Upload
openlearninglab
View
1.902
Download
1
Embed Size (px)
DESCRIPTION
Citation preview
Leiden Institute of Advanced Computer Science
1
System’s Development and Project Management – Risk management and project escalation
Prof. Dr. Thomas Bäck
Leiden Institute of Advanced Computer Science Dates
Feb. 1 14:45 – 17:30 Introduction, Project Description Feb. 2 13:45 – 16:30 STEP WISE Approach to Project Planning Feb. 9 13:10 – 15:45 STEP WISE Approach to Project Planning,
SAVE ENERGY Case Feb. 15 14:45 – 17:30 Selecting an Appropriate Software Dev.
Approach Feb. 16 15:15 – 18:00 Activity Planning and Resource Allocation Feb. 22 14:45 – 17:30 Software Effort Estimation Feb. 23 13:15 – 15:45 Risk management, project escalation Mar. 1 14:45 – 17:00 Exam Mar. 2 13:45 – 16:30 Risk Management, Project monitoring and
control Mar. 8 14:45 – 17:30 Software Quality Assurance Mar. 9 13:45 – 16:30 Managing People; Contract Management Mar. 18 15:00 – 17:00 Trade Fair
2
Leiden Institute of Advanced Computer Science
3
Deliverable Planning
February 18, midnight Assignment 1: Project proposal (‘bid’)
February 25, midnight Assignment 2: Project Plan including functional specification
March 7, midnight Assignment 3: Deutsche Bank case, 5 ppt slides
March 1 (14:45 – 17:00) Exam
March 18 (15:00 – 17:00) (setup from 14:00)
Trade fair, Plantsoen 97, Leiden
March 18, midnight Assignment 4: Personal ref lect ion paper on project management
Leiden Institute of Advanced Computer Science
4
STEP WISE overview
1. Identify project objectives 0. Select Project 2. Identify project infrastructure
3. Analyze pr. characteristics
4. Identify products and activities
5. Estimate effort for activity
6. Identify activity risks
7. Allocate resources
8. Review / publicize plan 9. Execute plan
10. Lower level planning
For each activity
Review lower level detail
Leiden Institute of Advanced Computer Science
5
Evaluation
! Not unusual to spend between 6-12 months and 40% of total acquisition and implementation cost on package evaluation with major customers.
! Make or buy? ! Buying is attractive when money available but
other resources are short. ! Hazards, because staff time and attention is
needed to manage such projects successfully.
Leiden Institute of Advanced Computer Science
6
Nature of risk
! Describes non-desirable events or outcomes (vs. opportunities)
! Risk management concerned with: ! Events or hazards ! Outcomes or problems ! Action plans
! Includes assessment of likelihoods, seriousness, costs and effectiveness of action
Leiden Institute of Advanced Computer Science
7
Types of risk
! Caused by estimation difficulties ! Some tasks are more difficult to estimate
! Caused by assumptions made during planning process ! Important to continuously list all assumptions and
their likely effects ! Eventualities: Unforeseen hazards occurring
! Reduction through sound planning
Leiden Institute of Advanced Computer Science
8
Managing risk
Risk analysis Risk management
Risk evaluation Risk estimation Risk identification
Risk monitoring Risk control Risk planning Risk directing
Boehm’s risk engineering task breakdown
Risk staffing
Risk engineering
Leiden Institute of Advanced Computer Science
9
Managing risk (cont‘d)
! Risk analysis: ! Risk identification - listing all hazards which could
