Project value risk management achieving the wow factor on your projects


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Project value risk management achieving the wow factor on your projects

  1. 1. RMI Risk Masters, Inc. PVRM - Project Value Risk Management Focusing on making your most critical projects successful June 2, 2013 © Copyright Risk Masters, Inc. 2013. All rights reserved. 1
  2. 2. You have a very critical project RMI • It is very visible… – Within the firm – To customers • It is important to your company… – To achieve its strategy – To meet its financial goals – To enhance its reputation – To gain market share – To maintain its lead over our competitors • And it is important to you! © Copyright Risk Masters, Inc. 2013. All rights reserved. 2
  3. 3. Risks you face… • Technology… – You are using new technologies for the first time • Resources… – Funding is limited – Time is short – Turnover is high • Process… – There are governance issues – Requirements are difficult to pin down RMI • Internal Environment… – Leadership is in transition – Datacenters are being consolidated – Your network has been hacked • External Environment… – A supplier’s network has been hacked – A supplier is struggling with new technology – A supplier has been acquired And key opportunities may be overlooked © Copyright Risk Masters, Inc. 2013. All rights reserved. 3
  4. 4. Consequences you face… RMI • Your company’s reputation will suffer • Your customers will consider alternate suppliers • Your company’s strategic and financial goals will not be met • An “OK solution” is just not good enough • A “failed solution” just cannot happen • Exceeding expectations is better than just meeting them • You are responsible for success, and anything less than the best won’t do… © Copyright Risk Masters, Inc. 2013. All rights reserved. 4
  5. 5. RMI Adding Value by Managing Risk Expectations • Success is more than simply achieving objectives – the baseline against which managers are measured • True success comes from a better product, ahead of schedule, below budget. – This can only be achieved by anticipating the obstacles to success and taking advantage of expected and unexpected opportunities – Risk can never be eliminated but it can be managed to the benefit of the project owners, the project team, and all who are involved • Sooner • Less costly • Better Managed Risk Cost overrun “Pay as you go” Risk Management Resource shortage Predicted project end Delivery delay Time © Copyright Risk Masters, Inc. 2013. All rights reserved. 5
  6. 6. For these critical projects… RMI • Project Value Risk Management (“PVRM”) will… – Enhance the quality of the product that is delivered – Mitigate the risks that threaten the success of the project – Reduce the overall actual duration and costs of the project – Empower you to be better informed about the real status of the project, and therefore more able to influence its outcome © Copyright Risk Masters, Inc. 2013. All rights reserved. 6
  7. 7. How PVRM Works… RMI • An experienced IT Leader is assigned by the project’s Sponsors as the “Project Value Risk Consultant” (PVRC) • The PVRC works with the project team to jointly identify risks and opportunities, develop plans to mitigate the risks, and assess the value and impact of the opportunities. • Risks are tracked on a Risk View Spreadsheet that enumerates and categorizes the risks, assesses their impact, tracks mitigation and status, and calculates the chance of impact (Appendix A). – With this, Risks can automatically be grouped, analyzed and studied • The PVRC works with the project team throughout the lifecycle of the project to develop and present to the Executive Sponsors a periodic report of Risks, Opportunities and Actions Taken (Appendix B). – The guidance of the Sponsors is then incorporated into the Project Plan © Copyright Risk Masters, Inc. 2013. All rights reserved. 7
  8. 8. More than Quality & Risk Management (QRM) RMI • QRM is the systematic application of quality management policies, procedures and practices to the tasks of assessing, controlling, communicat ing and reviewing risk • QRM improves the project throughout its lifecycle • QRM involves four steps – Risk Assessment – Risk Control – Risk Review – Risk Communication © Copyright Risk Masters, Inc. 2013. All rights reserved. 8
  9. 9. More than project or risk management RMI • Project Managers are tasked with managing risk, among other activities. – PVRM supports this role through skill, experience, and having the time/ability to focus on risk as a dedicated task • A Project Manager is responsible for everything but is rarely expert in all aspects of a project…including Risk Management – PVRM empowers the Project Manager, as do Subject Matter Experts • PVRM looks beyond organizational constraints to provide Senior Management with a perspective independent of accountability for delivery • PVRM gives the project customer and Senior Management a surrogate to ensure their satisfaction, and more © Copyright Risk Masters, Inc. 2013. All rights reserved. 9
  10. 10. PVRM integrates QRM with Project Management RMI • The skills and techniques of managing risk and opportunity… – Become core competencies of the project team – Enhance communications, escalation and awareness of risks and opportunities – Leverage the benefits of project management to perform the project effectively – Leverage the benefits of QRM to make the project better © Copyright Risk Masters, Inc. 2013. All rights reserved. 10
