concerning the scope and working approaches
Parametric: Uses a _______ relationship between historic data and other variables to calculate and estimate. The specification of each deliverable are established together with the particular parameters that apply.
Statistical
Parametric estimating can be one of the most accurate techniques for determining a projects ______ and ______, provided the scope being estimated accurately represents the expected final requirements.
Duration and cost
Analogous: this ______ method and is dependant on ______ being available if a similar project to the one being estimated. If the historic project was the same size , similar complexity and the method by which the new project is being delivered is the same then it is accepted that the cost of previous project becomes the new estimate
Comparative
Data
Analogous : it is possible to factor this estimate to take account of ______.when the estimate is produced at the start of the concept phase it often referred to as an order of ________. To carry out this type of estimate the data from the previous projects needs to be readily available . It is common that this estimate will provide the basis for the decision to proceed with the project
Known variables
Magnitude estimate
Analytical : when the detailed scope of the project has been defined usually through the formation of a _______ detailed estimates can be produced for labour and labour resources to complete the activities in scope. This is often referred to as a _____ method in that the tasks are producing, the estimates will be delegated to those who are actually going to deliver the individual pieces of work over packages, the individual estimates I’ve been summed from the bottom of the WBS to the top.
WBS
Bottom up
Analytic: for this estimating method to be valid the WBS needs to be representative of the work that will eventually be carried out and so a verified WBS is essential to the accuracy of the final estimate. Analytical estimate can be used to produce a _____ and not an estimate of ____
Cost estimate
Duration - summing the estimated durations from
The bottom of the WBS to the top would not take account of work packages that will be conducted at the same time as others
Delphi: to avoid influence from individual group member’s when estimating is carried out in a group discussion the Delphi method is used. With Delphi the individual group members , who are tasked with providing the estimate do so in ______ from each other and submit their independent views to a central focal person who facilitates the exercise. The facilitator then reviews the data and provides a ______ to each member of the group who then feeds back _______ to build up the estimate.
Isolation
Summary report
Additional data
Delphi - once the _____ is satisfied that all possibilities have been considered the exercise is then closed and the output becomes the agreed estimate. The main advantage of Delphi is the accuracy and dependability of the decisions reached which have been widely shown to be much better than approaches that viewed as less structured
Facilitator
Estimate and life cycle -
Analogous -
Analytical -
Parametric -
Delphi -
Analogous - concept
Analytical - definition
Parametric - deployment
Delphi - concept , definition , deployment , transition
As the project progresses project uncertainty declines and as a result different estimating methods can Be applied to ___________. The increase in accuracy from the concept phase through to implementation is often termed the _________.
Verify previous estimates
Estimating funnel - as accuracy increases the level of contingency amount should decrease
Parametric =
Statistical
Analogous =
Comparative
Parametric = based on the
WBS - BOTTOM UP
Delphi =
Group discussion
In the concept phase _____ method is applied based on the information from previous projects. Whatever the source of the data at this point in the lifecycle the estimates produced have relatively broad ranges. During definition phase it is likely that a ______ is available and as a verification take place the duration/work estimating can be carried out for individual assignments.
Analogous
WBS
Using work packages improves the _______ accuracy and team member commitment. The overall estimate range has now been reduced. During the deployment phase the level of detail at this phase will allow the ________ estimating using either published rates or historical data from the organisation own experience. Delphi can be used at ________ point in the lifecycle as it is a technique used to gain _____rather than to produce an estimate in itself
Estimate
Parametric
Any
Consensus
BENEFITS OF Re-estimating throughout the project life-cycle: Greater involvement of the project team
As the project progresses additional project team members will become part of the project organisation , they can apply their specific technical expertise to the estimating tasks , increasing the accuracy of the estimate. As new team members join the project the opportunity to clarify or validate the scope may become apparent as a result of different perspectives
BENEFITS OF Re-estimating throughout the project life-cycle: minimising effect of estimate error
If errors are likely to occur it is important that the project team become aware of these as soon as possible during project progression. Re-estimating provides an opportunity for the team to get timely warning of these and so inform stakeholders and take actions necessary to rectify estimates.
BENEFITS OF Re-estimating throughout the project life-cycle: opportunity to incorporate lessons learned
Good practice to review stages of work that have been completed to establish actual cost of the work performed in relation to the estimate for that work. Variances and trend can then be Incorporated into the estimated ahead with a view to adjusting these incorporating the review findings .