affect project ! Risk estimation - likelihood and severeness of
hazards ! Risk evaluation - ranking and determination of risk
aversion strategies
Leiden Institute of Advanced Computer Science
10
Managing risk (cont‘d)
! Risk management: ! Risk planning – drawing up contingency plans ! Risk control – quality control and dealing with
emergent problems ! Risk monitoring – an ongoing activity ! Risk directing ! Risk staffing
Day-to-day risk management
Leiden Institute of Advanced Computer Science
11
Hazard identification
! Application factors ! Staff factors ! Project factors ! Project methods ! Hardware/software
factors ! Changeover factors ! Supplier factors ! Environment factors ! Health and safety
factors
Factors should be considered for each activity individually, involving the whole project team
Leiden Institute of Advanced Computer Science
12
Hazard analysis
! Most favored ranking method is to calculate risk exposure ! Risk exposure RE = risk likelihood * risk impact
! Alternative - scoring methods: ! Likelihood ! Impact ! Timeframe
Leiden Institute of Advanced Computer Science
13
Hazard analysis (cont‘d)
! Risk prioritization ! Reducing risk exposure by decreasing likelihood
and/or impact ! Contingency plans
! Risk reduction leverage (RRL) ! RRL=(REbefore-REafter)/risk reduction cost ! Monetary values recommended ! RRL > 1: We can gain from implementing the risk
reduction plan
Leiden Institute of Advanced Computer Science
14
Risk planning and control
! Hazard prevention ! Likelihood reduction ! Risk avoidance ! Risk transfer ! Contingency planning
Leiden Institute of Advanced Computer Science
15
Evaluating schedule risks
! In contrast to CPM, PERT requires three estimates: ! Most likely time (m) ! Optimistic time (a) ! Pessimistic time (b)
! Activity-on-arrow diagram ! te=(a+4m+b)/6, s=(b-a)/6, z=(T- te)/s ! Expected duration te, s-dev s., no. of s-dev.s
between target and expected date z
Leiden Institute of Advanced Computer Science
16
Event number Target date
Expected date Standard deviation
Notation
Leiden Institute of Advanced Computer Science
17
Evaluating schedule risks (cont’d)
1. Use expected durations for forward pass 2. Calculate standard deviations for each
project event (add squares and find square root of sum)
3. Calculate z-values - number of standard deviations between expected and target dates
4. Convert z-values to probabilities If there are several possible Paths: take largest standard deviation
Leiden Institute of Advanced Computer Science
18
Example: Convert to activity-on-arrow diagram!
A
B
C
D
F
E
G
ES = day 0
Duration 5
Duration 6
Duration 10
Duration 9
Duration 8
Duration 3
Duration 4
Leiden Institute of Advanced Computer Science
19
Example: (now activity on arrow!)
1 0
2
A 5
5
4
3
D=9
C 10
B=6
7
6
E 8
F 3
8 G
4 9
10
11
Leiden Institute of Advanced Computer Science
20
Activity a m b te s z T Prob.
A 4 5 6
B 4 6 8
C 9 10 12
D 8 9 10
E 5 8 11
F 1 3 4
G 3 4 5
Complete the table Most likely time Pessimistic time
Optimistic time
Leiden Institute of Advanced Computer Science
21
Example: t_e and standard deviations
1 0
2
A t=5
s=0.33
5
4
3
7
6
8
9
10
11
B t=6
s=0.67
C t=10.17 s=0.5
D 9
s=0.33
E t=8 s=1
F t=2.83 s=0.5
G t=4
s=0.33
Leiden Institute of Advanced Computer Science
22
Activity
a m b te s z T Prob.
