risk management
DESCRIPTION
Overcoming Impossible ProjectsTRANSCRIPT
Orlando Moreno [email protected] 408.656.2498 1
Overcoming Impossible Projects
ByOrlando Moreno, PMP
Orlando Moreno [email protected] 408.656.2498 3
Standish Group, 1998• 26% Successful (on time/on budget)
• 46% “Challenged” (late, over budget, etc.)
• 28% Cancelled
Behind the numbers:
• Software Development Projects, averaging $2M
• Reported by CIOs, IT Managers, CTOs
“75% of All Projects Fail”
Orlando Moreno [email protected] 408.656.2498 4
Real Projects: The Truth Is Out There
Projects “Fail” for Three Reasons:
1. The Objective (Scope) Is Actually Impossible.
2. The Project Is Overconstrained.
3. The Project Is Poorly Planned and Executed.
Orlando Moreno [email protected] 408.656.2498 5
Project Risk ManagementDepends on Project Planning to:
• Identify (and Avoid) Truly Impossible Projects.
• Develop Negotiation Data for Overconstrained Projects.
• Eliminate Poorly Planned and Executed Projects.
Two Sides of the Same Coin:You Cannot Manage What Might Go Wrong Until You Know What “Going Right” Looks Like.
Orlando Moreno [email protected] 408.656.2498 6
PERIL DatabaseProject Experience Risk Information Library
• Over 200 Project Records
• Primarily IT and Product Development Projects
• World-wide
• All Risk Impacts Normalized to Schedule Slippage
Americas Asia Eur/ME TotalIT/Solution 67 25 13 105
Product Development 56 45 16 117
Total 123 70 29 222
Orlando Moreno [email protected] 408.656.2498 7
PERIL Database Risk Types
Risk Types:
• Scope (Changes, Defects)
• Resources (People, Outsourcing, Money)
• Schedule (Delay, Dependency, Estimates)
CountCumulative
Impact (weeks)Average Impact
(weeks)Scope 76 478 6.3
Schedule 82 306 3.7Resource 64 361 5.6
Total 222 1145 5.2
Orlando Moreno [email protected] 408.656.2498 8
PERIL Relative Risk Severity
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Orlando Moreno [email protected] 408.656.2498 9
PERIL Scope Risks
• Changes (Scope Creep, Gaps, Dependencies)
• Defects (Hardware, Software, Integration)
Scope CountCumulative
Impact (weeks)Average Impact
(weeks)Change 46 280 6.1Defect 30 198 6.6
Orlando Moreno [email protected] 408.656.2498 10
PERIL Scope Risk Severity
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Orlando Moreno [email protected] 408.656.2498 11
Scope Risk Remedies• Scope Planning
• Work Breakdown Structure
• Change Control
• Worst Case and System Analysis
• Evolutionary or Cyclic Development Methods
Orlando Moreno [email protected] 408.656.2498 12
PERIL Resource Risks
• People (Loss, Temporary Loss, Late Start, Queuing)
• Outsourcing (Delay, Turnover, Late Start)
• Money
Resource CountCumulative
Impact (weeks)Average Impact
(weeks)People 45 194 4.3
Outsourcing 17 109 6.4Money 2 58 29.0
Orlando Moreno [email protected] 408.656.2498 13
PERIL Resource Risk Severity
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Weeks of Project Impact
Orlando Moreno [email protected] 408.656.2498 14
Resource Risk Remedies
• Resource Planning
• Project Staffing—by Name
• Sponsorship
• Contracting Competence
• Co-Location
Orlando Moreno [email protected] 408.656.2498 15
PERIL Schedule Risks
• Delay (Hardware, Parts, Decisions, Information)
• Dependency (Projects, Support, Other)
• Estimates (Judgment, Learning Curve, Deadline)
Schedule CountCumulative
Impact (weeks)Average Impact
(weeks)Delay 46 134 2.9
Dependency 21 102 4.9Estimates 15 70 4.7
Orlando Moreno [email protected] 408.656.2498 16
PERIL Schedule Risk Severity
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Weeks of Project Impact
Orlando Moreno [email protected] 408.656.2498 17
Schedule Risk Remedies
• Dependency Analysis
• Interface Analysis
• Estimation Methods and Metrics
• Worst Case Analysis
Orlando Moreno [email protected] 408.656.2498 18
PERT Schedule Analysis
Durationtpteto1
%50%
99%
0 tm
Program Evaluation andReviewTechnique
But… What About Parkinson’s Law?
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Worst Case Schedule Analysis
Duration0
“Worst Case” Estimating
t o
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Orlando Moreno [email protected] 408.656.2498 20
Project Risk Management• Use Qualitative (and When Appropriate,
Quantitative) Analysis to Assess Risk Severity.
• Avoid or Mitigate All Severe Preventable Risks.
• Transfer or Establish Contingency Plans for All Other Severe Risks.
• Reduce Project Size, Complexity.
• Establish Reserves for Schedule and/or Budget Based on Risk Analysis.
• Negotiate Project Objectives Consistent with Credible Plans.
Orlando Moreno [email protected] 408.656.2498 21
So…If Planning and Analysis Show Your Project Is Impossible:
• Change It, Avoid It, or Stop It, Early.
If Planning Shows the Project Is Overconstrained:
• Negotiate the Constraints.
• Set Appropriate Reserves.
• Manage Risks.
If Planning is Poor, or Not Done:
• You are part of the “75%.”
Schedule Resources
Scope
Orlando Moreno [email protected] 408.656.2498 23
“One of the things we always like to remind ourselves before we do any job was to expect the unexpected. Right? Right. Always sounds like good advice. Except of course, if you are expecting the unexpected, well, then it really isn’t unexpected anymore, is it? And that leaves you vulnerable to the truly unexpected, because you are not expecting it.”
—Bruce Willis’s character in Bandits (2001)