lean project risk factor management

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Page 1: Lean project risk factor management

Lean Project Risk Factor Management

Chul-Young Byun, Prof. Dr. Thomas Heupel

Deutsche Version: http://bit.ly/schlankes-prfm

Page 2: Lean project risk factor management

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Motivation:Is formal project risk management too expensive?

33%

67%

Survey Question to IT PMs:"Did you apply formal project risk management to your IT projects?"

No, mostly due tocost justificationYes

In 2009 a study of 102 IT project managers revealed that one third of those IT project managers did not apply formal project risk management mostly due to cost justification! *

* Kutsch, Elmar and Hall, Mark (2009): “The rational choice of not applying project risk management in information technology projects” in Project Management Journal 40, no. 3, p. 72–81

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Lean Project Risk Factor Management:Spend 3 minutes per week on standard risk factors!

Risks

Future

Risk Factors

Nearer FuturePresent

Risk FactorIndication

PresentPM

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Feedback Loop:Assess risk factors and obtain mitigation priorities!

… Week n-1 Week n …

PresentPMof

project xyz

Risk Factor Indication Perceptions

Risk FactorMitigation Priorities

Risk FactorPreviousMitigationPriorities

LatestMitigationPriorities

Lack of adequate project team 4 1Lack of top mgmt commitment to the project 6 2Changing requirements 5 5Lack of effective project mgmt methodology 7 6Lack of adequate user involvement 6 10Misunderstanding the requirements 6 12Failure to gain user commitment 12 13Failure to manage user expectations 12 13

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Research studies and survey of 63 practitioners propose 8 standard IT project risk factors!

Risk Factor Risk Factor Description

Misunderstanding the requirements • not having a clear overall product vision• not thoroughly defining the requirements of the new system or next features before starting 

the implementation or next implementation iteration• consequently not understanding the true work effort, skill sets and technology required to 

complete the project and/or next iteration

Lack of top management commitment to the project

• lack of oversight by executives and visibility of their commitment• lack of supporting underlying project management methodology• lack of committing required resources with adequate capacity• lack of providing necessary organizational, physical and/or technical project environment or  

infrastructure setup as needed• lack of changing policies as needed

Lack of adequate user involvement • functional users do not actively participate in the project team and do not commit to their deliverables and responsibilities

• functional user time is not dedicated to the goals of the project

Failure to gain user commitment • blaming the project leader rather than the involved users for "lack of client responsibility"

Failure to manage user expectations • expectations mismatched with deliverable• expectations are not correctly identified and not constantly reinforced

Changing requirements • increasing amount of requirements changing quicker than the project can cope

Lack of effective project management methodology

• inadequate project management methodology selected for the project• misunderstanding the project management methodology and therefore applying it incorrectly• lack of quality oriented engineering practices• inadequate staffing of project roles• inadequate project team size

Lack of adequate project team • right skilled people with wrong attitude• lack of experience with problem to solve• lack of team’s soft skills

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Positive observations with participating PMs

“The risk factor list is an aggregation of many sub levels focusing on people,

process and tools. However any micro level risk has to be aligned to one of these

8 factors.”

Comments from participated PMs

“The checklist tool is not only a great tool for PMs, but also provides the level

of risk visibility that is relevant for leadership and executive stakeholders.

I found it valuable to have a tool that helps provide a concise view of risks

and mitigations through simplifying what can be complex. Thank you for

allowing me to participate!”

“Although the checklist (8 factors) are very high level, the granular risks can be mapped to them and are

useful for analysis.”

Register here for the next wave: http://bit.ly/PRFM-Registration

Benefits:1. With minimal effort you apply formal project risk management in an efficient manner!2. You can broaden your project risk management knowledge and experience!3. You obtain the study results showing your individual vs. the other PM’s project risk management behavior!4. Bonus: When you have filled out 10 checklists you can select between an immediate $10 Amazon voucher

(or equivalent) and a $200 Amazon voucher (or equivalent) prize draw at study end!

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0 1 2 3 4 5 6 7 8

... the proposed mitigation priorities are helpful.

... the risk factor checklist tool can be used nextto traditional project risk management activities.

... the risk factors are relevant.

... the checklist can be filled out easily and quicklyenough.

I would use the risk factor checklist tool on other projects because …

Yes No

Positive observations with participating PMs

Register here for the next wave: http://bit.ly/PRFM-Registration

Benefits:1. With minimal effort you apply formal project risk management in an efficient manner!2. You can broaden your project risk management knowledge and experience!3. You obtain the study results showing your individual vs. the other PM’s project risk management behavior!4. Bonus: When you have filled out 10 checklists you can select between an immediate $10 Amazon voucher

(or equivalent) and a $200 Amazon voucher (or equivalent) prize draw at study end!

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Positive observations with participating PMs

Register here for the next wave: http://bit.ly/PRFM-Registration

Benefits:1. With minimal effort you apply formal project risk management in an efficient manner!2. You can broaden your project risk management knowledge and experience!3. You obtain the study results showing your individual vs. the other PM’s project risk management behavior!4. Bonus: When you have filled out 10 checklists you can select between an immediate $10 Amazon voucher

(or equivalent) and a $200 Amazon voucher (or equivalent) prize draw at study end!

Risk Factor level without using the tool

Risk Factor level going down 4 times faster by

using the tool