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Published byChristophe Viau Modified over 6 years ago
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About the speaker 26 years of experience with IBM
IBM Certified Executive PM 12 years Project Management Demand Supply Optimization (eBusiness – supplier collaboration $36M project and counting) ASCI White ($250M systems integration project) SP Hardware/Software Development ($210M multiple projects) Fiber Optic Product Development/Research ($25M project) Geographic Information Systems Development ($50M project) PMP Certified – 04/98
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Risk Management Tom Delaney, EPM PMP m 10/10/2003
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Risk Basics Two types of risk: Four steps to risk management:
Business Has upside and downside potential Pure Only downside potential Four steps to risk management: Identification Evaluation Mitigation Monitoring Three components of risk: Event Probability Impact by project phase Risk severity = probability x impact
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Identification Start with business or project objectives
Determine focus areas Determine risk drivers Then identify potential risk events Review the WBS Brainstorming Lessons learned Checklists Every risk event should be able to be tied back to a business or project objective.
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Evaluation Keep It Simple !! Impact Probability High Medium Low
Very High Keep It Simple !! Impact Probability 3 2 1 9 6 4
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Mitigation Avoidance Retention Reduction Transfer Contingency
Follow alternate course Retention Accept the consequences if the occur Reduction Take specific actions to reduce the potential of occurrence and/or the effect Transfer Place all of a portion of the risk on another party Contingency Set aside specific funds Set aside time within the project schedule
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Monitoring Watch the Very High and High risks
DAILY Try to make small improvements over time Major risks are rarely eliminated over night Very High & High risks, if left unattended, will cause you to fail. Watching Medium and Low risks closely may cause you to fail. you will run out of time working on these and you will not spend enough time on the Very High, High, schedule, cost, issues, etc.
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Advanced Risk Management with examples from….
The race for the: Biggest Badest & Fastest !!! The current fastest computer NEC Custom vector processor 100 Teraflops The bid to replace ASCI White with a 300 Teraflop system – ASCI Purple Cray is building a 1 Petaflop (1000 Teraflop) system Blue Gene/L – nearly 400 Teraflops and ¼ the size
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ASCI Purple Bid Bid with the Department Of Energy Proposal
Bid awarded to IBM in early 2003 Proposal Build a 100 Teraflop system by 1H 2005 Option for upgrade to 300 Teraflops 10x performance above ASCI White The most powerful system on earth – 2000/2001 2x performance above a custom built NAS system Unique architecture – 2002 Many High Risk items identified before the bid was submitted !
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Fills two basketball courts, almost all new technology, significant new software
Currently the #2 or #4 fastest computer in the world – depending on how you count
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Advanced Risk Management
Evaluate risk before and after the mitigation plan. You will find that some mitigation strategies don’t actually make the situation better – so find another strategy. Set a date for when to cut over to the mitigation strategy. Get management and stakeholder agreement to that at the beginning of the project. Quantify the impact in terms of cost or schedule if possible Instead of High, Medium, Low
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Advanced Risk Analysis
Criteria Criteria Multiplier Probability of occurrence High .8 Very likely to happen Medium .5 Might happen Low .2 Not very likely Impact Assessment Event Probability Multiplier Impact Risk Value 1 Medium .5 $500K $250K 2 High .8 $300K $240K
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Advanced Risk Analysis
Risk Description ASCI : Product Technology Delay impacts start of system test. Pre-Mitigation Impact Probability Overall High Mitigation Start testing effort with Old Product & complete initial buildup of New Product with prototype parts if production level parts are not available by January Pay scrap cost and upgrade to production level later. Rigorous management and review of all development project deliverables on a frequent basis to identify any critical path impacts. Executive prioritization of New Product for ASCI above other priorities to obtain scarce resources and funding. Post-Mitigation Medium This is just the summary. A 2+ page detailed analysis was completed for each risk. Description, Impact, Probability Multiple strategies for reduction, retention, avoidance, transfer Specific cut in dates identified to prevent Management inaction
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Advanced Risk Visualization
Happened Didn’t Happen Happened Didn’t
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Summary Embrace risk Risk is how you deliver more, faster Take prudent risk often Focus only on risk that will have serious impacts on the project Share your risk taking with the stakeholders Don’t surprise stakeholders with your risk taking Be willing to fail 20% of the time You will end up failing rarely and you will deliver “extra” Don’t be reckless
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Sound Bites “Development is not for the faint of heart”
Tony Befi, IBM VP of Development (ASCI White, 9 months behind schedule, it shipped on time) Have confidence in your (& your team’s) ability Speak the truth – even when it isn’t welcome Have fun when the going gets tough If it was easy they could get anyone to do it – instead they got you!
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