Presentation on theme: "1 Insuring Project Success by Knowing What Questions to Ask and Where to Get the Answers ® Donna Dufner, PhD, MBA, MS, PMP University of Nebraska at Omaha."— Presentation transcript:
1 Insuring Project Success by Knowing What Questions to Ask and Where to Get the Answers ® Donna Dufner, PhD, MBA, MS, PMP University of Nebraska at Omaha The Peter Kiewit Institute College of Information Science &Technology Information Systems and Quantitative Analysis Omaha, Nebraska, USA firstname.lastname@example.org@mail.unomaha.edu or email@example.com@cox.net November 2, 2007
3 Use the Best Project Management Tools and Resources Project Management Institute Body of Knowledge (http://www.PMI.org)http://www.PMI.org Provides a project management structure for managing and controlling a project IEEE Standards (http://www.IEEE.org)http://www.IEEE.org Provides best practices and how to perform them. Experience (lessons learned)
4 Plan Using the Project Management Knowledge Areas Project Management Integration Project Scope Management Project Time Management Project Cost Management Project Quality Management Project Human Resource Management Project Communications Management Project Risk Management Project Procurement Management
5 Use a Structure for Managing the Project e.g., Project Management Lifecycle Initiation – Project Charter and Funding Planning – knowledge area plans Executing – performing the work of the project Building the product of the project Monitoring and Control Looking for variances Closing Closing accounts Accepting no further charges to the project accounts
6 Short Comings of all PM Methods Estimates are based on historical information Variances based on tracking project actual costs and schedule against estimates are based on historical information (reactive)-not accurate Earned Value Analysis is the main tool for forecasting project costs and schedule (proactive)- greater accuracy
7 Main Reasons Projects Fail or are Challenged Miscommunication Subject matter misinformation Overlooking important stakeholders Deficient risk analysis
8 The first three reasons for failure have to do with stakeholders Identification Communication Subject Matter Expertise
16 How does one manage project risk? Identify risks Use the stakeholder expertise Look for anything that can impact the achievement of project goals Look for risk triggers Identify opportunities Ask experts
17 Characteristics of risks Risks are not linear Risks are both challenges and opportunities. Risks are time dependent. Risks interact. Risk interaction is not linear in impact. Risks may reoccur.
18 Identifying Risks from Triggers Where do project constraints fit into risk analysis? What are risk triggers? Feasibilities of task estimates, resource availability, slack time, etc. Large deliverables.
19 Calculating Risk Impact Is Problematic Probabilities are subjective. Probability of occurrence multiplied by the expected impact for a task, for a path in the precedence network, for the project. This does not work for interacting risks. Identify bottle necks.
20 Why didn’t you know your project was challenged?
21 Some tips that your project is in trouble. Scope Creep Triggers The project plan has not been baselined. The project end date has changed. Tasks have been added or deleted from the schedule. Estimated effort has changed.
22 Responding to Risks: Project compression Types of compression Crashing Fast-tracking Adds more risk to the project. Adds more cost to the project. Compression must be evaluated for costs and risks.
23 To Insure Project Success Plan, plan, plan Incremental development with prototyping Implement a change control process and make sure everyone uses it. Meet regularly for project review Assign action items to everyone Baseline the project Use Best Practices (IEEE and PMI) Use experts
24 The Critical Path Is the longest path through the project network. Is not necessarily the riskiest path. There are probably going to be multiple critical paths. Identify the riskiest path by looking for the riskiest tasks and their interaction
25 Looking Back at the Challenger Disaster, Enron’s Collapse, and the Anthrax Clean-up at the State Department Risk Management: Who Pay’s
26 The Challenger Disaster What have we learned?
27 Some History Source: Maier, 2002 More than 25 years since the disaster Known facts Jan. 27, 1986 Morton –Thiokol (the Utah based Rocket manufacturer) instructed NASA not to launch the Challenger on Jan. 28, 1987 Thiokol’s top expert on the O-ring seal believed the projected temperature of 29 deg. F at launch would cause O-ring seal failure Serious O-ring damage had occurred in a past launch at a temperature of 53 deg. F. NASA challenged Thiokol’s recommendation After a brief conference Thiokol reversed the recommendation to accommodate a high ranking customer, NASA
28 Three Little Known Facts Source: Maier, 2002 Thiokol was not the only contractor to recommend stopping the launch. Rockwell also recommended the launch be stopped. The astronauts did not die immediately in the explosion but later when the flight deck broke away and the orbiter slammed into the ocean 2 min. and 24 sec. later after an 8 mile fall. The veracity of the entire public record is questionable.
