risk

Project Risk Identification for New Project Manager

Posted on by ricardo598fall15

Rajman Md Rawi on his article “Project Risk Identification for New Project Manager” for PM Times gives us a few tips to identify risks as a project manager.

It starts the article with a very clear definition of Project Risk Management, taken from the book Project Management Institute. A Guide to the Project Management Body of Knowledge “Project Risk Management includes the processes of conducting risk management planning, identification, analysis, response planning, and controlling risk on a project. The objectives of project risk management are to increase the likelihood and impact of positive events, and decrease the likelihood and impact of negative events in the project.”

Then Rawi gives us a few tools/techniques to identify risks like: Documentation Reviews, Information Gathering Techniques – Brainstorming, Delphi Technique, Interviewing, Root cause analysis, Checklist analysis – previous similar project, lowest level RBS, Assumption analysis, Diagramming Techniques – cause and effect diagram, system and process flow chart, influence diagrams, SWOT Analysis and Expert Judgment.

He also gives us 5 categories of potential risk that a project could be exposed: Human Resources & Contractors Risk, Customer Risk, Product/Technology Risk, Requirement Risk, Schedule Risk.

Schedule Risk, he advise us to be aware when our schedule is not realistic,  we have a missing task in the schedule, we don’t take on account a potential delay in one task that could delay other tasks in the future, and unfamiliar areas of the product that could take more time that initially though due design and implementation.

Requirement Risk, he recommend to be alert to continuing changes in requirements, requirements poorly defined, some areas of the product could be more time-consuming than others, we are only aware of some requirements when the project start, and total features could be more than what the development team can deliver at the time.

Project Management Risk, he mention that the project manager could have little authority in the organization and low power to influence decision-making and resources, priorities change during the project, we have to clearly defined evaluation criteria for every project phase, we have to be aware that multiple projects within the same company could need the same resources at the same time. And that sometimes the date is driven by marketing demo, tradeshows or other events and not been taking under consideration project teams estimates

Product/Technology Risk, we have to be vigilant that development of the wrong user interface, application or program could result in redesign and implementation errors. Development of extra software functions that are not required could extend the schedule. You could depend in technology that is still under development. And the technology selected could be a problem to the customer

Customer Risk, customer could insist on new requirements or other technical decision, Customer review/decision cycles for plans, prototypes, and specifications could be slower than expected. Even if you product meets all specifications, the customer could not accept the product. And Customer has expectations for development speed that developers cannot meet.

Human Resources & Contractors Risk, Critical development work is being performed by one developer, some developers or contract personnel may leave the project before it is finished, hiring process takes longer than expected, Personnel need extra time to learn unfamiliar software tools, hardware and programming language, there could be conflicts among team members result in poor communication, poor designs, interface errors and extra rework. When looking for new personnel, there is a risk that you cannot find someone with critical skills needed. And contractor could not deliver components when promised.

I agree with his conclusion, I also think that in order to manage and successfully complete a project we have to be able to identify risks and have to be proactive to mitigate the negative impacts that those risks could have, and make a routine out of identifying risk because as he explains, risk can be change throughout the project and vary their importance.  The only statement that I disagree is “we should not spend too much time in identifying risks”. Even though it could be time consuming I think that, you should spend time identifying risks to mitigate future negative outcomes.

 

References 
PMBOK; 2013 ; Project Management Institute. A Guide to the Project Management Body of Knowledge (PMBOK Guide) – Fifth Edition
Donna Ritter; 2013; Identifying Risks in Your Project. Retrieved 15 December 2013, available fromhttp://certifedpmp.wordpress.com/2008/10/13/identifying-risks-in-your-project/

Article: http://www.projecttimes.com/articles/project-risk-identification-for-new-project-manager.htm

Risky Business

Posted on by kathleen598sum15

 

This week in class we had to turn in our risk assignment for our fundraiser project.  As a financial analyst I work closely with risk on a daily basis.  Something we touched on in class when we created the risk was just the basics. What sort of risk, probability, value of the risk and contingency plan.  In reality, there is so much that goes into risk.  That it why I chose to research risk and see what else there is to know about risk.  I found a great article that talked about the fluidity of risk. The project management realm deals with an ever changing environment, which means risk is changing on an almost daily basis as well.  In my business, the programs I work on are very complex, which makes risk management and analysis complex as well and needs to be continuously re-visited and re-analyzed.