BENEFITS OF Re-estimating throughout the project life-cycle: reduced contingency reserves
At early stages of the lifecycle there is a great deal of uncertainty and a number of assumptions made in order to achieve an estimated value for time and cost. To manage this uncertainty an amount of contingency is reserved. As the project progresses re-estimating will take account of clarification of detail and do a new estimate will be established. As this uncertainty reduces , the level of contingency allowance can also reduce to match the increased certainty
BENEFITS OF Re-estimating throughout the project life-cycle: increased likelihood of adhering to overall estimates
By re-estimating throughout the lifecycle more targeted actions can be taken to respond to anticipated estimating variances , minimising the project-wide effect of variances of our in specific areas of the project. Adherence in this way provides confidence to stakeholders of the projects performance in relation to the published estimates.
Risk management is a process that allows individual risk events and overall risks to be understood and managed proactively , optimising success by ______ threats and _____ opportunities.
Minimising
Maximising
All projects are risky because they are ?
Unique , constrained , based on assumptions , performed by people and subject to external influences
Risk can affect the achievement of _____ either positively or negatively. Risk include both ________ and ______ and both should be managed through the risk management process.
Objectives
Opportunities and threats
Risk management must be closely aligned with _________. Cost,time and resource estimates should always take risk into account. The project manager is accountable for ensuring that risk management takes place. Depending on the size and complexity of the project a specialist risk manager may be appointed to oversee and facilitate the risk management process
Schedule management
The process of project risk management focuses on individual project risks , they should they occur will affect the _____. The project manager will also seek to understand the overall risk exposure of the project so this can be reported to the project sponsor and other stakeholders
Project objectives
Risk management process steps :
Management products :
Initiate = risk management plan
identification = risk register
analysis= risk reports
response= risk response plan
closure= lessons learned
Initiate - It is important that risk management if not seen by the project team as a burdensome process that will ensure every box is ticked. Instead this step will make sure that the level of process to be used fits the specific requirement of the project. The main purpose of this step is to =
The main purpose of this step is to ensure that there is a common understanding of the project to which the risk management process is applied.
A key output from the initiate step is the _______. Which details how risk will be managed throughout the life cycle. The risk management plan will be an important ______ for all stakeholders who require an insight into the risk organisation and control structure and the specific responsibilities for risk management, a number of appendices will also be included such as ______________
Part of the overall project plan, the risk management plan makes it quite clear how risks are going to be tackled for the project
Risk management plan
Reference
Templates and proformas of the documents necessary to effectively carry out the process.
Identification - for this step it is essential that ?
The project objectives are fully understood
There are a number of risk identification tools and techniques available to help facilitate risk identification such as :
Brainstorming
Assumptions and constraints analysis
Checklists
Prompt list
SWOT Analysis
Brainstorming - typically the output of a risk is a list of risk each described by a phrase or sentence indicative of the risk source
Captures risks quickly and offers a means on raising enthusiasm for risk management across a team. It can be used to engage project stakeholders in the risk identification process. An independent facilitator
Is used normally to ensure that the session is sufficiently well structured and maintains a good pace.
Assumption and constraint analysis -
Project definition and planning processes inevitably make use of large number of assumptions , if these assumptions are recorded they can be used to identify threats by assessing the probability that each assumption will be met and the impact on the project should the assumption be violated.
Constraints can be assessed in a similar manner , in cases where there is a significant probability that a constraint could be relaxed or disregarded opportunities may be identifiable.
Checklist -
Checklist are usually generated by an organisation to reflect the key issues that affect the environment. They are useful means of preserving the lesson learnt from the current of previous offence and can be incorporated into self assessment. Process or used as a safety net reviews. However, projects usually find themselves breaking new ground so checklist should be used in combination with other more proactive with identification techniques.
Prompt list - promised may be structured as a generic hierarchal structure of major risks, broken down into components and sub components to form a risk breakdown structure
A prompt list is another form of wrist identification, but one that uses headings usually related to generic sources of risk the aim of a prompt list is to stimulate proactive and lateral thinking populist are therefore a resource that can be used to support other techniques such as brainstorming. They can also be included in plans or procedures to indicate the breadth of issues that risk management is concerned with.
SWOT ANALYSIS - (risk management):
SWOT Analysis comprises a breakdown of the strengths and weaknesses, inherent in a project circumstances that give rise to opportunities and threats that is, expose it to risk.
SWOT ANALYSIS may also be useful in risk planning by considering how the strengths and opportunities can be used to reduce the weaknesses and threats.
