Operational Risk Business Intelligence Tools
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  • I would like to thank Asli Sari, Gagandeep Marwaha and the PMI Information Systems Local Interest Group for hosting this event.
  • My name is Desmond Alvares. I have an MBA and CMA with a focus in Finance, Accounting and Strategy as well as a B. Eng in Mechanical Engineering. I am also a Chartered IT Professional with the British Computer Society (BCS). The British Computer Society (BCS) is the industry body for IT professionals, and a Chartered Engineering Institution for Information Technology (IT). With members in over 100 countries around the world, the BCS is the leading professional and learned Society in the field of computers and information systems. Last year we opened our second chapter in Canada and this year are establishing one in the USA. Prior to entering consulting in 2002, I held Management positions with Canadian and International Banks. I have worked with Financial Service, Food and Beverage and Energy Resource companies to develop their Financial Systems and enhance their operations. I specializes in consulting and training in business intelligence, process improvement, risk management, strategic planning and project governance.
  • I am currently teaching at Ryerson University in the Project Management certificate continued education program and 3rd year Architecture students specializing in Project Management. Ryerson is a registered PMI education provide and I have helped a number of indivuals obtain their PMP. I have also helped CIBC implement a detailed methodology based on the PMI framework and UBS Private Banking deploy their Project Management methodology Internationally. I also on a contract with TD Securities on a compliance based project. I serve on the board of the Upper Canada Section of the BCS as Professional Development Officer, the Knight of Columbus, Council 13345 as Financial Secretary, Schulich Alumni Association and Ontario Special Olympics as Head Coach coordinator.
  • In this session I will describe the procurement process, including all of the activities that are necessary to obtain the goods and services required for a project.
  • Universities / Colleges offering course
  • “ The Ryerson Offer” What we will cover is a really a summary of the Introduction to the Procurement and Contracts course, that I have taught. The Procurement course is 14 weeks in length and is a core part of the Project Management Certificate. The certificate consits of eight courses in total. There are six core corses: (We refreshed the program in 2004, these are curently) And two Electives:
  • We did a survey in 2003/4 to find out what students think about the Ryerson offer
  • The objectives of the procurement process are to obtain the goods and services for a project in accordance with the Technical and Quality, Schedule, cost, and other performance objectives of a project. The broad objectives of the procurement process for any size project are the same. It is necessary to adequately control the Technical and Quality, Schedule, and cost performance of the suppliers and contractors on any type or size of project. Contract requirements for implementing the objectives will vary in accordance with the size of the project. Large complex projects will require a significant number of Technical/Quality, Schedule, and cost performance requirements. A proactive well organized and focused approach is vital to the achievement of the objectives of the procurement process. I would normally start my course with an opportunity for the students to voice what they expect to get out of the program and an understanding of what knowledge people have in the material. So lets set a baseline in terms of where the group is.
  • How many of you have been involved in obtaining goods and services from others. We can step back from our activity at work and just consider buying a house, car or things for a wedding. How many people have used a structured process to identify and select your final choice? (Listing – RFP, Offer - Proposal,counter offer - ,acceptance – Agreement,
  • Large number of groups involved in each of the basic steps in the procurement process for large projects. Project Management, Procurement, Engineering, Licensing, Marketing, Manufacturing, Construction, Testing, Operations, Quality, Accounting, Cost, Schedule, Finance, Legal, Risk Management. Small project will not have as many separate groups and will have some responsibilities combined such as quality, cost, schedule which would be carried out by PM or Eng. for example. Regardless PM is responsible for managing the procurement activities of all of the groups in a manner that achieves the projects objectives. To obtain the necessary input from the project groups the PM must have sufficient authority over these groups, Interface With Other Project Processes 1. Integration with Design Processes - design produces the documents that define the technical scope of the project. PM is responsible for assuring that the manner in which the RFP's for major contracts are scoped is consistent with the way in which the design documents are prepared. Coordination of design information from Eng. Materials, Equipment and service contractors is the responsibility of the PM, Eng, Procurement groups. 2. Integration with Licensing Processes - The licensing process obtains the necessary government licenses and permits. Not every project requires licenses but the ones that do have to expend a considerable effort in defining and fulfilling the licensing requirements. PM Licensing and Eng. Management are responsible for clearly defining the in the RFP.