A 4 5 6 5 0.33
B 4 6 8 6 0.67
C 9 10 12 10.17 0.5
D 8 9 10 9 0.33
E 5 8 11 8 1
F 1 3 4 2.83 0.5
G 3 4 5 4 0.33
Complete the table (a+4m+b)/6
(b-a)/6
Leiden Institute of Advanced Computer Science
23
Example: Expected dates
1 0
2 5
A t=5
s=0.33
5 14
4 15.17
3 11
7 14
6 15.17
8 23.17
9 16.83
10 23.17
11 27.17
B t=6
s=0.67
C t=10.17 s=0.5
D 9
s=0.33
E t=8 s=1
F t=2.83 s=0.5
G t=4
s=0.33
Leiden Institute of Advanced Computer Science
24
Example: Cumulative standard deviations
1 0
2 5 0.33
A t=5
s=0.33
5 14 0.47
4 15.17 0.6
3 11 0.75
7 14 0.75
6 15.17 0.75
8 23.17 1.25
9 16.83 0.9
10 23.17 1.25
11 27.17 1.29
B t=6
s=0.67
C t=10.17 s=0.5
D 9
s=0.33
E t=8 s=1
F t=2.83 s=0.5
G t=4
s=0.33
Leiden Institute of Advanced Computer Science
25
Evaluating schedule risks (cont‘d) ! Monte Carlo simulation as an alternative
! Calculates large number of activity completion dates
! Random selection of activity times from set of estimates
! Input depending on available information, e.g. historic project information
! Output can take form of graphs and summaries
! Specialized software packages available ! Interfaces to project planning and spreadsheet
software ! Cost, resource, and duration estimates
Leiden Institute of Advanced Computer Science
26
ICT project management 'runaways’…
! Standish "Chaos" report ! 1994:
• 16% success, • 31% cancelled • 53% challenged
! 2000: • 34% successful • 15% cancelled • 51% challenged
Leiden Institute of Advanced Computer Science
Project Management & Success ! Technical issues
! Hardware/software/telecommunications systems don't work
! Frequent failure/errors in operation ! Economic issues
! Time or budget overrun ! Low/no ROI (“productivity paradox”)
! Organizational (implementation) issues ! Resulting system fails to achieve desired benefit ! Users reject system
success34%
challenged51%
cancelled15%
Leiden Institute of Advanced Computer Science
28
Project Escalation
! Continued commitment in the face of negative information about prior resource allocations coupled with uncertainty surrounding the likelihood of goal attainment (Brockner, 1992)
Project Escalation
Psychol. Factors
Project Factors
Social Factors
Organiz. Factors
Leiden Institute of Advanced Computer Science
29
Escalation factors
Project factors: ! Objective features of
the project ! Perception by
management ! Costs and benefits
associated with the project
! Difficulties (risk) and duration
Risk of escalation: ! Large potential payoff ! Long-term investment
to reap gains ! Setbacks perceived as
temporary problems
Leiden Institute of Advanced Computer Science
30
Escalation factors (cont‘d)
Psychological factors: ! „Things do not look that
bad“ ! Continuation will
eventually lead to success
! Project manager’s previous experience
! Emotional attachment
Risk of escalation: ! Errors in processing
information ! Throwing good money
after bad ! Self-justification
Leiden Institute of Advanced Computer Science
31
Escalation factors (cont‘d)
Social factors: ! Competitive rivalry with
other social groups ! Needs for external
justification ! Norms for consistency
Risk of escalation: ! Competition between
decision-making groups ! “Staying the course”
Leiden Institute of Advanced Computer Science
32
Escalation factors (cont‘d)
Organizational factors: ! Structural environment ! Political environment,
i.e. top management support
! Institutionalization with organizational goals and values
Risk of escalation: ! Strong top management
support ! Institutionalization
Leiden Institute of Advanced Computer Science
33
Deaf effect
Weak Strong
Mum
effe
ct
Wea
k S
trong
Organizational contexts of whistle blowing
Healthy organization
Ostrich organization
Deaf-dumb-blind organization
Cover-up organization
Leiden Institute of Advanced Computer Science
34
Organizational contexts of whistle blowing (cont’d)
! Mum-effect (reluctance to blow the whistle) ! Risks to own career ! Fear of reprisals ! Critical audit may
contradict best judgment and vested interest of powerful people
! Deaf-effect (reluctance to hear the whistle) ! Organizational
leapfrogging as a remedy ! Executives insulate
themselves from dealing with non-urgent problems
! Disassociating from failing endeavor
Leiden Institute of Advanced Computer Science
35
Implication for project management practice ! IT managers:
! Traditional project management approaches build on rational philosophy
! Expand with behavioral and organizational perspective
! Recognize tendency to over-commitment ! Alternative courses of action
Leiden Institute of Advanced Computer Science
36
Implication for project management practice (cont’d) ! Organizations:
! Match project management with development stage
! Continuous risk assessment • Probability of technical success • Probability of customer acceptance
! Serious project audits, e.g. review boards with appointed members
! Reduce need for self-justification, e.g. by dividing initial and subsequent decision-making