  11. 11. PVRM is a continuous and integral part of a project © Copyright Risk Masters, Inc. 2013. All rights reserved. RMI 11
  12. 12. PVRM helps anticipate problems RMI • Adds risk identification, management and mitigation to the project workstream • Changes how project risks and opportunities are managed – The entire project team is engaged in actively identifying, managing risks and opportunities – Risks and opportunities are identified and assessed early, tracked effectively and resources are focused efficiently and effectively mitigating the risks and realizing the opportunities – Senior Management and the project team become aware of key risks before the risks become self-evident or otherwise impact the project © Copyright Risk Masters, Inc. 2013. All rights reserved. 12
  13. 13. PVRM transforms how the project is delivered RMI • The project can be more focused on opportunities… – Addressing activities to make the project more successful – Mitigating or even avoiding risks that might lead to significant time and cost overruns • While spending less time on obstacles – Reacting to the unexpected – Invoking contingency plans, time and budget • Senior Management is better informed of these opportunities and roadblocks – Enabling you to bring experience and appropriate resources to improve the outcomes © Copyright Risk Masters, Inc. 2013. All rights reserved. 13
  14. 14. RMI PVRM can help eliminate cost overruns • Every project has a planned contingency • But there are also hidden and unplanned contingencies that PVRM can manage in order to reduce your costs, eliminate duplicative efforts, and mitigate the chance overruns Opportunity Area Typical Cost, as “% of Project” Opportunity Planned Contingency 20% Cost/Time avoidance Hidden contingency embedded in schedules, resource plans and budget 20% Cost/Time recovery Unplanned Rework, Overruns and Delays 20% Cost/Time avoidance Total 60% © Copyright Risk Masters, Inc. 2013. All rights reserved. 14
  15. 15. PVRM can help reduce project duration RMI • Projects that fall behind schedule usually do so because of – Inexperience and lack of qualified staff – Staff turnover – Insufficient lead time for critical resources – Overly optimistic estimates of costs, workloads and task durations – Poor internal and external communications and escalation – A lack of understanding of the customer’s actual requirements • These are all risks that can be anticipated and dealt with – If senior, experienced leadership is engaged on an on-going basis throughout the project life cycle – PVRM leverages retained experience and seniority to extend the reach of Senior Managers who cannot or will not give their time and energy to the project © Copyright Risk Masters, Inc. 2013. All rights reserved. 15
  16. 16. PVRM can lead to higher quality project deliverables RMI • PVRM applies the engineering disciplines of Quality Management to major projects – Understanding buyer needs, beyond written specifications – Bridging the communications gap between customers and developers – Reducing – or eliminating – seemingly endless rounds of disappointment and revisions – Fostering collaboration internally within the project team and externally with Subject Matter Experts – Ensuring the polish, professionalism and “surprise and delight” of each interim and final project deliverable © Copyright Risk Masters, Inc. 2013. All rights reserved. 16
  17. 17. RMI PVRM can be used in many levels of a project PVRM activities can be focused on areas of greatest risk or opportunity, as needed Relocate Datacenter • At the program level • At the project level Build New Datacenter Staff the Datacenter Migrate to Datacenter © Copyright Risk Masters, Inc. 2013. All rights reserved. Design, Permits & Contracts Relocate Staff Consolidation Build & Certify • At the work-stream or activity level Hire Staff Migration 17
  18. 18. PVRM can be tailored to meet Management’s needs RMI The scope of a PVRM engagement can be… • Limited to Senior Management Reporting • Expanded to include Risk and Opportunity Monitoring • Further expanded to include workshops to pro-actively improve the project and its outcome PVRM Effort Low PVRM Scope Reporting Reporting and Monitoring Reporting, Monitoring and Improvement Periodic Reporting of Risks and Opportunities to Senior Management Medium High © Copyright Risk Masters, Inc. 2013. All rights reserved. Risk Monitoring and Tracking for the Project Workshops to Identify Opportunities, Eliminate Roadblocks, and Enhance Value 18
  19. 19. RMI Typical PVRM involvement PVRM Scope PVRM Activities Reporting • • • • • • Conduct preliminary meetings with leadership and project team Develop preliminary assessment Review preliminary assessment with project team Develop consensus Document findings, consensus, issues and recommendations Present to leadership and project team Monitoring • • • • Participate in project team meetings Document tasks, timelines, contingencies, commitments, issues Assess all items and provide feedback to project team Update “living documents” and report periodically Improvement • • • • • Work with project team to identify issues, opportunities and obstacles Conduct meetings and facilitate dialogues to address identified items Consult with leadership on findings and strategies Document findings, conclusion and agreed upon actions Incorporate into monitoring and reporting materials, above © Copyright Risk Masters, Inc. 2013. All rights reserved. 19
