1. Project Management: Risk, Procurement, Integration Professor Akhilesh Bajaj The University of Tulsa ©Akhilesh Bajaj All Rights reserved

2. Risk Management Metricize each deliverable (measure its quality).
What are the factors that could cause each deliverable to not be met?
What is the probability of each factor occurring?
What is the cost associated with slippage of the metric measuring each deliverable?
Stakeholder meetings are important. Expert reviews can help.
Risks can be:
Technical (requirements, technology, interfaces)
External (subcontractors, regulatory, market, customer, weather)
Organizational (project dependencies, resources, funding, prioritization)
Project Management (estimating, planning, controlling, communication)

3. Risk Management
Qualitative Assessment of Risks: Prioritize deliverables and the risks associated with them, and focus on only the ones most likely to cause damage.
Probability Impact Matrix: Y-axis probability from 1-5 (1=up to 20%, etc)
X-axis: Impact, form 1 to 5 (1 being minimal). Multiply the X value with the Y value. Risks that score over 15 may be the ones to look at.
Quantitative Assessment of Risks:
Quantify the impact of each risk in dollar terms. Use optimistic, likely and pessimistic values.
State the probability as a number between 0 and 1. Multiply the 2 to get quantitative impact of each risk.

4. Risk Management How to handle risk:
-Avoidance: Change the project so that risk is no longer there, perhaps the deliverable is no longer required, or it is executed in some other fashion.
-Transfer: Hire a specialist or consultant to reduce the risk.
- Mitigate: Spend more resources on that deliverable so risk is reduced.
-Accept: If the risk is low impact or beyond our control, then recognize it and accept it.

5. Risk Management How to handle risk:
-Avoidance: Change the project so that risk is no longer there, perhaps the deliverable is no longer required, or it is executed in some other fashion.
-Transfer: Hire a specialist or consultant to reduce the risk.
- Mitigate: Spend more resources on that deliverable so risk is reduced.
-Accept: If the risk is low impact or beyond our control, then recognize it and accept it.

6. Wedding Planning Example Activities List (all are primitive in this case)
Select cake
Decide theme
Decide venue
Make guest list
Mail invitations
Decide invitations
Plan
entertainment
Decide menu
Decide decorations
Select groomsmen
Select bridesmaids
Select bachelor
party venue
Select wedding
dress
Select bachelor
-ette party venue
Select wedding
vows
Select dresses
For bridesmaids
Select wedding
officiator
Select outfits for
Groom/smen

7. Wedding Planning Example (contd.) Risk Assessment and Management
Metrics: Overall budget<$10,000,
5 friends think it is at least 4 on a 1-5 hipness scale
Select cake
Decide theme
Decide venue
Risks: Friends may have divergent views on what is hip
Impact: Long term dissatisfaction with wedding, loss
of social standing with friends (4 on 1-5 scale)
Probability of Risk: 3 on 1-5 scale.
Risk Management: Transfer (hire wedding planner)
Mail invitations
Decide invitations
Make guest list
Plan
entertainment
Decide menu
Decide decorations
Select groomsmen
Select bridesmaids
Select bachelor
party venue
Select wedding
dress
Select bachelor
-ette party venue
Select wedding
vows
Select dresses
For bridesmaids
Select wedding
officiator
Select outfits for
Groom/smen

8. Procurements
Make or buy: In-house skills, time constraints, Intellectual property issues,
Data privacy, do we need competitive advantage from the deliverable?
Fixed price contracts: define deliverables tightly, create a planned payment schedule, hold some money back till each milestone is delivered.
One can offer incentive to the contractor to complete faster or under budget.
Cost-plus contracts: useful if scope is not well defined. Get contractor to submit costs and then pay them a profit plus costs. Can also offer incentive here to complete faster or under budget.
RFP: General functionality of deliverable along with constraints and quality measures.
RFQ: More detailed breakdown of work needed (includes drawings, requirements in detail, detailed metrics and detailed constraints)

9. Integration
Coordination Plan: Meeting schedule, sequence of management activities.
How will project changes be handled?
Suggested sequence:
Project Charter
WBS
Scheduling
Risk Management
Procurement Strategies
Co-ordination plan