Operational Risk Business Intelligence Tools Presentation Transcript

  • 1. Ryerson University Project Management Certificate Procurement and Contracts Overview presented to the PMI-ISLIG Nov 11, 2004 by Desmond P. Alvares [email_address] 416 258 7178
  • 2. Introduction – Who Am I
    • Desmond P. Alvares B. Eng., MBA, MBCS CITP, CMA
    • Degree in Mechanical Engineering - UK
    • MBA at Schulich School of Business, York University
      • Finance, Accounting and Strategy
    • Certified Management Accountant - Ontario
    • Chartered Information Systems Practitioner – UK (2001)
    • Chartered IT Professional – UK (2004)
    • 19 years Business Intelligence and Knowledge Management in Canada, UK, US, Switzerland and Caribbean
    • 10 years Investment Banking (Brokerage Houses, Private Banking and Oil &Gas trading)
    • 6 years Retail Banking (Technology Business Management, Operational Risk, Electronic Banking and Mortgages, Finance and Treasury Systems)
    • 3 years Property and Casualty Insurance (Finance and Actuarial Systems)
  • 3. Introduction – PM Background
    • Financial Systems Implementations
    • Business, Training, Finance and Treasury Projects
    • Internal and Client Facing Projects
    • Internal Providers and Integration of Vendor Solution
    • Introduced and Developed Project Management Methodology – UBS Private Banking (International locations base on Swiss framework) and CIBC Retail (PMP based on the PMI framework)
    • Lecturer at Ryerson University – Project Management Certificate (Construction, IT and Financial Service students) and Architecture specialization in Project Management.
  • 4. Agenda
    • Introduction
    • The Certificate Program at Ryerson
    • The Procurement Process
    • Planning
    • Solicitation
    • Source Selection
    • Contract Administration
    • Close-out
  • 5. Other Offerings of Project Management Courses
    • Athabasca University
      • Executive MBA in Project Management (on-line and residence)
    • Centennial College
      • Project Management Certificate (6 courses)
      • Advanced Project Management Certificate (4 courses)
    • Durham College
      • Intro, Scheduling Software, Statistics
    • Humber College
      • Project Management Certificate (4 courses, 45hrs)
    • University of Toronto
      • Project Management Certificate (4 courses, full day)
    • York University
      • The Graduate Certificate in Project Management (8 courses)
  • 6. The Ryerson Offer (8 Courses)
    • Core Courses
      • CKPM202 Fundamentals of Project Management
      • CKPM203 Planning and Scheduling
      • CKPM205 Procurement and Contracts
      • CKPM209 Project Risk and Quality Management
      • CKPM210 Project Leadership
      • CKPM211 Project Cost Management
    • Electives
      • CKPM207 Project Management Systems
      • CKPM208 Analytical Decision Making
      • CCMN114 Short Management Reports
      • CCMN432 Technical Communications
      • CMHR405 Organizational Behaviour and Interpersonal Skills
      • CQMS102 Business Statistics I
  • 7. The Students View
    • 570 surveys distributed to students, 271 returned
    • 164 surveys to graduates, 24 returned
    • Students select Ryerson first and then the Certificate Course 75% (Ryerson Website, Ryerson material)
    • 44.6% in Project Manager or Project Coordinator positions
    • Experience 80% (> 5 Years), 25.1% (> 15 Years)
    • 85% interested in becoming professional in 2 years
    • 85.2% using certificate as preparation, but lack work experience
    • Graduates (61.9% PMI members, 25% PMP), 75% additional prep
    • Risk, cost and planning / scheduling – more theory than practice
    • Interest in PMO, Leadership and Communication
    • Common text book required, introduce PMP Preparation
  • 8. Definition of the Procurement Process
    • Objectives
      • Technical & Quality
      • Schedule
      • Cost
  • 9. Basic Steps
    • Define the Goods and Services to be procured
    • Select bidders and Complete Request for Proposal
    • Prepare Bids and Award Contract
    • Contract Management
    • Close out Contact
  • 10. Other Aspects
    • Role of Project Management
    • Interfaces with Other Project Processes
    • Importance of Management
    • Ethical Practices
    • Principle Types
      • Standard, Material, Equipment & Services
    • Definitions of Common Terms
  • 11. Organizations for Procurement
    • Organization
      • Project Managers responsibility
      • Procurement department – purchasing & materials
      • Responsibilities
      • Staffing – direct and matrix
      • Procedures
        • Requests, Qualified Bidders, RFP, Contact Management
      • Management Program
  • 12. Procurement Considerations
      • What to Procure?
      • How much to procure?
      • When to procure?
      • Selecting an appropriate method of procurement.
      • Qualifying suppliers.
      • Developing a contracting strategy.
