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Project Risk Management, Communication

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Gajani Baskaran

on 17 May 2016

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Transcript of Project Risk Management, Communication

Project Risk Management
It is process concerned with identifying, analyzing and responding to uncertainty (throughout the project cycle).

A key component of project management is making decisions with a high degree of certainty of the outcome.
Project Life Cycle
This provides an informative overview how the level of risk changes as the project progresses through project phases
Risk Management Responsibility
Risk Continuum
Total Risk
No Risk
Risk management
plan and control
Source: Rory Burke (2003). Project Management: Planning and control techniques. Chapter 18.
Status Reports
Earned value
Variance Reports
Trend Reports
Exception Reports
Monthly Reports
Various types of project reports
Project charter
Project OBS
Build Method
Document control
Configuration Management
Typical agenda of the of handover meeting include...
Project communication can be transmitted in many forms

Formal written: letters, faxes, email, memos, minutes, drawings, specification and reports.
Formal verbal: telephone, meetings ,video- conference
Informal verbal: casual discussion between friends
Non verbal: body language.

Communication Medium
The purpose of document control is to ensure that key documents are sent timelessly to predefined list of key people and there is an audit trail of transmittals.

The key documents would include the contract, specifications, drawings schedules, reports and letters.

The key people would be identified by the project organization structure and the lines of communication.
Document Control
Projects data can be collected processed and reported in many ways. The format (Structure) frequency and circulation of reports needs to be established during the startup phase of the project.

The reports should be designed to assist problem solving and decision making by the various levels of management so that they can ensure the project will meet its stated goals and objectives.
Project Reporting
Configuration Management
Document control
A typical progress meeting would contain the following...
Progress meetings are generally held every week to monitor the progress and guide the project to completion.

Progress meetings provide an effective forum for the project to co-ordinate, integrate and manage the project’s participants.
Project Progress Meeting
Purpose of the handover meeting is to formally commence the project , project phase or sub contract. This meeting set the sense for the project and establish how it will be managed

Attendance would normally include the client , senior management ,project team members and other concerned parties, contractors , suppliers and stake holders.

Handover Meeting
The objective should be to send sufficient information for the recipient to participate,
make good decision and feel involved and part of the project
What information should be communicated..
A line of communication may be defined as a formal or informal link between
two or more people, departments, companies, suppliers, contractors or stakeholders.

The lines of communication tend to follow the organization chart. which not only outlines the managers position .but also responsibility, authority and who reports to whom.
Lines of communication
Projects are particularly prone to the communication difficulties because of the unique nature of the projects and the matrix organization through which they are generally managed.

There may be overlapping responsibilities
Decentralized decision making
Complex Interfaces
Why communication important to projects ?
The process required to ensure timely and appropriate generation, collection, dissemination ,storage and ultimately disposition (disposal) of project information.

PMBOK defines project communication management as..
An audit may be defined as an investigation, inspection or survey of a system or product, where the actual or measured condition is compared with the planned condition, required condition or declared condition.

Auditing the project Management System
Audit the project management system against best practices to ensure the management function will be able to achieve the project’s objectives.
Audit the implemented project management system against the declared system
Quality Audit
PMBOK defines quality planning as.,
“Identifying which quality standards are relevant to the project and determining how to satisfy them”

Company’s Quality Policy – Applies to the whole company and may be formalized through ISO 9000

Project’s Quality Policy – May be necessary to tailor your company’s quality mgt. system to meet the needs of the client and the product. This can be achieved through project quality plan.
Quality Planning
Internal Failure costs

These costs relate to expenses incurred within the company due to product failure and inefficiencies.

External Failure costs

These costs relate to expenses incurred outside the company usually motivated by the client.
Quality Costs

Quality costs are a combination of management costs. There are four types of costs.

Prevention costs
Appraisal costs
Failure costs – Internal
Failure costs – External
Quality Costs
Quality Planning

The process of identifying the quality standards the project needs to comply with, to achieve the required condition and satisfy the terms of the contract.

