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Risk Management for Project Sponsors June 2011 1 What we’ll cover • • • • Project Management Overview Project Accountabilities What is Risk Management The Process of Risk Management • Common Risks 2 What is Project Management? • Project Definition: A project is a temporary endeavor undertaken to create a unique product of service • Project Management: The disciple of planning, organizing and managing resources to achieve the successful completion of specific project goals and objectives 3 Key Roles & Responsibilities • Project Manager: – – – – Manages project resources Predicts cost and schedule Reports to the sponsor Says “no” to un-approved work • Project Sponsor: – The executive who owns the investment. “I want this, & I’m willing to pay for it” – Approves scope, priority, schedule & budget – Manages user expectations – Removes barriers 4 Why Project Management? Project success rates for organizations without effective project management practices: • 31% of projects are cancelled before completion • Only 12% are completed on schedule and within budget • Average cost overrun is 189% • Average time overrun is 222% (Source the Standish Group) 5 Have You Ever Heard This? • How could we have spent $500k and have nothing but a couple of deliverables from a vendor? • How did the project “all of the sudden” become over budget when my weekly reports said we were fine? • The users designed this system and were in on every decision. Now they hate the system and are blaming IT 6 The Triple Constraint “Good, fast, cheap. Pick any two!” - Project manager’s old adage Risk Schedule Scope Quality Resources Budget 7 Remember - Always Scope, schedule & budget are linked. If one changes, one or both of the others must change 8 Sponsor Sets Priority Pick one • Project must be delivered on time or • Project must be within budget or • Scope is fixed 9 What is Risk Management? The process involved with identifying, analyzing & responding to risk • Maximize positive events & minimize consequences of adverse events • Identify problems early focus on prevention 10 The Process of Risk Management Sponsors must manage their investments: • Create a safe environment - problems will happen • Solicit feedback from users & other external sources • Meet routinely with project manager to review performance Review summary of quantitative performance measures Expect results of routine risk assessments Follow-up on mitigating actions Require consistent and routine performance reports • On high risk projects request independent reviews 11 How Do I Get Started? • Have a knowledgeable person set up & lead the process • Train your staff • Expect consistent & reliable information • Be consistent • Review results with project manager 12 Fleet Management System (FMS) Project Dashboard 5/9/2011 Budget Budget $948,000 Budget for Fleet Management System (FMS) (Includes Fuel) Expended $144,225 Actual expenses Encumbered $803,775 Encumbered amount Major Accomplishments • • • • Vendor has responded to the Fleet Management System Requirements Configuration and Development Master lists have been finalized AgileAssets Statement of Work has been submitted for ITD approval. The Configuration effort for FMS has begun. Upcoming Events • Demonstration of the initial Fleet Management System will be provided by AgileAssets to the FMS Core team. • Development efforts for the FMS to Advantage interface is schedule to begin early in May. • The first milestone for a set of configuration items is scheduled for completion in early June Major Risks • Matt S. has been assigned to perform the Business Administrator function for FMS. Matt’s availability to perform this role may be impacted by his other duties as the TAMS administrator. • AgileAssets does not have a Project Manager assigned. They are approximately 4 – 6 weeks out for having a replacement Project Manager. IN the short term Kevin Green will perform this function. Due 2/4/2011 4/25/2011 Milestone PMO Planning documents completed Requirements and design documents complete. Risk Remarks/Mitigations The approval of the SOW has been delayed. Configuration and development work by AglieAssets continues so the schedule impact is relatively minor. The system and functional requirements Have been submitted to AgileAssets. In addition, the AgileAssets PRD’s are completed and the CML/DML setup. 5/13/2011 Fuel System replacement direction decided The decision has been delayed waiting on a vendor demonstration of their capabilities. 7/12/2011 Interface development, EMS Conversion and system configuration is 50 % complete 50% of the configuration and interface development has been approved by the Core team. 9/15/2011 Interface development, EMS Conversion and system configuration is 100 % complete. All of the configuration and interface development has been approved by the Core team. 10/21/2011 Report development completed Fleet management operational reports have been approved by the core team 1/17/2012 Testing is completed All testing from System through User Acceptance has been completed. 