  20. 20. RMI Appendix A: Risk Review Worksheet Table 1: Risk Summary Report This report quantifies the Fatal and High Risks and the probability of at least one of each occurring (The data below is calculated automatically from the Risk View shown in Table 2 on the next page) Risk Severity Risks that would have a FATAL impact Risks that would have a HIGH impact Total for Risks with a FATAL or HIGH impact © Copyright Risk Masters, Inc. 2013. All rights reserved. Number of Risks Probability at Least 1 Open Risk Item Closed Open Occurs 0 0 0 2 1 3 91.0% 25.0% 93.3% 20
  21. 21. RMI Appendix A: Risk Review Worksheet Table 2: Risk View of Project Section 1 Enumerates and Categorizes Project Risks # 1 2 3 4 5 6 7 8 Description of Risk (text) Risk Category (Table) Cause of Risk (text) q q q Requirements may be late Teams unable to meet on a timely basis due to conflicts Process Requirements may not reflect business needs User team is junior and lacks leadership presence Process Hosting servers may be late Vendor is back-ordered Environmental Development may complete late One developer just resigned Resource Design may complete late Team is new to designing for Tablets rather than PCs Technology Tablet version may not deliver all functionality First time team is using Tablet toolset Technology Screens may not render exactly as in requirements Tools for requirements are Generic Technology Business may cease to be viable Pending legislation may obviate business need Other Businnes Process or Channel (Table) q Requirements Requirements Deployment Development Design/Usability Architecture Design/Usability Governance Date Added mm/dd/yy q Owner (name) q Date Last Update mm/dd/yy q Section 2 Assesses Impact and Tracks Mitigation and Status Magnitude # Description of Risk (text) q Likelihood Liklihood (Table) Chance Impact (Table) Cost Time Qual Fit q q q 1 Requirements may be late Medium 50% Medium Y Y 2 Requirements may not reflect business needs Very High 90% Fatal 3 Hosting servers may be late Low 25% High 4 Development may complete late Low 25% Low Y Y 7 Screens may not render exactly as in requirements 8 Business may cease to be viable q Other (text) Strategy (text) Status (text) q q q Open Close Y 6 Tablet version may not deliver all functionality q Mitigation Y 5 Design may complete late q Impact on Project Outcome q Open Y Y Open Open Nil 0% Low Certain 100% Medium Y Y Open Low 25% Nil Y Y Open Very Low 10% Fatal Y Open © Copyright Risk Masters, Inc. 2013. All rights reserved. 21
  22. 22. Appendix B: Periodic Risk Report (Example) Risk Area Current Status and Assessment Development Progress Development team has made good progress and developed and launched into production System 1.0. Team is preparing for production release of System 1.1 with client-critical enhancements Program Delivery Status of program of this size and magnitude is on track as if it were being delivered to a client, with appropriate mitigation of risks, knowledge of issues, and team maturity. System Operations & Support The solution will present deployment, adoption and operational challenges to all Departments. Procedures, instructions and Help Desk support need to be further developed and discussed with each Department. This is time critical for the first Departments to deploy. Nomenclature & Branding Confusion Nomenclature and branding confusion exists between new System and legacy one in use. Need for greater clarity around how methodology, behavior changes, and technology deliver transformation. © Copyright Risk Masters, Inc. 2013. All rights reserved. RMI Risk Assessment Team turnover has been increasing. Risk Team is working on mitigation strategies. QA Tools for acceptance of System 1.1 require a vendor upgrade. Some risk regarding stability and effectiveness of the upgraded tools. Mitigation plan being developed While a program of this size and magnitude will have a significant number of challenges, issues, and risks, the program is being professionally managed with good mitigation and management of issues and risks. All of these issues and risks are normal for a project at this stage of development. The team should continue to manage as it has in the past and professionally execute as if the products were being delivered to an external client. The team has developed good documentation to support the implementation from a technical infrastructure perspective, along with high-level plans for an appropriate support structure. Given the complexities of implementing a new system, the team should further refine these plans, working with each Department to understand the complications and intricacies of deployment. The team should anticipate an increase in support needs following rollout Continue reinforcing messages around the scope including methodology, technology, and technology. Departments need to recognize the broad scope to understand how each of the core components work together to reinforce ongoing transformation of business. Renaming of the transformation initiative will help avoid the branding confusion. 22