The objective of a risk identification process is to draw out all knowable risk to project _______. Risk identification is a creative , divergent process that benefits from the input of a wide range of people using a method that does not restrict or bias their thinking
Objectives
Once risk are identified they are documented in a ?
Risk register
A risk register is a ?
Document listing identified risk events and their corresponding planned responses.
It provides a standard format to record risk information
Each risk in a risk register is likely to include
The description , causes, probability, impact, mitigation actions, fallbacks, status and the name of the individual responsible for each risk
Risk owners are
Individuals or groups who are best placed to assess and manage the specific risk. Working with the risk owner the project manager ensures that risks are clearly described in the risk register before moving onto the risk analysis step of the risk management process
Analysis : the relative severity of an identified risk is assessed using qualitative techniques to gain understanding of their individual significance and or their combined impact on objectives. They can be prioritised for further attention.
Quantitive risk analysis may also be used to determine the combined effects of risks or objectives for focus on specific risk based decisions. He didn’t techniques such as Monte Carlo stimulation , decision tress and sensitive analysis
Risk owners will work with the project team to carry out basic qualitative analysis as a minimum to identify and prioritise risk events based on the assessment of the:
Probability/ likelihood of occurrence and,
Size of impact on schedule , cost , benefits and potentially other objectives
- typically this is presented in the form of risk plotted on a probability/impact grid
Response : the risk owner uses Information collected during ______ and ______ to determine whether it makes sense to proactively invest previously unplanned time and money to bring the exposure to risk within tolerable levels
Risk Identification and risk analysis
Response : deciding when to take the risk of invest in increasing certainty is influenced by the appetite for risk of the sponsor and ultimately the investing organisation if there is a justification for investing time and money proactively to increase certainty ?
The risk owner makes provisions to implement the planned responses (time,resource,cost) and updated the integrated project plan (deployment baseline) accordingly.
What are the two types of responses to threats and opportunity ?
Proactive and reactive
Proactive response - a planned and implemented response undertaken to address the ______ of the risk occurring or the size of the impact if it did occur. Responses include _____ or ____ a threat or ______ or ______ an opportunity. Responses ideally focus on the _____ of the risk.
Likelihood
Avoiding or reducing
Exploring or enhancing
Cause
Proactive response - sharing risk in the supply chain is also a type of proactive response. ______ risk may be transferred to another party but risk to _______ schedule cannot be transferred.
Cost
Schedule
Reactive response - a provision for a course of action that will only be implemented if the risk _______. Such responses accept the risk but with a _______ response ready to go. Some reactive responses may require funding to be built into the interested plan because they are designed to _______ the risk and detect changes early.
Materialises
Contingent
Monitor
Threats - responses should be implemented that _______ the effect of the threats to the extent that the consequences of response actions do not exceed the likely value of reduction.
Reduce
Opportunities- the project should aim to _______ one or more of the projects objective in such a way that the cost and implication of the response actions do not exceed the likely value of __________.
Improve
Improvement
The aim of any risk response should be to ultimately ?
Produce a risk-efficient overall project solution .
Whatever response is chosen , care should be taken to consider the extent to which that response will deal with the risk. There are two types of risks that may emerge as a consequence of a response ?
Secondary risk and residual risks
Secondary risk are new risks that only occur as a result of the response being taken. If a secondary risk of ours the best outcome could be that it is if a lesser magnitude that the original risk then some progress has at least been achieved. If however the secondary risk is if the same magnitude or greater than the original risk the response would be considered ?
Ineffective
Residual risk is the amount of risk _____after a response has been committed. It is likely that the significance of this risk will need to be assessed in its own merits and a separate response planned to treat the residual risk.
Remaining
Risk response for threats are ?
Avoidance
Reduction
Transfer
Acceptance
Risk response for opportunities
Exploitation
Enhancement
Share
Rejection
Acceptance - some threats can be avoided by changing _____ or _____ so that the cause of the risk can be discounted. Such as :
Objectives or practices
Technical threat might be avoided by changing the specification for one of the projects products.
Reduction: responses that _____ the probability of a threats occurring sually require that the risk be tackled at _____. Such action are considered as _______ and they can be an effective option for risk control. However the implementation of preventive action usually requires investment of ________ and __________ and this should be justified by cost versus benefits considerations that is the cost of implementing the action should be less than the reduction in the risks expected value.
