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SE492 Week 8 Week 8: Discussion questions based on chapters 8 and 9. 1. Describe what needs to be done to manage risk on a project. When should this be d

SE492 Week 8 Week 8: Discussion

questions based on chapters 8 and 9.

1. Describe what needs to be done to manage risk on a project. When should this be d

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SE492 Week 8 Week 8: Discussion

questions based on chapters 8 and 9.

1. Describe what needs to be done to manage risk on a project. When should this be done? How can a risk assessment matrix help in this process?

2. Discuss what needs to be done as part of closing a project. Why are these activities important?

_____________________________________________

You are required to make at least one comment on the responses posted by your classmates with a minimum of 50 words. Make sure you design your response with your own words. Your responses to your classmates must be of substance; not just “I agree” or “Good Post.” The purpose of the responses is to convert the discussion forum into a quality academic environment through which you improve your knowledge and understanding. Read and review all assigned course materials and chapters before you start working on your assignments. CHAPTER 8

Managing Risk

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Teaching Strategies

The two vignettes in this chapter reinforce the necessity of identifying, assessing, and managing risks in projects. (See Premium Deck for Slides.)

The first vignette communicates that risk management starts early and continues through the project.

The second vignette examines the purpose and risks associated with the implementation of a clinical information system in a health care system.

Risk assessment should be completed for every project. Have students identify risks associated with an activity of their choice. This could be a concert that want to attend, or some other weekend plans. Have students evaluate the likelihood of occurrence. Have other students offer techniques for managing the risk.

Have students examine a project that has been presented recently in the news. Have them identify the risks that have caused the project to be delayed or to fail. Have students suggest how those risks could have been mitigated.

Optional Supplemental Activities

Have students read the real-world vignettes.

Have them read the chapter and answer all of the Reinforce Your Learning questions and the questions at the end of the chapter. (See Premium Deck for Slides.)

Have students research the lessons learned or any of the articles on the SPMN website then present their findings to the class.

Have students contact an author of the materials on the SPMN website and present what they learned from the author.

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Chapter Concepts

Identifying risks and their potential impact

Assessing the likelihood of occurrence and degree of impact of risks

Risk response planning

Monitoring risks

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Chapter Concepts

As mentioned in Chapter 1, one attribute of a project is that it involves a degree of uncertainty. Such uncertainty can impact the outcome of a project.

Risk involves an uncertain event that, if it occurs, can jeopardize accomplishing the project objective.

Risk management involves identifying, assessing, and responding to project risks in order to minimize the likelihood of occurrence and/or potential impact of adverse events on the accomplishment of the project objective. Addressing risks proactively will increase the chances of accomplishing the project objective. Waiting for unfavorable events to occur and then reacting to them can result in panic and costly responses. Managing risk includes taking action to prevent or minimize the likelihood of occurrence or the impact of unfavorable events.

A project manager cannot be risk averse. He or she must accept that risk is a part of project management and has to address it head-on. Furthermore, the project manager needs to set the tone for encouraging open and timely discussion of risks among the project team.

 

Based on what they learn in this chapter, students will become familiar with:

Identifying risks and their potential impact

Assessing the likelihood of occurrence and degree of impact of risks

Risk response planning

Controlling risks

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Learning Outcomes

Discuss what is involved in managing risks

Identify and categorize risks

Assess and prioritize risks

Prepare a risk response plan

Develop a risk assessment matrix

Monitor risks

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Learning Outcomes

After studying this chapter, the student should be able to:

Discuss what is involved in managing risks

Identify and categorize risks

Assess and prioritize risks

Prepare a risk response plan

Develop a risk assessment matrix

Monitor risks

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Project Risk Management

Project Management Knowledge Areas from PMBOK® Guide

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Project Management Knowledge Areas from PMBOK® Guide

Concepts in this chapter support the following Project Management Knowledge Areas of the PMI Guide to the Project Management Body of Knowledge (PMBOK® Guide):

Project Risk Management

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Identify Risks

Can jeopardize accomplishing the project objective

Brainstorm sources of risks

Establish categories for risks and evaluate

Use historical information

Progressively elaborate and identify new risks as more information becomes available

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Identify Risks

A risk is an uncertain event that, if it occurs, can jeopardize accomplishing the project objective.

Risk identification includes determining which risks may adversely affect the project objective and what the impact of each risk might be if it occurs.

Sometimes a sponsor identifies major risks in the project charter when the project is authorized.

A common approach to identifying the sources of risks is brainstorming.

Risks that are accounted for should be somewhat likely to occur and/or can have a significant negative impact on accomplishing the project objective.

Establishing risk categories may help to identify and evaluate risks.

Some possible categories are technical, schedule, cost, human resources, external, or sponsor/customer.

Historical information from past projects is another source that can be helpful in identifying possible risks.

The project team can progressively elaborate and identify new risks, as well as the estimated impacts of previously identified risks as more information becomes available.