When creating our risk at my company, we don’t know how many out of box failures we may have on a program.  We don’t know how many parts might fail.  That is why over time, it is pivotal to continue to re-visit our risk.  Something I use in my job is called a “gating month”.  It is a month when we think our risk will be retired or OBE (overcome by events).   That being said, looking at risk on a daily basis is so important to monitoring project health.  As a project progresses and evolves, potentially so does the risk.

A personal example from my job as a financial analyst on government programs has to do with gating months.  For example, on my current program, we build and deliver hardware to the customer.  Because of that, a risk we carry has to do with our second sourced suppliers.  If a supplier who makes a part for our hardware build goes out of business or stops making the part, we need to be prepared for the costs that will go into replacing that part.  That includes finding another supplier, validating them and then potentially modifying the part to our specs.  This isn’t just a risk we carry throughout the entire program.  Over time, as we deliver hardware, this risk becomes smaller and smaller.  Why carry risk for 500 deliveries when we only have 50 left?  That is why, as a financial analyst, I work with the PMO to analyze our delivery schedule in relation to our risk items.  I help plan when this risk item should be reduced and when it will be OBE. When that happens the PMO needs to make an important decision.  Do we want to retire the risk to our bottom line or do we want to re-visit the program health and plan risk items for other problems that, over time, have now presented itself?

I have learned through personal experience, class and this article that risk is something that needs to be looked at continuously.  It needs to be managed daily and analyzed daily for any changes to the project and its environment.  It needs to be reduced or increased.  It needs just as much attention as the project execution itself.  In the article I read I found a great chart that shows the fluidity and cyclical nature of risk management and risk analysis:

 

Now a few questions on risk management and risk analysis:

1. Do you use risk at your job?  What sort of risk management and analysis do you perform?

2. Have you experienced a unique risk circumstance? What happened and what did you learn from the experience?

3. Do you have anymore insight and input into risk management and analysis?

4. Any other questions and comments are welcome!

 

http://www.pmoplanet.com/cross-discipline-elements/risk-management/

Will the Curse of the Billy Goat be Broken?

Posted on by izzydelly

“THE CUBS AIN’T GUNNA WIN NO MORE!”

This statement has actually held true for the last 67 years. The Curse of the Billy Goat was supposedly placed on the Chicago Cubs in 1945 when the owner of Billy Goat Tavern was asked to leave the stadium because his pet goat stunk. To this day, it has been 105 long, sad years since our very own Chicago Cubs have won a World Series.

 

 

Can the curse be broken? It was announced Monday that the Cubs have come to an agreement with the city for a $500 million privately financed renovation of the historic Wrigley Field. They plan to use this money to redesign the locker rooms, revamp the food services, and build a new hotel and office building. They also said this renovation would bring jobs to the city and a better experience for the fans. Team Chairman Tom Ricketts even went further to say, “If this plan is approved, we will win the World Series.” As owner of this organization, Ricketts must make a change in order to keep the team alive.  They cannot continue with their same routines and expect to become a better team.

 The picture to the left shows owner of Billy Goat Tavern William “Billy” Sianis and his pet goat being denied into the game

 

The question that remains is do we want this renovation to take place or not? Is upper management making a cost effective and efficient decision? Or does this project contain too much risk that it could ruin the organization completely? I believe this could be a cost effective decision if the team starts winning some games. If the players are somehow motivated by a new stadium and can play more cohesively as a team, more people will attend the games, revenues will boost, and therefore this project would be worth it. This project can also contain a great amount of risk. If the team does not do well, many fans would be upset that the historical Wrigley Field was renovated for nothing.