Reduces
Source
Preventive
Cost and management time
Transfer - risk transfer involves passing in the responsibility for bearing the impact of a threat to another party. An organisation may seek to obtain financial protection through the purchase of insurance. This approach may reduce impact, but have no effect on the ______of the events occurring. Risk transfer may only result in an overall reduction to the level of project risk if a party to whom risk is transferred is more capable of managing it. it’s usually not possible or even desirable to transfer risk completely so risk transfer requires a balanced approach that leaves ______ risk on both sides
Probability
Residual
Acceptance - where there is no acceptable or economically viable approach to fret, avoidance or reduction _____ has to be absorbed and its consequences managed. Time impact maybe managed by planning strategies that prevents high-risk activities from being close to critical path. Although this is often not possible provision for cost impact should be planned within the budget do financial __________. The project should also consider the impact that acceptance of threaded will have on its stakeholders and advice them accordingly.
Residual
Contingencies
Exploitation - exploiting an opportunity involves changing the project _____ in order to achieve a beneficial outcome for one or more stakeholders. If all stakeholders are likely to to benefit this would be a win-win decision and opposition to such change might be correspondingly low. However on some occasion to exploit some opportunities may only benefit one of the stakeholders, discussion and review may then follow to agree on the best way forward.
Scope
Enhancement- enhancing the probability that an opportunity can eventually be ______ requires a proactive response such a response might be either ______ or ______.
Exploited
Strategic or tactical
Share - organisations involved in the project may collaborate in order to increase the chances of an opportunity being realised. Both parties may have to bear cost but then will share the _____ if the opportunity subsequently materialises in their favour.
Benefits
Rejection - usually if the opportunity is of little value or the work required to gain the result of the opportunity is considered too great a decision not to take _____of the situation will be chosen.
Advantage
Closure The final part of the management process to ensure that?
All risks are closed when they have occurred and successfully mitigated, been accepted or that there is not longer a possibility of them occurring.
Closure - at this stage it is useful to document information about the risk being closed for example any updated risk information, closure rationale and lessons learned. There are valuable benefits in fully understanding a risk , the approach to analysis how it was mitigated or what conditions have been met when closing a risk for
Future reference
The aim of effective risk management in any project should be to provide ________ to assist future project in their risk management. Having a prime source of base data from previous project when analysing a new risk provides a greater insight to decide actions to take risk ownership as well as improved cost estimates and likely benefits of mitigation plans
Lessons learned
At project closure there any open risks remaining the______ must ensure that these are communicated to those involved in the adoption phase
Project manager
The benefits of risk management : enables better informed and more believable plans , schedule and budgets
As soon as practicable the projects needs to plan what needs to be done , together with a prediction of what resources (time,cost and labour ) will be needed to achieve it. The use of risk management to identify risk factors and to allocate tolerances or contingency in respect of those risk helps create a more objective description of the tasks and the related budgets and schedules.
This gives more credibility to the plans, increasing stakeholder confidence of a positive result.
The benefits of risk management increases the likelihood of a project adhering to its schedule and budgets
Clearly the more realistic the project plans ( schedules , budgets) the more likely it is that the outcome will reflect those plan. Team members who believe that they have a hopeless task and expect to fail no matter how well they do will tend to be demotivated , giving them achievable targets in which they can believe will secure a greater levels of commitment leading to a high probability of success.
The benefits of risk management: allowing a more meaningful assessment and justification of contingencies
Many mangers apply blanket contingency levels on no better basis that gut feeling this often results in over or under provision and the ineffective application of scarce resources.
Risk management can identify and quantify the amount of contingency required to give an acceptable confidence level and the risk budget can be actively managed as the project proceeds. The overall budget for the project and especially the contingency fund can then be allocated to the prime areas of risk
The benefits of risk management: discourages the acceptance of finically unsound projects
The discipline of assessing the impact of possible risks to a project forces relaxin in the planning stage as risk analysis creates an early awareness of potential obstacles and opportunities.
In extreme cases risk analysis may reveal that a project cannot meets its objectives , it’s not feasible or is a potential threat. In these situation the organisation can decide not to bid or to pull out before resources are too heavily committed
The benefits of risk management: helps develop the ability of Stagg to assess risks
Several benefits may accrue to individuals as a result of being exposed to risk analysis on a project. The simple fact that risk analysis is being undertaken is enough to make people more aware that risk may and do exist in their area of influence.
As a result they tend to look out for them not only in the current circumstances but also when marking decisions for future activities. This awareness of risk therefore improves competence of people’s involved in preparing and executing plans.