Quality Control

Is the process companies go through to confirm the product has reached the required condition. It defines the method of inspection , in process inspection and final inspection to confirm the product has met the required condition.
Quality Definitions
PMBOK (project mgt. body of knowledge) defines project quality management as., “ the processes required to ensure that the project will satisfy the needs for which it was undertaken both the management of the project and the product of the project”

APMBOK (Association of Project mgt.) “covering quality planning, quality control and quality assuarance”
Quality Management
Quality Definitions
Quality Costs
Quality Planning
Quality Circles
Quality Audit
Quality Control Plan
Quality Management
The quality control plan offers the facility to impose the predetermined work sequence that we want, rather than what the production department may determine as resource efficient at the time

Quality control plan lists the sequence of work and the level of inspection.
Sequence of work – Determined by the build method and network diagram
Level of inspection – Determined by level of control and risk
Quality Control Plan
Audit Benefits
It provides a wealth of information
The data collected is actionable
The approach is objective
The auditor should be an independent expert with no personal agenda

Audit Problems
There can be unintentional bias on the part of Auditor
Auditor’s experience may unique and provide misleading evidence
An Audit can only be carried out infrequently due to its complexity
The results may be too detailed
Quality Audit
Management concept the Americans set up for Toyota cars in Japan to continuously improve their manufacturing process by bringing all the people in a production line together to identify and solve problems.

Objectives – To improve communication between all parties in the same product line. (planning and production)
Quality Circles
Prevention costs

These are the expenses associated with steps taken to make sure the product will be made to the required condition.

Appraisal costs

Appraisal costs relate to expenses incurred while checking and inspecting the work to confirm that it has achieved the required condition.
Quality Costs

Considers the wider aspects of quality by amalgamating all of the quality mgt. features. Total Quality has a people and outcome focus. It first identifies what the client really wants, how it can best be achieved , keeps an emphasis on continuous improvement, but always wants to keep the customer satisfied.
Quality Definitions
Quality Control Plan

Quality control plan integrates the project schedule with quality control, by listing the sequence of work, performance requirements, inspection requirements and hold points

Quality Circles

Management concept the Americans set up for Toyota cars in Japan to continuously improve their manufacturing process by bringing all the people in a production line together to identify and solve problems.
Quality Definitions
Quality mgt. philosophy

The involvement of all project participants to ensure the goals and objectives of the project and resulting product, facility or service meet the needs of the client, project team and other stakeholders.

Quality Assurance

Is a systematic process of defining, planning, implementing and reviewing the management processes within a company, in order to provide adequate confidence that the product will be consistently manufactured to the required condition.
Quality Definitions
The ultimate responsibility is in Managing director to the board of directors and stake holders.

But this responsibility is delegated to functional managers for their department's risk and project managers for project risk

This is process of pushing risk responsibility down the hierarchy is consistent with risk management (empowerment)

Each person is accountable for the risk incorporated with in their scope of work

Disaster recovery plan part of a selected manager's role to keep the loss or damage in acceptable level
Define Objectives
Risk Identification
Risk identification is probably the hardest and most important part of the risk management process, because if you cannot identify a risk, it will be executed from further analysis and probably find no respond to it.

The process of risk identification is not a one time event, but rather a continuous process, its frequency depending on the level of risk on the project and schedule of meetings.
Why project fails....?!
Innovation - very low or high
Lack of Stakeholder commitment
Poor communication
Misinterpreting the scope of work
Poor estimating
Inadequate planning
Insufficient reviews and control
Risk is defined as any constraint that prevents us to achieving the project's 'objectives'.

It is necessary to define the these goals and objectives.
Techniques for identifying risk includes..
Analyzing historical records- closeout reports
Structured questionnaires
Structured interviews
Structured check list
Flow chart
Judgement based on knowledge and experience
System analysis
Scenario analysis (what-if)
Risk Quantification
The next step is to quantify the probability of the risk occurring and the impact to the project.
There are two types of risks
Recurring conditions - Objective analysis
Non-Recurring conditions - Subjective analysis
Fig. Probability / Impact Matrix
Risk Response
Eliminate risk
Mitigate risk
Deflect risk
Accept risk
Project contracts means of deflecting risk, usually away from the client to the contractor.
How the client and contractor share the risk by,
Fixed price contract
Cost plus contract
Unit rates contract
Turnkey contract
BOOT contract
Source: Rory Burke (2003). Project Management: Planning and control techniques. Chapter 18.
Source: Rory Burke (2003). Project Management: Planning and control techniques. Chapter 18.
Source: Rory Burke (2003). Project Management: Planning and control techniques. Chapter 18.
Source: Rory Burke (2003). Project Management: Planning and control techniques. Chapter 18.
Source: Rory Burke (2003). Project Management: Planning and control techniques. Chapter 18.
Risk Control
This control function implements the risk management plan to make it happen.

This has to be communicated to all project participants
Disaster Recovery Planning
Disaster recovery planning is essentially a contingency response from the risk management planning but due to unique nature and size of the problem it is probably best managed as a separately - a project

Develop a disaster recovery plan
Control the disaster recovery plan
and when time comes - implement the disaster recovery plan quickly and effectively
Full transcript