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Risk Management
1) Risk management is an important practice for any ERP implementation project to help manage risks and increase the chances of success. 2) When estimating projects, risks are assumed but rarely communicated or managed during the project. 3) Implementing a structured risk management process provides visibility of project risks, defines risk ownership, and provides action plans to avoid or mitigate risks.
Risk Management
- 1. Risk Management inERP Implementation “The biggest risk to any project is not using Risk Management”
- 2. The possibility ofsuffering harm or loss; danger A practice with processes, methods, and tools for managing risks in a project When we quote or estimate a project, we assume a level of risk, yet we rarely communicate that to the client and never manage it during the project.
- 3. Status Description Statistics Success Completed on-time, on-budget with all 16% features and functions as initially specified Challenged Completed and operational but over- 53% budget, over the time estimate and offers fewer features and functions than initially specified Impaired Cancelled during development cycle 31% Info from The Standish Group - 1998
- 4. User involvement Executive management support Clear statement of requirements Proper planning Realistic expectations Smaller project milestones Competent staff Ownership Clear vision and objectives Hard-working, focused staff Info from The Standish Group - 1998 Proven project methodology & documentation
- 6. Because .. .. risks exist .. It provides a structured approach to controlling risk .. it provides understanding & visibility of project risks .. it facilitates client acknowledgement and acceptance of their risks .. it defines risk ownership .. it provides action plans to avoid or mitigate risks .. it provides for contingency planning .. it makes the project predictable .. it facilitates proactive issue management
- 7. Chargeable Risks preparation time Issues Lost time on remedial work Accounts Receivables Lost Revenue Opportunities
- 8. Risk Responses Reduce Reduce Contingency Transfer Avoid Probability Impact Plan
- 9. S S U A 1 2 3 4 5 6 P L Analysis Project Design Data Test Run Hand OVer P E Organisation Preparation O S 1.1 Business 2.1 Set Project 3.1 Specify 4.1 Specify 5.1 Test system 6.1 Go Live ! R Requirements Objectives & Scope business data and compare to T processes conversion BRR, design & 6.2 Project Review 2.2 Team building needs objectives Audit & 3.2 Specify input, Quality 1.2 Initial outputs & 4.2 Load data 5.2 Reconcile & Control Project Plan 2.3 Resource (optional) planning interfaces document 4.3 Validate 6.3 Client 3.3 Set up 5.3 Change Satisfaction 1.3 System 2.4 Prepare Project installation Plan parameters 4.4 Change Control Survey Control 3.4 Evaluate 5.4 Steering 6.4 Hand over 1.4 Core Team 2.5 Agree on Project Prototype 4.5 Steering Committee to Support training Management procedures Committee meeting 3.5 End user meeting 2.6 Kick-off training 2.7 Steering 3.6 Document Committee Meeting 3.7 Change Control
- 10. S S U A 1 2 3 4 5 6 P L Analysis Project Design Data Test Run Hand OVer P E Organisation Preparation O S R T Project Management R is k M a n a g e m e n t Continual assessment & review Initial Risk Management Plan
- 11. •Brainstorm project risks Identify • Involve the client • Determine client’s risk tolerance Analyse • Define: • Potential outcome Plan • Ownership Track Control
- 12. Identify • Evaluate impact • Evaluate probability Analyse • Define expected timeframe • Evaluate potential cost Plan • Classify by importance Track Control
- 13. Identify • Identify risk indicators Analyse • Identify risk symptoms • Choose appropriate risk response Plan • Define response action plan: • Tasks • Target dates Track • Responsibilities • Approval Control
- 14. Identify Analyse Plan • Maintain Risk Management Plan Track • Regularly review risks • Regularly review response action plans Control • Review risk on any project change
- 15. Identify Analyse Plan Track • Implement contingency plans Control • Maintain Risk Management Plan • Transfer risk to issue log & cross- refer • Document non-predicted issues
- 16. Identify Communication Analyse • .. With the client’s project manager • .. With the project team Plan • .. With the client’s steering committee Track Control
- 17. improves the chances of a successful project reduces issues and the impact of issues reduces costly remedial work improves accounts receivables
- 18. RISK MANAGEMENT (Based onSignature Methodology)