Individuals may assess their own ability by predicting risks and then seeing how this preview compares with reality .
The benefits of risk management : facilitates greater risk taking thus increasing the benefits gained
Calculated risk taking has always been the basis of success. In the absence of formal risk management, however the outcome is unpredictable and opportunities remain unexploited.
By applying formal risk management techniques with appropriate mitigation and fallback plans an organisation can take greater levels of risk with lower level of contingency thus improving the overall return on investment.
In addition the proactive management of risk will remove some of the threats that would otherwise impact on the project and also realise some of the opportunities to improve the projects outcomes
The benefits on risk management: contributed to the build up of statistical information to assist in better management of future projects :
The same problems often arise on different projects Within the same organisation even in a company that has good internal communication. This is usually due to the learning curve experienced by many project staff as a result either of a transfer to new projects or promotion to new levels of responsibility.
Quite often, however it is because the decision makers set unrealistic expectations.
Formal risk analysis tighter with post -project review can provide a wealth of information in a form that can be used as a reference for staff and managers alike.
Issue management - an issue of ours when a problem that is _____ or is about to occour will breach delegated tolerances for work on a project or programme.
Immediate
Issue management - issue require support from the ______ to agree a _______. Issue are differentiated from problems that are dealt with on a day to day basis by the project manager and team.
Sponsor to agree a resolution.
Is is understandable that project might prioritise the management of issues ( ) over the management of risk ( ). A project where this is continually the case would suggest an underlying concern with project plans and controls.
(Problems now)
(Potential risks)
There is a process used to manage issues which ensure that : when an issue is identified it is logged in an __________ and analysis is performed quickly to understand the nature of the issue, it’s cause and impact if it is not resolved. The prioritisation of issues is based on the impact on success criteria and benefits for the work taking into account the relative priorities of scope, quality, time , cost and benefits in the business case.
Issue register/log
There is a process used to manage issues which ensure that : issues are escalated to the _____ who may in turn escalate them to the governance board for resolution
Sponsor
There is a process used to manage issues which ensure that : actions are assigned to the person or group who is best placed to address the issue and identify and implement a ______in a timely manner.
Resolution
There is a process used to manage issues which ensure that : issues that result in changes to scope or any other baseline plan are _____ through change control. As part of integrated planning, the limits of delegated authority are established and formal change control is required when these tolerance are breached
Progressed
There is a process used to manage issues which ensure that : the management of issues is tracked from __________ through to _________and closure including any change control and replanning of the deployment baseline and project management plan.
Identification through to resolution
Issue management is an important project control and effective implementation can be enhanced by engaging members of a project management office to help facilitate the necessary ________
Resolution
The role of contingency planning in projects: contingency is ?
Resource set aside for responding to identified risks
The role of contingency planning in projects: contingency is needed to ?
Match the gap between the ‘in-risked’ (deterministic) plan and the desired level of confidence.
The role of contingency planning in projects: in addition to contingency known for known risks ( sometimes referred to as risk budget) some organisations also hold a management _______ to make provision for unidentified risks or for those identified risk that have very low likelihood of occurrence but would have a very high impact if they did occur.
Reserve
Contingency is most typically expressed as?
Monetary value - an allowance for dealing with impacts on cost or financial benefits
Time - an allowance for dealing with impacts on schedule
Contingency planning: when using an iterative lifecycle is may be relevant to think of contingency in terms of _______ .
Scope/quality
- resource set aside to complete outputs to the desired specification.
Time boxes may also incorporate lower priority items that can be sacrificed to secure emerging priorities
The role of contingency planning in projects: it’s is normal in an organisation to perform probabilistic risk analysis using ________, then confidence levels in plans will typically be expressed in terms of _______. In other organisations, the qualitative risk analysis can be used to predict confidence levels with lower precision. Such ? ____
Monte Carlo stimulation
Probabilities
Looking at the expected value of the risk in the risk register or making an experience based judgement.
The role of contingency planning in projects: in all cases, contingency is clearly identified such as_____
An Identified line item in a budget, and additional time box, iteration in a schedule, or as a buffer to protect a critical chain of activity, contingency is not hidden extra time or money to deliver planned scope
The role of contingency planning in projects: it is normal for contingency to be held at different levels to deal with different sorts of risks and to support management of the contingent funds/times. Most organisations will proportion the contingency between the _______,______ or ________ and the ___________. Allocation of contingency reflects the level of control desired.
Project manager, project, sponsor or program manager under governance board.
