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GRA 530 Chapter Notes -Early Start, Guesstimate, Product Lifecycle


Department
Graphic Communications
Course Code
GRA 530
Professor
Natalia Gilewicz

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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

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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
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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
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