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CSE 4316 Risk Managment.ppt
 

CSE 4316 Risk Managment.ppt

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    CSE 4316 Risk Managment.ppt CSE 4316 Risk Managment.ppt Presentation Transcript

    • Risk Management Instructor: Mike O’Dell This presentations was derived from the textbook used for this class: McConnell, Steve, Rapid Development , Chapter 5.
    • Systems Design Project Are Risky
      • The odds of a large project being cancelled due to risks encountered: 50%
      • The odds of a large project finishing on time are close to zero!
      • Pete Marwick (1988): 35% of companies studied had at least one “ runaway project ”
        • Allstate office automation
          • 5 year/$8M … 6+ years/$100M
        • Westpac Banking Corporation info systems
          • 5 year/$85M… 3years/$150M later: cancelled
    • Why Do Projects Fail?
      • Generally, from poor risk management
        • Failure to identify risks
        • Failure to actively/aggressively plan for, attack and eliminate “project killing” risks
      • Risk comes in different shapes and sizes
        • Schedule risks (short to long)
        • Cost risks (small to large)
        • Technology risks (probable to impossible)
    • Case Study 5-1: What can go wrong?
      • What type of project is this?
      • How difficult does it appear to be, on the surface?
      • What classic mistakes do you see along the way?
      • Where/when/how could the risks have been better managed?
    • Elements of Risk Management
      • Managing risk consists of: identifying , addressing and eliminating risks
      • When does this occur?
          • (WORST) Crisis management/Fire fighting : addressing risk after they present a big problem
          • (BAD) Fix on failure : finding and addressing as the occur.
          • (OKAY) Risk Mitigation : plan ahead and allocate resources to address risk that occur, but don’t try to eliminate them before they occur
          • (GOOD) Prevention : part of the plan to identify and prevent risks before they become problems
          • (BEST) Eliminate Root Causes : part of the plan to identify and eliminate the factors that make specific risks possible
    • Elements of Risk Management
      • Effective Risk Management is made up of:
        • Risk Assessment: identify, analyze, prioritize
        • Risk Control: planning, resolution, monitoring
      RISK MANAGEMENT RISK CONTROL RISK ASSESSMENT IDENTIFICATION ANALYSIS PLANNING PRIORITIZATION RESOLUION MONITORING
    • Risk Assessment Tasks
      • Identification : produces a list of risks that have potential to disrupt your project’s schedule
      • Analysis : assesses the likelihood and impact of each identified risk, and the risk levels of possible alternatives
      • Prioritization : prioritizes the list by impact
        • serves as the basis for risk control tasks
    • Risk Control Tasks
      • Planning : produces your plan for dealing with each risk
        • Must ensure consistency of the risk management plan with your overall project plan
      • Resolution : executing your plan to deal with the risks
      • Monitoring : staying on top of your plan and re-evaluate for new risks
      • Most common schedule risks
        • Feature creep
        • Gold-plating (requirements/developer)
        • Shortchanged QA
        • Overly optimistic schedules
        • Inadequate design
        • Silver-bullet syndrome
        • Research-oriented development
        • Weak, poorly-trained personnel
        • Contractor failure
        • Friction between developers & customers
      Risk Identification CLASSIC MISTAKES
    • Risk Identification
      • Use Table 5-3: Potential Schedule Risks
        • Schedule Creation
        • Organization and Management
        • Development Environment
        • End-users
        • Customer
        • Contractors
        • Requirements
        • Product
        • External Environment
        • Personnel
        • Design and Implementation
        • Process
    • Risk Analysis: Exposure Table
        • Analyze the (schedule) impact of each risk
        • Create a risk exposure/impact table for each risk.
          • Risk Exposure = Probability of Loss X Size of Loss
      Risk Probability of Loss Size of Loss Risk Exposure Overly optimistic schedule. 50% 5 wks 2.5 wks Addition of new feature that adds capability to … 10% 20 wks 2.0 wks Inadequate design that requires redesign of major … 15% 15 wks 2.25 wks Board contractor delays delivery of board. 10% 4 wks 0.4 wks Unstable code base from earlier release of product. 20% 10 wks 2.0 wks Product requirements take longer than expected to finalize than planned. 30% 3 wks 0.9 wks Etc. TOTAL PROJECT OVERRUN X wks Y wks
    • Risk Analysis
      • Estimating Size of Loss
        • Impact to schedule IF risk is encountered in its expected form
        • Can be precise based on known date for re-review(s), etc.
        • May need to break down tasks to lowest known level
      • Estimating Probability of Loss
        • Subjective assessment of probability that a given risk will cause the stated impact
        • Many different practices can be used:
          • Experience
          • Delphi or group consensus
          • Betting analogies (How much would you bet that…?)
          • Adjective calibration (“Good probability” = x%, “Fair” = y%, …)
    • Risk Prioritization
      • Establishes a focus on your risks based on the expected impact (risk exposure) of each risk
        • Greatest potential impact must also be addressed
      • 80/20 Rule
      Risk Probability of Loss Size of Loss Risk Exposure Overly optimistic schedule. 50% 5 wks 2.5 wks Inadequate design that requires redesign of major … 15% 15 wks 2.25 wks Addition of new feature that adds capability to … 10% 20 wks 2.0 wks Unstable code base from earlier release of product. 20% 10 wks 2.0 wks Product requirements take longer than expected to finalize than planned. 30% 3 wks 0.9 wks Board contractor delays delivery of board. 10% 4 wks 0.4 wks Etc. TOTAL PROJECT OVERRUN X wks Y wks 1.3+ 5.65 wks
    • Risk-Management Planning
      • Develop a specific, detailed plan for resolution of each high-priority risk identified
        • What must be done
        • When it must be done
        • How it will be done
        • Who will do it
        • When/how it will be monitored/reassessed
    • Risk Resolution
      • Risks can be resolved by:
        • Avoidance : don’t do the risky activity
        • Transference : move it to another place (team, organization, contractor, etc.) where it’s not as likely
        • Buying information : early prototyping, consulting, …
        • Root cause elimination : get at what causes the risk, and make it go away
        • Acceptance/assumption : don’t worry about it, but plan to accept the consequences
        • Publicizing : let stakeholders know (so they implicitly accept the risk), avoid surprises
        • Controlling : develop contingency plans, allocate additional resources if that will help, …
        • Recording/remembering : write down what you know so you can use it in the future (e.g., next project, later in this one)
    • Risk Resolution
      • Use Table 5-6: Means of Controlling the Most Common Schedule Risks
        • Find ways to apply these common approaches to the specific risks that you have identified.
        • Make them specific and relevant to your project.
    • Risk Monitoring
      • Risks and potential impact will change throughout the course of a project
      • Keep an evolving “TOP 10 RISKS” list
        • See Table 5-7 for an example
        • Review the list frequently
        • Refine… Refine… Refine…
      • Put someone in charge of monitoring risks
      • Make it a part of your process & project plan
    • Case Study 5-2: Risk Management Done Right
      • Why/how did this project start off on the right foot?
      • Describe the risk management plan:
        • How were the top risks identified?
          • What were they?
        • How were these risks addressed?
        • How were risks monitored?
      • What was the end result?