29 Why did - Thiokol reverse their original recommendation to stop the launch? Rockwell’s communication, “Rockwell feels it is not safe to launch.” fall on deaf ears?
30 Some Risks Identified The organizational culture at NASA The relationships with contractors Core values Blind faith in the procedures Strict observance of the chain of command Blinders- Limit one’s concerns to one’s job Obey the manager Short-term results drive everything Meet project goals regardless Distort or suppress bad news
31 The Role of Risk at NASA Risk taking culture Evaluation of risk focused on the probability of occurrence Risk analysis was performed with incomplete and distorted information No focus on the impact or consequences
35 The Enron Collapse: questions for discussion What risks (problems) can you identify that might have contributed to the collapse of Enron? Where and why did it go wrong? What were the main reasons for Enron’s collapse? What part did risk play? Could this happen in some part of your company? How easy is it to bend or break rules? What is the importance of values? Who pays?
36 Enron filed for Bankruptcy 12/2/01 High profile leader in the world of energy Many employees had their entire retirement invested in Enron Enron had been lauded by McKinsey, frequently as an example of an innovative company
37 What Happened? Elements of a Ponzi Scheme Extensive use of “aggressive’ accounting policies e.g., Special Purposes Entities
38 The real picture By the end of 1987, Enron’s debt was 75% of its market capitalization Managing the debt load was a constant problem 1990 conflict internally over the strategic direction of the company Two directions were pursued which place strain on the balance sheet Investing in physical assets Expanding its trading activities
39 The real picture continued Enron’s auditors, Andersen, considered Enron a difficult and demanding client At Andersen doubts about some of the accounting policies were expressed
40 Enron No risk analysis, over optimism and group think
41 The Anthrax Clean-up at the State Department
42 State Annex 32, Sterling Virginia 1. A sorting, collection and distribution point for U.S. mail and parcels sent to and from embassies abroad 2. The Daschel letter came through this distribution center and contaminated Annex 32
43 Some History October 2001 Anthrax is received Several people were killed within days Many lay ill Many were required to take a very potent antibiotic, CIPRO State Department Priorities Safety Clean-up Repair damage
44 Scope of the Project 70,000 square foot warehouse Flat sorters, Parcel sorters Rolling stock, Cabinets Large quantities of electronic equipment 80 employees
45 Decontamination and Rehabilitation Project Project Manager: Tom Sgroi Close and contain the entire facility immediately Project team Large Cross functional (public health, EPA, CDC, U.S. Army, OSHA, Loudoun Fire and Rescue, Loudoun County Board of Supervisors Communication Methods Frequent Town Hall meetings Frequent reports to the Loudoun County Board of Supervisors
46 Risk Identification 1. Waste disposal 2. Fumigation 3. Air quality 4. Environmental sampling 5. Emergency preparedness 6. Equipment disposal 7. Salvage 8. Communication 9. Conflicts of Interest
47 Avoiding Conflicts of Interest An Environmental Clearance Committee (ECC) comprised of public health experts was to review the whole process and decide on suitability of re- occupancy of the building EEC members were not involved in the planning and decision making efforts of the clean-up
48 Sgroi Decided to Removed the Entire Contents of the Building? 400 tons of materials, supplies and machinery All contents were removed then incinerated, steam sterilized or cleaned with ethylene oxide Total removal resulted in more costs than just clean-up and partial removal
49 Risk Management What was the risk Sgroi had identified that resulted in the total and more costly removal of building contents? What were the impacts of the identified risk? Who would ultimately pay if Sgroi had underestimated the risk probability or the impact? Did the probability really matter?
50 Zero Tolerance Health and safety were the highest goals of the project.
51 Lessons Learned from the Anthrax Clean-up Incorporate mail screening and containment with engineering controls such as ventilation and exhaust systems Provide improved protection for mail handling employees Having the case file with agency names and responsibilities will facilitate any future clean-up efforts
52 What Have We Learned Identify risks and impacts – Ask yourself, “Who pays?” Don’t be afraid to incur higher costs if the impact is too high for choosing a less costly alternative. Assess risks and reassess risks. Save your project notes for Lessons Learned.
53 Examine various scenarios when performing risk identification. Before assigning the probabilities evaluate the impact. If you can not live with the impact of a risk (the worst case scenario) then you can not take the risk regardless of the probability of occurrence.
54 Thank you for your attention. Please contact Dr. Dufner if you have questions or comments. firstname.lastname@example.org or email@example.com firstname.lastname@example.org email@example.com