Decision-Making In Project Management Decision Framing Intaver Institute Inc. 303, 6707, Elbow Drive S.W, Calgary, AB, Canada Tel: +1(403) Fax: +1(403)

What is decision framing? Identifying problems and assessing situations Defining project objectives Generating alternatives and identifying risks using qualitative and quantitative risk analysis (e.g. Monte Carlo simulations)

Assessing Business Situation 1.Resource availability, including material and human resources 2.Cost of labor, materials, and supplies 3.Competition 4.Market situation, including potential market trends 5.Expertise available in the organization for the specific project 6.Business processes and best practices in the organization: are they suitable for the particular project 7.Organizational performance and corporate culture: are they suitable for the project 8.Legal and regulatory environment 9.Site specific issues, related to doing business in the particular area or country 10.Customer relationships 11.Weather and other environmental factors 12.Project funding “The Checklist”

Decision Conferencing Decision-maker Expert Decision Analysts

Brainstorming

Filter Diagrams Filter diagram is powerful tool for new product development

Example of Filters for New Idea, Technology, Solution Your idea should not be completely new. Avoid being a technology pioneer, they rarely succeed in business. Try to provide a better solution for existing problems. Your idea should be extendable. You should be able to build a number of products and services around this idea. Your idea should not be trivial. All trivial ideas have either been implemented or cost a lot of money to produce and market. Your idea should have a hidden technological value that would be difficult for somebody else to implement.

Creativity Creative thinking is key to developing alternative solutions

Example of Blocks Stereotyping Not Seeing the Forest for the Trees Inability to See the Problem from Another Perspective Fear of the “Far-Out” Alternative “Do Nothing” Bias Premature closing

Mind Mapping Tools Use mind mapping tools to identify risks

Force Field Diagrams Use Force field diagrams to identify threats and opportunities

Multi Criteria Decision Making 1.Economic indicators, such as net present value (NPV), rate of return (ROR), and project cost 2.Project duration indicators, such as total duration, finish time, duration of particular phase 3.Resource usage, including material and work resources 4.Project scope indicators, such as number of features implemented 5.Quality indicators, such as number of defects 6.Safety indicators, such as number of accidents 7.Environmental indicators, such as level of emissions

Fundamental and Mean Objectives

Identifying Risks 1.Duration and cost of activities 2.Lags between tasks 3.Resource allocation 4.Calendars: for example, certain days an be lost for example due to weather conditions 5.Work breakdown structures: certain tasks will be or will not be executed under certain conditions

Techniques For Risk Identification Documentation review: a review of relevant project documents associated with current and previous projects. If a plan is inconsistent with requirements, it can be a source for potential risks. Information Gathering Techniques: including brainstorming, the “Delphi” technique (see Chapter 11), interviewing, decision conferencing, and SWOT analysis. (strength, weaknesses, opportunities, and threats). Assumption Analysis; identify risks by reviewing inconsistencies or inaccuracies in original project assumptions. Diagramming Techniques, including flow charts, cause and affect diagrams, and influence diagrams, event chain diagrams, and mind maps

Generation Alternatives

Risk Breakdown Structures Risk breakdown structures (RBS) can be used for risk assessment in performing quantitative risk analysis on project schedules, cost, and other parameters

Risk Response Planning Dealing with threats: 1.Avoid 2.Transfer 3.Mitigate 4.Accept Dealing with opportunities: 1.Exploit 2.Share 3.Enhance 4.Accept

Risk Register The risk register should include a risk matrix that lists, ranks, and prioritizes project risks

Future Reading Lev Virine and Michael Trumper Project Decisions: The Art and Science Management Concepts, Vienna, VA, 2007 Project Think: Why Good Managers Make Poor Project Choices Gower, 2013

Questions?