Risk Management

1
Risk Management

• What is it?
• Assessing, reducing, and controlling risks so
  that project objectives are met without requiring
  excessive schedules or resource budgets.
• Note, all project planning can be consider risk
  management however, this topic discusses
  specific actions to plan for risk.

2
Risk Assessment

• Identifying risks
• Risks concerned with the tasks themselves
• Risks that occur between tasks
• Estimating consequences
• Monetary cost of shortfall
• Impact to schedule overrun
• Shortfall on cost and schedule overrun

3
Risk Reduction

• Reduce uncertainty
• Prototyping, simulation, modeling
• Planning in detail, including mitigation plans
• Parallel alternative developments
• Reduce consequence
• Decoupling related items
• Providing margins or reserves

• Checking references
• Using trained or certified staff
• Using proven technology
• Verifying suitability of inputs

4
Other risk management techniques
X

• Risk Avoidance
• Reducing requirements
• Increasing budget (locally)
• Extending schedule (locally)
• Risk Transfer
• Insurance
• Aligning responsibility and authority

5
Problem Resolution

• Problems are inherent in complex projects.
• Problem Sources
• Motivation
• Conflict
• Technology
• Poor Planning
• Mother Nature
• Problem Solving
• Communication
• Root cause analysis
• Obtain advice

6
Project Ethics

• What are the characteristics of someone who is
• trustworthy
• a person of integrity
• an ethical person
• ?

7
Project Ethics (see attached)

• Applicable codes of ethics
• Project Management Institute (PMI) Member Ethical
  Standards
• Code of Ethics for Engineers (NSPE)
• other professional codes of ethics
• Lets compare PMI and NSPE codes
• PMI http//www.pmi.org/About-Us/Ethics//media/P
  DF/Ethics/ap_pmicodeofethics.ashx
• NSPE http//www.nspe.org/Ethics/CodeofEthics/ind
  ex.html

8
Project Ethics

• Are there always clear answers to ethical
  questions?
• Sample discussion questions
• Should you quote projects for less than the
  estimated cost?
• If you do under-quote a project should you go
  back and ask for additional funds?
• Should you ever go back and ask for additional
  funds?

9
Project Ethics

• Discussion questions continued
• If in your opinion, the specifications are in
  excess of what is required, should you design to
  a more realistic set of specifications in order
  to save the customer money?
• If there is an opportunity to save the customer
  money even though it may mean smaller profits for
  yourself, should you inform the customer?
• Should you give more attention to the squeaky
  wheel?

10
Project Ethics

• Discussion questions continued
• Should you pay one worker more than another,
  even though they do equivalent work?
• If you make an agreement to purchase materials
  from a vendor, but find a lower price elsewhere,
  should you buy from the new source?
• Other situational questions from the class.