3/12/2012 System implementation The system is in the production environment, the users have been trained and are using the system to manage the daily activities related to the Fleet. 4/5/2012 Project close All project documentation is completed. 13 Sample Metrics Central Issuance Weekly QA Status Report – 04/15/2011 Role of Quality Assurance (In a Nutshell) Act as quality liaison and champion for business between ITD and L1. Define and execute ITD and L1 Integration test scenarios based on design specifications. Assist ITD personnel in creation of supporting documentation and process. Prepare for formalized User Acceptance Test pass. Integration Metrics Defect Discovery Rate As hoped, L1’s defect discovery rate appears to have peaked on 4/6 and is now trending downward as build quality continues to improve. The ITD defect discovery rate continues to remain relatively constant as reactionary integration bugs are discovered and fixed by the team. ITD Integration Phase Execution Status Testing “Feature” Area Priority One Scenarios Capture Workstation IDSuite Interim Documents Permanent Prints Special IDs Undercover Issuances Image Server Mig. LE Data Feed Reporting Console ITD Web Apps L1 Web Apps Test Status Test Complete Test Complete 2nd Pass Complete Test Complete 2nd Pass Complete 2nd Pass Complete 1st Pass Complete Test Complete nd 2 Pass Complete 1st Pass Complete Test Complete Test Complete Historic Integration Phase Bugs by Priority Priority Priority Priority Priority 1: 2: 3: 4: Must fix immediately Must fix before entering UAT phase Fix if time allows Out of project scope (new functionality) 14 The Process of Risk Management 15 Common Risks 16 Schedule & Budget Slippage Symptoms: • Schedule slips but you are assured it will made up • Lack of quantitative basis for schedule – “Feeling good about how we’re doing” • Schedule and budget never change • Scope increases but there is no change to budget or schedule 17 Schedule & Budget Slippage Consequences: • Projects delivered late and over budget • Lack of user satisfaction • Inadequate funding • Credibility • Resource conflicts 18 Schedule & Budget Slippage Mitigating actions: • Approve scope, schedule & budget estimates BEFORE you start • Insist on quantitative basis for schedule & budget projections • Focus on the future, not the past • Predict schedule & cost routinely • Always have a contingency fund 19 No Definition of Done Symptoms: • No time to plan- “we have to get started” • Resistance – “We know what we want!” • Repeated surfacing of unexpected additional work • No understanding of expected benefits • Disagreement among stakeholders about what they are getting • Insist on exit criteria for major milestones - If there are no Exit Criteria, how will you know you’re done? 20 No Definition of Done Consequences: • Needed work is not visible or adequately planned • User dissatisfaction- “They didn’t give me anything I asked for” • The project just keeps going and going and going 21 No Definition of Done Mitigating actions: • “Done” must be documented and approved before the schedule and budget are set • Should include: – Product Description – Expected benefits – Proof of success • Define what the project is NOT going to do 22 Ineffective Sponsor & Project Manager Symptoms: • Priorities are vague and the project lacks focus • Resource needs are unclear or don’t they participate • Project schedule & budget either do not exist or are not based on quantitative information • Scope is undefined, unclear & unpredictable • Critical decisions pend for a long time 23 Ineffective Sponsor & Project Manager Consequences: • Schedule slippage • Unnecessary work performed • Cost overruns • Users have not updated their business practices & are not prepared for the new product • Poor staff morale • Reputations are harmed 24 Ineffective Sponsor & Project Manager Mitigating actions: • Ensure sponsor has an interest in the project’s success - fiscal & program responsibility • Skilled project manager – not operations manager • Require & review metrics to measure quality, budget & schedule • Don’t just hope things will get better- take action 25 Incomplete Requirements Symptoms: • There aren’t any • Non-measurable, vague – can’t be tested • Are not aligned with project objectives or definition of done • Vendor cost estimates are not consistent 26 Incomplete Requirements Consequences • Low quality product that does not meet the user’s needs • Numerous change order requests resulting in schedule slippage & budget overages • Constant conflict between state & vendor • Blame game 27 Incomplete Requirements Mitigating Actions • Take time to Plan, Define Done, Set one priority scope, schedule or budget • Utilize skilled staff/contractor- This is HARD! • Process maps, use cases etc. • Utilize templates – Requirements traceability matrix • Ensure final product satisfies the requirements 28 Shannon Barnes PMO Manager Idaho Transportation Department 29