      • Establishing appropriate performance measures.
      • Documenting the procurement project plan.
  • 13. 12.1 Plan Purchase and Acquisition (Procurement Planning) Project Management Book of Knowledge Chapter 12 Project Procurement Management 12.1 Plan Purchase and Acquisition 12.2 Plan Contracting 12.3 Request Seller Responses 12.4 Select Sellers 12.5 Contract Administration Contract Closure
  • 14. Inputs Project Charter Project Scope Statement Project Management Plan WBS and Dictionary Environment and Organization Factors Organizational Process Assets Risk Register Tools & Techniques Make-or-Buy Analysis Expert Judgment Contract Types Outputs Procurement Management Plan Contract Statement of Work Make or Buy Decision Project Management Plan (Updates) 12.1 PLAN PURCHASE AND ACQUISITION
  • 15. 12.1.1 Inputs to Plan Purchase and Acquisition
    • .1 Project Charter
      • Business needs
    • .1 Project Scope Statement
      • Project needs and strategies
    • .2 Project Management Plan
      • Overall plan for the project
  • 16. 12.1.1 Inputs to Plan Purchase and Acquisition
    • .3 Work Breakdown Structure and Dictionary
      • Relationship of all elements in plan
    • .4 Environmental and Organizational Factors
      • What is available in the marketplace?
      • Procurement resources available
  • 17. 12.1.1 Inputs to Plan Purchase and Acquisition
    • .5 Organizational Process Assets
      • Informal and formal procurement processes
    • .6 Risk Register
      • Risks , categorization and their mitigation
  • 18. 12.1.2 Tools & Techniques for Plan Purchase and Acquisition
    • .1 Make-or-buy analysis
    • .2 Expert judgment
    • .3 Contract type selection
  • 19. 12.1.2.1 Make or Buy Analysis
    • Factors to analyze:
        • Cost (direct and indirect - lifecycle costs)
        • Schedule
        • Quality
        • Capability & availability of in-house resources
        • Supplier skills and abilities
        • Degree of control needed by the performing organization
  • 20. 12.1.2.2 Expert Judgement
        • Other Departments
        • Consultants
        • Professional and Technical Associations
        • Industry groups
  • 21. 12.1.2.3 Contract Types
    • Three broad categories of contract type:
        • Fixed price or lump sum
          • FFP
          • FPPI
        • Cost reimbursable
          • CPFF
          • CPPF
          • CPIF
        • Time and Materials (Unit Price)
  • 22. Scope of Work Information Very Little Partial Complete Uncertainty Degree of Risk Suggested Risk Allocation Contract Types HIGH HIGH MODERATE MODERATE LOW LOW Contract Type vs. Risk Allocation CPPF: Cost + % Fee CPIF: Cost + Incentive Fee CPFF: Cost + Fixed Fee FPPI: Firm Price + Incentive Fee FFP: Firm Fixed Price CPPF CPIF CPFF FPPI FFP 100% 0% Buyer 100% 0% Seller
  • 23. 12.1.3 Outputs from Plan Purchase and Acquisition
    • .1 Procurement management plan
    • .2 Contract Statement(s) of work
    • .3 Make-or-Buy Decision
    • .4 Project Management plan (update)
  • 24. 12.1.3.1 Procurement Management Plan
    • Defines procurement process
        • Basic requirements
        • Products/services list to procure
        • Roles and responsibilities
        • Budget
        • Schedule
        • Quality criteria
        • Specifications
        • Contract type to be used
  • 25. 12.1.3.2 Contract Statements of Work
    • A narrative description of the product
    • Clear, concise and as complete as possible
    • Sufficient detail
    • Allows prospective sellers to determine whether they are capable of providing the product
    • Could be revised and refined throughout the procurement process
  • 26. 12.2 Plan Contracting ( Solicitation Planning) Project Management Book of Knowledge Chapter 12 Project Procurement Management 12.1 Plan Purchase and Acquisition 12.2 Plan Contracting 12.3 Request Seller Responses 12.4 Select Sellers 12.5 Contract Administration Contract Closure
  • 27. 12.2 Plan Contracting
    • Preparing the documents needed to support the solicitation process
  • 28. Inputs Procurement Management Plan Contract Statements of Work Project Management Plan Make-or-Buy Decision Tools & Techniques Standard Forms Expert Judgment Outputs Procurement Documents Evaluation Criteria Contract Statement of Work (Updates) 12.2 PLAN CONTRACTING
  • 29. 12.2.1 Inputs to Plan Contracting
    • .1 Procurement Management Plan
    • .2 Contract Statement(s) of work
