Identifying and Managing Project Risk

by Kendrick, Tom

• ISBN13: 9780814413401
• ISBN10: 0814413404
• eBook ISBN(s): 9780814413418
• Edition: 2nd
• Format: Hardcover
• Copyright: 2009-02-18
• Publisher: Amacom Books
• More Book Details
• Purchase Benefits

Summary

Fully updated and revised, this is the essential guide that helps project managers minimize risk . . . and achieve incredible success.It's no wonder that project managers spend so much time focusing their attention on risk identification. Important projects tend to be time constrained, pose huge technical challenges, and suffer from a lack of adequate resources. Identifying and Managing Project Risk, now updated and consistent with the very latest Project Management Body of Knowledge (PMBOK) Guide, takes readers through every phase of a project, showing them how to consider the possible risks involved at every point in the process.Drawing on real-world situations and hundreds of examples, the book outlines proven methods, demonstrating key ideas for project risk planning and showing how to use high-level risk assessment tools. Analyzing aspects such as available resources, project scope, and scheduling, this new edition also explores the growing area of Enterprise Risk Management. Comprehensive and completely up-to-date, this book helps readers determine risk factors thoroughly and decisively...before a project gets derailed.

Author Biography

Tom Kendrick (San Carlos, CA) is an internal project management consultant for Visa Inc., and the author of Results Without Authority (978-08144-7343-6). He has more than 30 years of project management experience, twelve of which were spent as a part of the Hewlett-Packard Project Management Initiative.

Table of Contents

Acknowledgments	p. vii
Why Project Risk Management?
The Doomed Project
Risk
Benefits and Uses of Risk Data
The Project Risk Management Process
Anatomy of a Failed Project: The First Panama Canal Project	p. 1
Planning for Risk Management
Project Selection
Overall Project Planning Processes
Defining Risk Management for the Project
The PERIL Database
A Second Panama Canal Project: Sponsorship and Initiation (1902-1904)	p. 17
Identifying Project Scope Risk
Sources of Scope Risk
Defining Deliverables
High-Level Risk Assessment Tools
Setting Limits
Work Breakdown Structure (WBS)
Other Scope-Related Risks
Documenting the Risks
Panama Canal: Setting the Objective (1905-1906)	p. 40
Identifying Project Schedule Risk
Sources of Schedule Risk
Activity Definition
Estimating Activity Duration
Activity Sequencing
Documenting the Risks
Panama Canal: Planning (1905-1907)	p. 70
Identifying Project Resource Risk
Sources of Resource Risk
Resource Planning
Staff Acquisition
Outsourcing
Project-Level Estimates
Cost Estimating and cost Budgeting
Documenting the Risks
Panama Canal: Resources (1905-1907)	p. 100
Managing Project Constraints and Documenting Risks
Analyzing Constraints
Managing Opportunities
Scope Modification
Resource Modification
Schedule Modification
Assessing Options and Updating Plans
Seeking Missing Risks
Documenting the Risks
Panama Canal: Improving the Plan (1906)	p. 127
Quantifying and Analyzing Activity Risks
Quantitative and Qualitative Risk Analysis
Risk Probability
Risk Impact
Qualitative Risk Assessment
Quantitative Risk Assessment
Panama Canal: Risks (1906-1914)	p. 149
Managing Activity Risks
Root-Cause Analysis
Categories of Risk
Risk Response Planning
Risk Avoidance
Risk Mitigation
Risk Transfer
Implementing Preventative Ideas
Contingency Planning
Risk Acceptance
Documenting Your Risk Plans
Managing A Specific Risk
Panama Canal: Risk Plans (1906-1914)	p. 176
Quantifying and Analyzing Project Risks
Project-Level Risk
Aggregating Risk Responses
Questionnaires and Surveys
Project Simulation and Modeling
Analysis of Scale
Project Appraisal
Project Metrics
Financial Metrics
Panama Canal: Overall Risks (1907)	p. 212
Managing Project Risk
Project Documentation Requirements
Project Start-Up
Selecting and Implementing Project Metrics
Management Reserve
Project Baseline Negotiation
Project Plan Validation
Specification Change Management
Panama Canal: Adjusting the Objective (1907)	p. 251
Monitoring and Controlling Risky Projects
Don't Panic
Applying the Plan
Project Monitoring
Collecting Project Status
Metrics and Trend Analysis
Responding to Issues
Communication
Project Archive
Project Reviews and Risk Reassessment
Taking Over a Troubled Project
Panama Canal: Risk-Based Replanning (1908)	p. 272
Closing Projects
Project Closure
Project Retrospective Analysis
Panama Canal: Completion (1914)	p. 292
Program, Portfolio, and Enterprise Risk Management
Project Risk Management in Context
Program Risk Management
portfolio Risk Management
Enterprise Risk Management
Panama Canal: Over the Years	p. 301
Conclusion
Choosing to Act
Panama Canal: The Next Project	p. 332
Appendix: Selected Detail from the PERIL Database	p. 339
Index	p. 349
Table of Contents provided by Ingram. All Rights Reserved.

Excerpts

Chapter 1Why Project Risk Management?Far too many technical projects retrace the shortcomings anderrors of earlier work. Projects that successfully avoid such pitfalls are oftenviewed as "lucky," but there is usually more to it than that.The Doomed ProjectAll projects involve risk. There is always at least some level of uncertaintyin a project's outcome, regardless of what the Microsoft ProjectGantt chart on the wall seems to imply. High-tech projects are particularlyrisky, for a number of reasons. First, technical projects are highly varied.These projects have unique aspects and objectives that significantly differfrom previous work, and the environment for technical projects evolvesquickly. There can be much more difference from one project to the nextthan in other types of projects. In addition, technical projects are frequently"lean," challenged to work with inadequate funding, staff, andequipment. To make matters worse, there is a pervasive expectation thathowever fast the last project may have been, the next one should be evenquicker. The number and severity of risks on these technical projectscontinues to grow. To avoid a project doomed to failure, you must consistentlyuse the best practices available.Good project practices come from experience. Experience, unfortunately,generally comes from unsuccessful practices and poor projectmanagement. We tend to learn what not to do, all too often, by doingit and then suffering the consequences. Experience can be an invaluableresource, even when it is not your own. The foundation of this book is theexperiences of othersa large collection of mostly plausible ideas thatdid not work out as hoped.Projects that succeed generally do so because their leaders dotwo things well. First, leaders recognize that much of the work on any project,even a high-tech project, is not new. For this work, the notes, records,and lessons learned on earlier projects can be a road map for identifying,and in many cases avoiding, many potential problems. Second, they planproject work thoroughly, especially the portions that require innovation,to understand the challenges ahead and to anticipate many of the risks.Effective project risk management relies on both of these ideas.By looking backward, past failures may be avoided, and by lookingforward through project planning, many future problems can be minimizedor eliminated.RiskIn projects, a risk can be almost any uncertain event associatedwith the work. There are many ways to characterize risk. One of the simplest,from the insurance industry, is:"Loss" multiplied by "Likelihood"Risk is the product of these two factors: the expected consequencesof the event and the probability that the event might occur. Allrisks have these two related, but distinctly different, components. Employingthis concept, risk may be characterized in aggregate for a largepopulation of events ("macro-risk"), or it may be considered on an eventby-event basis ("micro-risk").<