As a Wrigleyville resident, I believe that the renovations would be somewhat of a nuisance. All of that construction going on right in my backyard is something I would not like to deal with. Management would have to find a way to keep the residence of Wrigleyville happy. On the other hand, if what they say is true and these renovations will bring jobs to the city and therefore boost the economy, I would not be opposed to that.

 

 

Another aspect to consider is the view of Tom Ricketts. As owner, he has a duty to create a successful team. What have the managers and owners done so wrong that this team has not been able to win for so long? Is there even any fault to be put on the managers and owners? I believe at least some of the fault can be put on the managers, but the players as well. It is their job as professional baseball players to win games.

 The picture to the right shows possible renovation ideas

 

The bottom line is that the Cubs need to win a World Series. How are they going to do this? What steps must management take in order for this project to work? Will renovating the field finally kill the Curse of the Billy Goat? Or will the curse live on…

SOURCES:

http://online.wsj.com/article/SB10001424127887324485004578425101880334958.html?mod=WSJ_business_whatsNews

Citation:
Barrett, Joe. “Cubs Owner: Wrigley Plan ‘Will Win the World Series’.” Wall Street Journal. Dow Jones & Company, Inc, 15 Apr 2013. Web. 17 Apr 2013.

http://www.billygoattavern.com/legend/curse/

A weak link in the chain

Posted on by f1224drogala

Companies all of the world have created enormous supply chains to meet the ever increasing demand of the public. These supply chains are global and consist of manufacturers from many parts of the world. As we have learned in Chapter 2, Globalization is a big part of the operations strategy for many companies as it is a great way to increase profits and grow your whole company. Improving a supply chain is usually done by locating facilities closer to unique resources which in turn lowers the costs of production and allows for more profits. Steve Culp, the author of the article “Supply Chain Risk a Hidden Liability for Many Companies”, explains that  global supply chains have a risk factor involved that companies should pay attention to. This risk factor is what creates the weak link in the chain.

The risk factor is created by the possibility of disastrous events. Whether it be an earthquake, a flood, or a tsunami, the results are devastating. As an example, the article states that the flooding in Thai created shortages in hard drives that lead to millions of dollars worth of losses for electronics manufacturers. Surely this can null any previous savings that are established by outsourcing part of the production process, but at the same time this risk needs to be looked at face value. Companies need to balance the efficiency and low cost that they desire with the risk that they are willing to take. The article gives a couple of suggestions on how to assess this supply chain risk. Out of all of the points, one stands out the most. Companies should integrate risk management into operations planning and management. This would allow risk to flow into key supply chain decisions. If supply chain risk is accounted for, companies could even set some of their profit aside as a way of dealing with the potential loss in the future.

It is all seemingly  based on luck. Take two hypothetical companies, Company A and Company B. Company A only focuses on low cost and chooses suppliers based on that factor while Company B chooses suppliers based on cost and risk. If no tragic events happen, Company A will be in the better position in the marketplace and make more profit. However if tragic event halt the production of Company A’s suppliers, Company A could possibly lose millions of dollars which could result in a net loss during the current period. Because of the random factor of these events, I think that many companies will opt to just ignore the risk involved and focus on making as much profit as they can. In my opinion, ignoring this risk would be a big mistake.

What do you think, should companies incorporate supply chain risk into their key decisions on which suppliers to use?

Source: http://www.forbes.com/sites/steveculp/2012/10/08/supply-chain-risk-a-hidden-liability-for-many-companies/

Jobs Running Away

Posted on by f1222sghatila

Jobs Running Away

Outsourcing is something that we are use in the United States because our labor is too expensive. In business, we find the most effective, efficient, and the cheapest way to go with our operating cost. Outsourcing is one way to cut labor cost in production and services and provide the same results.  There are many advantages of outsourcing not just cutting cost but also maintaining a competitive advantage than competitors with the same product. A company like Nike who outsources to China, Indonesia, and Vietnam are gaining an advantage for the price but many disadvantages as well. Outsourcing is an advantage for immediate but in the long run this decreases jobs domestically and creates many risks. Ricks contain ‘inappropriate planning and analysis’ because of corrupt or local government rules, managers that might not be capable, and employees only working because that’s the only earning they will receive. Outsourcing not only impacts domestic jobs but overseas because if the company were to decide to leave that would demolish their economy in some counties.