    • .3 Project Management Plan
    • .4 Make-or-buy Decision
  • 30. 12.2.2 Tools & Techniques for Plan Contracting
    • .1 Standard forms
      • Standard contracts, bid documents
    • .2 Expert judgement
  • 31. 12.2.3 Outputs from Plan Contracting
    • .1 Procurement documents
    • .2 Evaluation criteria
    • .3 Contract Statement of work updates
  • 32. 12.2.3.1 Procurement Documents
    • Documents used to solicit proposals from prospective vendors
        • Request for Proposal (RFP), Quote(RFQ) or Bid (RFB)
        • Instructions (e.g. desired form of response)
        • Blank contract form
        • Product description or SOW
        • Contractual provisions
        • Terms and conditions
  • 33. 12.2.3.2 Evaluation Criteria
    • Criteria used to create or score proposals
    • Objective vs. subjective
    • Weigh the criteria in terms of importance
  • 34. 12.3 Request Seller Responses (Solicitation) Project Management Book of Knowledge Chapter 12 Project Procurement Management 12.1 Plan Purchase and Acquisition 12.2 Plan Contracting 12.3 Request Seller Responses 12.4 Select Sellers 12.5 Contract Administration Contract Closure
  • 35. 12.3 Request Seller Responses
    • Obtaining the information (bids and/or proposals) from the prospective sellers
    • Most of the actual effort is done by the sellers
  • 36. Inputs Procurement Documents Organizational Process Assets Tools & Techniques Bidders Conference Advertising Outputs Qualified Sellers List Procurement Document Package Proposals 12.3 REQUEST SELLER RESPONSES
  • 37. 12.3.1 Inputs to Request Seller Responses
    • .1 Procurement documents
    • .2 Organizational Process Assets
  • 38. 12.3.2 Tools & Techniques for Request Seller Responses
    • .1 Bidder conferences
        • Used to ensure that all prospective sellers have a common understanding of the procurement
    • .2 Advertising
        • Used to expand the list of potential sellers
        • Sometimes required on public projects
  • 39. 12.3.3 Outputs from Request Seller Responses
    • .1 Qualified seller lists
        • Internally maintained lists
        • List developed by the project team
    • .2 Procurement Documentation Package
    • .3 Proposals
        • Seller-prepared documents that describe the seller’s ability and willingness to provide the requested product
  • 40. 12.4 Select Sellers ( Source Selection ) Project Management Book of Knowledge Chapter 12 Project Procurement Management 12.1 Plan Purchase and Acquisition 12.2 Plan Contracting 12.3 Request Seller Responses 12.4 Select Sellers 12.5 Contract Administration Contract Closure
  • 41. 12.4 Select Sellers
    • Receipt of bids or proposals
    • Application of the evaluation criteria to select a provider
        • Risk evaluation, lifecycle cost, independent estimates
    • Contract negotiations
    • Award the contract
  • 42. Inputs Proposals Evaluation Criteria Organizational Process Assets Risk Register Risk-Related Contractual Agreements Qualified sellers List Procurement Document Package Tools & Techniques Weighting System Independent Estimates Screening System Contract Negotiation Outputs Selected Sellers Contract Contract Management Plan 12.4 SELECT SELLERS
  • 43. 12.4.1 Inputs to Select Sellers
    • .1 Proposals
    • .2 Evaluation Criteria
    • .3 Organizational Process Assets
    • .4 Risk Register
    • .5 Risk Related Contractual Agreement
    • .6 Qualified Sellers List
    • .7 Procurement Documentation Package
  • 44. 12.4.2 Tools & Techniques for Select Sellers
    • .1 Weighing system
      • Method for quantifying qualitative data
      • Minimize the effect of personal prejudice
    • .2 Independent estimates
      • Procuring organization may prepare its own estimates as a check on pricing
    • .3 Screening system
      • Establishing minimum performance requirements for evaluation criteria
  • 45. 12.4.2 Tools & Techniques for Select Sellers
    • .4 Contract negotiation
        • Involves clarification and mutual agreement on the structure and requirements of the contract
        • Final contract to reflect all agreements reached
        • Examples of subjects covered: responsibilities & authorities, terms and law, contract financing, price
  • 46. 12.4.3 Outputs from Select Sellers
    • .1 Select Sellers
    • .2 Contract
        • Mutual agreement which obligates the seller to provide the specified product and obligates the buyer to pay for it.