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Assess Risks

Determine the likelihood the risk event will occur

Evaluate degree of impact on the project objective

Prioritize

Likelihood of occurrence and degree of impact

Position relative to the critical path

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Assess Risks

Risk assessment involves determining the likelihood that the risk event will occur and the degree of impact the event will have on the project objective.

Risks can then be prioritized based on the likelihood of occurrence and degree of impact

Risks on the critical path should be given higher priority because, if the risk occurs, it would have a greater impact on the schedule than if it was associated with activities on a path that has a large positive value of total slack.

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Risk Assessment Matrix

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Risk Assessment Matrix

This figure depicts a risk assessment matrix, a tool for assessing and managing risks.

It helps to:

List the impact of the risk

Evaluate the likelihood of occurrence

Determine the degree of impact

Identify the action trigger

Name a person responsible

Create a response plan to avoid, mitigate, or accept the risk

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Plan Risk Responses

Set of actions

Prevent or reduce the likelihood of occurrence or the impact of a risk

Implement if the risk event occurs

Establishes a trigger point for implementing an action

Assigns responsibility for implementation

Avoid, mitigate, or accept the risk

Include a contingency fund to cover implementation cost

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Plan Risk Responses

A risk response plan is a defined set of actions that seek to prevent or reduce the likelihood of occurrence or the impact of a risk.

The risk response plan is implemented if the risk event occurs.

Risk response planning involves establishing a trigger point for when to implement the actions to address each risk

It assigns responsibility to specific individuals for implementing the response plan.

A risk response plan can be helpful in avoiding, mitigating, or accepting the risk.

Project prices and budgets should include a contingency or management reserve to pay for additional costs associated with implementing response plans.

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Managing Risks for Information Systems Development

Risks can be categorized into seven types

Technological risk

Human risk

Usability risk

Project team risk

Project risk

Organizational risk

Strategic and political risk

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Managing Risks for Information Systems Development

Risks for information systems (IS) development are inherent in all aspects of an IS project. The risks can be categorized into seven types:

Technological risk

Human risk

Usability risk

Project team risk

Project risk

Organizational risk

Strategic and political risk

These categories help to explain the risks associated with developing systems that accept data inputs, process those inputs, and produce information for users.

Chapters 4, 5, 6, and 7 provided foundation information about the definition, scheduling, resources, and costs associated with IS development projects.

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IS Example: Risk Assessment Matrix

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

IS Example: Internet Applications Development for ABC Office Designs

This is a continuation of the web-based reporting system project that we have used as an example in previous chapters.

Beth wants to prepare for potential project risks so that the team can address them early enough that they do not impact the delivery date for the system.

Beth planned for the team to determine the impact of the risk, the likelihood of occurrence, the degree of impact if it does occur, the action trigger that will serve as a warning flag for the risk, who is responsible for the risk, and the response plan to avoid, mitigate, or accept the risk.

Beth reviewed the lessons learned from other projects to make sure that the project team discussed the risks from the other projects.

This figure depicts the Risk Assessment Matrix for Web-based Reporting System Project.

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Critical Success Factors

Identify risks and their potential impacts before the project starts.

Involve the project team or experts in assessing risks.

Assign high priority to managing risks that have a high likelihood of occurrence and a high potential impact on the project outcome.

Develop response plans for addressing high priority risks.

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Critical Success Factors

Identify risks and their potential impacts before the project starts.

Involve the project team or experts in assessing risks.

Assign high priority to managing risks that have a high likelihood of occurrence and a high potential impact on the project outcome.

Develop response plans for addressing high priority risks.

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Summary

Risk is an uncertain event that, if it occurs, can jeopardize accomplishing the project objective.

Risk management includes identification, assessment, monitoring, and response to project risks in order to minimize the likelihood of occurrence and/or the potential impact of adverse events on the accomplishment of the project objective.

Risk identification includes determining which risks may adversely affect the project objective and estimating what the potential impacts of each risk might be if it occurs.

Assessing each risk involves determining the likelihood that the risk event will occur and the degree of impact the event will have on the project objective, and then prioritizing the risks.

A risk response plan is a defined set of actions to prevent or reduce the likelihood of occurrence or the impact of a risk, or to implement if the risk event occurs.

Regularly review and evaluate all risks to determine if there are any changes to the likelihood of occurrence or the potential impact of any of the risks, or if any new risks have been identified.

© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.

Summary

Risk is an uncertain event that, if it occurs, can jeopardize accomplishing the project objective.

Risk management involves identification, assessment, monitoring, and response to project risks in order to minimize the likelihood of occurrence and/or potential impact of adverse events on the accomplishment of the project objective.

Risk identification includes determining which risks may adversely affect the project objective and estimating what the potential impacts of each risk might be if it occurs.

Assessing each risk involves determining the likelihood that the risk event will occur and the degree of impact the event will have on the project objective, and then prioritizing the risks.

A risk response plan is a defined set of actions to prevent or reduce the likelihood of occurrence or the impact of a risk, or to implement if the risk event occurs.

Regularly review and evaluate all risks to determine if there are any changes to the likelihood of occurrence or the potential impact of any of the risks, or if any new risks have been identified.

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