Indiana is planning to outsource their State Lottery operations, it is currently postponed but like many other operations, they want to pass it to larger vendors. They want to determine if this will be beneficial to them to gain more money or suppress their gain. They want to use outsourcing for their advantage in improving operating and service, and for outside technology and expertise which they believe will bring more people to play the lottery and help the state. Even though many other states have outsourced their lottery services with Indiana will become 95%.

Operations has much to do with maintaining and process where for the overall product or services can provide a better, shorter, and cheaper outcome for the business to grow. Outsourcing is one big operation in which product are shipped overseas for their cheap labor or technology and brought back to be sold domestically. Strategically they have to plan if this will help with the future growth because it is a large investment or they will have to spend even more backsourcing.

I believe a lot of strategic planning that goes into deciding whether a company should outsource. Even though I believe keeping is domestic, will have the local jobs and grow our economy. Even though many companies find it as an advantage to ship the labor I think ethically, paying the workers domestically will help with the current or future recession and avoid the risks and disadvantages that goes into outsourcing. Do you think ethically outsourcing is a good plan for any product or services?

http://www.businessweek.com/ap/2012-09-26/panel-delays-vote-on-outsourcing-ind-dot-lottery

Forecasts vs. rumors

Posted on by Ali Almahdi

Corporations like Apple, Samsung and Motorola; we hear rumors about them all the time. Like Apple with the iPhone 5, and Samsung with the new S3 and Motorola with the new Atrix 3.

I still can’t forget when everyone I know didn’t buy their iPhone 4 waiting for iPhone 5 and they were disappointed with the iPhone 4s. And now, the same thing is happening, people who are about to upgrade their phones and didn’t buy the S2 saying they’ll wait for the new Galaxy S3 and or iPhone 5.

Since I am obsessed with technology, and I keep up to date by buying the latest gadgets in the market. And while doing this course, during class when we were talking about product cycles and inventory management, I began wondering. At that very moment, I remember when I was thinking in my own world, when my teacher asked me a question that I didn’t pay attention to, and I had to ask her to repeat the question again. It was about the product life cycle and how short it is with technology.

Then during class, we started looking at the forecasting time horizon, during this part of the discussion; I was wondering what is their forecast period? Short?

We move on to the forecast methods, and during that very specific part I was trying to see which method they could possibly use? I know as the Professor said, forecasts are seldom perfect. However, they need some kind of forecast to keep the inventory right.

Immediately two blog posts of my colleagues came to my mind. First, Car dealerships with zero cars to sell. Corporations like Apple and Samsung do not want to be like those dealerships.

Second, Why Guess When You Can Forecast?

I quote from my colleague post:

“The mistake our team made was to purchase the product inventory from manufacturing companies without accurately forecasting the demand for those products.

The result? We ended up with far more inventory than we could sell. Food products are perishable; their expiration deadlines are much shorter than for other consumer goods. As those expiry dates approached, a considerable percentage of the inventory we had bought was wasted in our own warehouse. Needless to say, the company suffered some heavy losses.”

I think those corporations deal with this situation very frequently, in fact, the news of the S3 affected the iPhone 4s sales in some regions specifically in Bahrain. I do not have data to back my theory but I have seen this happening.

I wonder how does corporations like Apple deal with those rumors? How can they forecast the demand on the existing products when there is a rumor about a new product? I believe those corporations are living on the edge with their products and forecasts. They probably calculate the risk and add it to the product price to cover the forecast loses? I don’t know. But I can tell you this, it must be really hard.