        • Legal relationship subject to remedy in the courts
        • Contract =agreement=subcontract=purchase agreement=memorandum of understanding
    • .3 Contract Management Plan
  • 47. 12.5 Contract Administration Project Management Book of Knowledge Chapter 12 Project Procurement Management 12.1 Plan Purchase and Acquisition 12.2 Plan Contracting 12.3 Request Seller Responses 12.4 Select Sellers 12.5 Contract Administration Contract Closure
  • 48. 12.5 Contract Administration
    • Ensuring that the vendor’s performance meets contractual requirements
    • Application of project management processes to the contractual relationship
      • Project plan execution
      • Performance reporting
      • Quality control
      • Change control
      • Communication management
  • 49. Inputs Contract Approved Change Requests Work Performance Information Selected Sellers Tools & Techniques Contract Change Control System Buyer-Conducted Performance Reviews Inspections and Audits Performance Reporting Payment System Claims Administration Records Management System Outputs Organizational Process Assets (updates) Requested Changes Recommended Corrective Actions Contract Documentation 12.5 CONTRACT ADMINISTRATION
  • 50. 12.5.1 Inputs to Contract Administration
    • .1 Contract
    • .2 Performance Reports
        • Which deliverables completed, not completed
        • To what extent quality standards are being met
    • .3 Approved Change requests
        • Modifications to the terms of the contract or to the description of the product or service
        • Contested changes where the seller and project management team cannot agree on compensation for the change are also called claims, disputes or appeals
    • .4 Work Performance Information
    • .5 Selected Sellers
  • 51. 12.5.2 Tools & Techniques for Contract Administration
    • .1 Contract change control system
      • the process by which the contract can be modified
    • .2 Buyer-Conducted Performance Reports
      • Information about how effectively the seller is achieving the contractual objectives
    • .3 Inspection and Audits
  • 52. 12.5.2 Tools & Techniques for Contract Administration
    • .4 Performance Reporting
    • .5 Payments System
    • .6 Claims Administration
    • .7 Records Management System
  • 53. 12.5.3 Outputs from Contract Administration
    • .1 Organizational Process Assets (updates)
      • Correspondence
        • Written documentation of certain aspects of buyer/seller communications
      • Payment schedule and requests
    • .2 Contract changes
    • .3 Recommended Corrective Actions
    • .4 Contract Documentation
  • 54. 12.6 Contract Closure Project Management Book of Knowledge Chapter 12 Project Procurement Management 12.1 Plan Purchase and Acquisition 12.2 Plan Contracting 12.3 Request Seller Responses 12.4 Select Sellers 12.5 Contract Administration 12.6 Contract Closure
  • 55. 12.6 Contract Close-out
    • Product verification
      • Was all work completed correctly and satisfactorily
    • Administrative close-out
      • Updating records to reflect final results
      • Archiving of information for future use
  • 56. Inputs Contract Documentation Contract Closure Procedure Tools & Techniques Procurement Audits Records Management System Outputs Organizational Process Assets (updates) 12.6 CONTRACT CLOSE OUT
  • 57. 12.6.1 Inputs to Contract Close-out
    • .1 Contract documentation
      • Contract
      • Supporting schedules
      • Requested and approved contract changes
      • Seller-developed technical documentation
      • Seller performance reports
      • Financial documents
      • Results of contract related inspections
    • .2 Contract Closure Procedure
  • 58. 12.6.2 Tools & Techniques for Contract Close-out
    • .1 Procurement audits
      • Structured review of the procurement process
      • Identification of successes and failures
    • .1 Records Management System
  • 59. 12.6.3 Outputs from Contract Close Out
    • .1 Organizational Process Assets (Updates)
      • Contract File
        • Documentation for Archives and Future Use
      • Formal acceptance and closure
        • Hand over of Project and acceptance by authorized authority
      • Lessons Learned Documentation
        • Process improvements recommendations
  • 60. Procurement Management Plan
    • The plan describes how the procurement process, from solicitation to contract close out, is managed. Included in this plan are:
    • The type(s) of contract(s) used.
    • If independent estimates and cost proformas will be done and who will do them.
    • If standard procurement documents will be used, and if so, who will prepare them.
    • Who will manage & coordinate the procurement of these goods, services or products.
    • Authority of the people involved in the process and defined lines of communication.
  • 61. Procurements and Contract Overview
    • Thank You to PMI - ISLIG
    • Any Questions?
    • Desmond P. Alvares
    • 416 258 7178
    • [email_address]