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GRA 530 (3)


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Ryerson University
Graphic Communications
GRA 530
Natalia Gilewicz

GRA530 Chapters 5-8 Study Notes Chapter 5 – Risk Management: Minimize the Threats to your Project The Risk Management Advantage  Risk Management is the means by which uncertainty is systematically managed.  Known unknowns o Identified possible problems that may interfere with the project  Unknown unknowns o Problems you just can’t see coming  Can’t be caught off guard All Project Management is Risk Management  The ways Risk Management relates to PM o Project Definitions  Risk surface when the project is conceived, and are initially listed as assumptions o Project Planning  RM is one of the major ongoing components; in addition to schedule and budget development o Project Control  Monitor for progress and known risks Business Risk vs. Project Risk  Business risk is inherent to every business projects and the owner of the project is responsible for it o Selecting the right project o Selecting a topic that is too far fetch and getting no response.  Project risk is aspects of the project that the PM is in charge of managing to ensure the project is completed o Managing uncertainty to manage stakeholders objectives The Risk Management Framework  RM process throughout the project (Fig 5.2) o Identify risks  Get info from stakeholders  Think about what could effect the stakeholders  Use a risk profile o Analyze and prioritize o Develop a response o Establish reserves o Continuous RM GRA530 Chapters 5-8 Study Notes Record Risk Management Strategies  Document all insights gained in risk planning  Makes sure to keep a rainy day fund and keep track of it  Contingency reserves are for known unknowns  Management reserves are for unknown unknowns  Remember no matter how thorough you are in the initial RM, ongoing RM is a must Step 1: Identify the risk  Brainstorm  Interview stakeholders  Murphy’s Law: “Anything that can go wrong, will go wrong.” o Be critical and include as many perspectives as possible  Build a risk profile: question learned from past experience o Industry specific o Company specific - conflict within the group/company o Include product and management risks o Predict magnitude -> Low, Medium, or High  Look at historical records  Identify the risks as you schedule and budget Step 2: Analyze/Prioritize  Define the risk o What is the risk?  Technical problems do not really define the risk.  Be specific and define consequences.  How likely will something occur o Condition describing situation o Consequence  Assign a probability: a % likelihood that something will occur  Rank the risk according to the impact and the probability  Probability/impact matrix (Fig 5.3) Step 3: Develop response plans  You want to reduce either the impact, the probability or both  Reduce impact by being ready o E.g. have a first aid kit on a camping trip.  Reduce probability by hiring experts  Use a risk log (Fig 5.5)  5 categories of risk response 1. Accepting the risk: do nothing 2. Avoid the risk: choose something less risky 3. Contingency plans: plan B a. Usually involves setting aside money 4. Transfer the risk: fixed $ contracts, or insurance GRA530 Chapters 5-8 Study Notes 5. Mitigate the risk: work at reducing the risk Step 4: Establish Contingency  Rainy-day fund  For each risk identify additional cost of contingency  Add this number together and put that much $ aside Step 5: Continuous RM  As time passes new risks will arrive, and others will disappear o Monitor existing risks o Check for new risks and prepare response plans o Retire unrealized risks Chapter 6: Work Breakdown Structure: Break your work down into manageable units Defining The Work Breakdown Structure (WBS)  The WBS identifies all tasks in a project and breaks them down into manageable units  Building a WBS helps o Provide detail illustration of project scope o Monitor progress o Create accurate cost and schedule estimates build o Build project teams Understanding the WBS  Two types of task on WBS o Summary task  Contains several subordinate task o Work packages  The individual tasks that make up a summary task  These are the task actually executed Building a Work Breakdown Structure  Steps to a good WBS o 1. Begin at top o 2. Name all the tasks required to produce deliverables  Sometimes high task are done by top management, and the details are filled in by smaller work units o 3. Try moving the structure around  You want it to reflect what you emphasize is important in the project GRA530 Chapters 5-8 Study Notes Criteria for a Successful Work Breakdown Structure  Three Criteria o Must be broken down start at top  Present meaningful information at summary task level o Work packages must add up to the summary task  Try not to miss any tasks o Each summary task and work package must be named as an activity that produces a project  Hard verb and noun  E.g. Publish blog entries o Break into small, meaningful, manageable units of work Work Package Size  Make sure it is a task not a subproject  Rule of thumb for sizing o The 8/80 rule o The reporting period rule o The “if it’s useful” rule  Easier to estimate  Easier to assign  Easier to track  Your WBS can include PM as an activity Planning for Quality  Do it right the first time  Set completion criteria o Peer reviews o Checklists o Systematic testing  Begin with the end in mind -> the acceptance process Breaking Down Large Programs  Two WBS formats o 1. Deliverable-orientated  Uses only nouns to describe tasks o 2. Work packages as subprojects or group activities  On larger projects some work packages can be worth $100,000
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