Ch 9 Textbook Notes

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Business Administration
BUS 361

Chapter 9: Managing Project Risk What is Risk? • Project risk: an uncertain event of condition that, if it occurs, has a positive or negative effect on a project objective Technology, Teams and Managing Project Risk • Volatile nature of technology creates special pressures in info system projects • PM may need to discuss w client the possibility of changing the project scope to include new capabilities Managing Risk and the Project Life Cycle • Risk occurs in initiation (project selection), planning (project selection decision), execution (not meeting scheduled delivery), closing (acceptance) and control. The Effects and Categorization of Project Risk Statistics about Project Risk • 38% stated their org approach risk management in terms of the consequences and likelihood of their occurrence • 28% companies used systematic and organized assessments and control processes • 25% approached risk management in terms of both positive and negative variation to project plan • 9% org approached risk management as the difference between means and ends. • 36% biggest problem in org was improper assessment or management of project risk General categories of IS Project Risk • Includes risks associated with: ongoing changes in tech, finding and assigning skilled personnel, gaining user acceptance, and choosing the correct development methodology Technique for Managing Project Risk • Risk is natural during IS development projects and magnified by new tech and methodologies • Incld. Risk management plan, risk identification, qualitative risk analysis, quantitative risk analysis, risk response planning, and risk monitoring and control Risk Management planning • Risk management planning: a systematic approach to planning the risk management activities of a given project • Risk management plan: an overall plan used to outline risks and the strategies used to manage them o Methodology o Roles and responsibilities o Budgeting o Timing o Scoring and interpretation o Threshold o Reporting formats o Tracking Risk Identification • Risk identification: the process of identifying and documenting a projects potential risks • Risk Register: a formal record listing all project risks, explaining the nature of the risk and management of the risk • Output o Technical, quality or performance risks o Project management risks o Organizational risks o External risks • Documentation reviews: the review of organizational information to aid during risk identification o Project files and published information • Information gathering techniques: techniques such as brainstorming, Delphi surveys, SWOT analyses used to identify project risk o Brainstorming: gathering info, o Delphi technique: iterative process of info gathering o Interviewing o SWOT • Diagramming techniques: diagramming tools, such as below to help identify project risk o Cause and effect diagrams: fishbone,. ID Risk allow managers to identify potential risks and trace them to root o System or process flow charts: depict interrelations among project activities and can be used to help managers determine the risks associated with the interrelations o Influence diagrams: graphically represent potential problems while accounting for casual influences, time, and others between project activities and outcomes • Trigger: events that serve as early warnings of risk Qualitative Risk Analysis • Qualitative risk analysis: the establishment of possibilities regarding both the impact and likelihood of specific risk occurrence • Probability/impact risk rating matrix: a technique used to analyze project risk in terms of its probability of occurrence and its impact on project outcomes • Impact scales represent the magnitude of the effect the risk occurrence may have on the project objective. Impact scales can be ordinal, or cardinal • Project assumption testing: a technique used during qualitative risk analysis to test th
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