Presentation on theme: "DPA PFG “Professional Services That Count” 9-May-15 E File Reference PFG PPT TEMPLATE 1 UNCLASSIFIED Space Projects Risk Management is the Key to Success."— Presentation transcript:
DPA PFG “Professional Services That Count” 9-May-15 E File Reference PFG PPT TEMPLATE 1 UNCLASSIFIED Space Projects Risk Management is the Key to Success Presented to the
DPA 9-May-15 2 UNCLASSIFIED 2 AIMS To create an awareness of some of the techniques that can be employed to complete a successful Project Risk Analysis
DPA 9-May-15 3 UNCLASSIFIED 3 Today’s Agenda Background to the Problem A Process to address the Problem An Example of a Project Risk Network Summary and Questions
DPA 9-May-15 4 UNCLASSIFIED PROJECT SUCCESS = on time, on cost, to spec
DPA 9-May-15 5 UNCLASSIFIED 5 BACKGROUND NAO audits MoD’s Major Projects Yearly monitor of Costs and TimescalesTimescales Benefits of SMART Acquisition Moving towards a more informed forecastforecast
DPA 9-May-15 6 UNCLASSIFIED 6 Defence Journal of the DPA - 2003
DPA 9-May-15 7 UNCLASSIFIED 7 Risk Maturity Assessment WHAT IS A RISK MATURITY ASSESSMENT? to independently assess maturity of the risk management process to produce prioritised action plans for improvement Initial Process
DPA 9-May-15 9 UNCLASSIFIED 9 MoD’s Risk Management Process
DPA 9-May-15 10 UNCLASSIFIED 10 Identify Use prompts, list and characterise elements Include risk source, event consequences & context of the risk Opportunities may also be revealed Think out of the box Engage all stakeholders - IMPORTANT
DPA 9-May-15 12 UNCLASSIFIED 12 Analyse Two stage assessment process Qualitative against agreed criteria Probability of risk occurring Impact on time, cost and performance Display as a PIGPIG Ownership of risk Where and when it could occur Quantitative
DPA 9-May-15 13 UNCLASSIFIED 13 Quantitative stage Define the measure of PROBABILITY e.g. High >50%, Medium 20%- 50%, Low <20% Define IMPACT on COST e.g. High >30%, Medium 10 - 30%, Low <10% or High >£250k, Medium £50k- £250k, Low <£50K Define IMPACT on TIME e.g. High >30%, Medium 10 - 30%, Low <10% or High >6 months, Med 3m - 6 m, Low <3m
DPA 9-May-15 14 UNCLASSIFIED 14 Risk Register Serial No. Risk Title Activities Affected Probability Impact Perf. Cost Sched. Risk Reduction Ownership Risk Questionnaire Level 1 Sample summary Sheet
DPA 9-May-15 16 UNCLASSIFIED 16 Plan Classify Tolerate - No action but reassess Reject - i.e. not valid at this stage Handle - require action Risk Handling Mitigation Strategies - risk reduction Fallback Plans - an alternative
DPA 9-May-15 17 UNCLASSIFIED 17 Risk Handling Mitigation Strategies Terminate Terminate Treat Treat Transfer Transfer Tolerate Tolerate Fallback or Contingency Plans an alternative taken up if a risk occurs trigger point set to allow sufficient time to be effective
DPA 9-May-15 19 UNCLASSIFIED 19 Proactive/Reactive Implement by the Risk Manager, Stakeholders, using the Risk Plan Risk Plan Monitor Maintain Risk Records/Register, easy access Review Use results of Qualitative/Quantitative analysis Report Relevant & Concise analysed data
DPA 9-May-15 20 UNCLASSIFIED 20 Managing a Project Why Plan? What do we need to know about the schedule? Duration of the project Milestones Chances of achieving target? By how much? What part of project needs special attention?
DPA 9-May-15 21 UNCLASSIFIED 21 Point Estimates Conventional single point estimate 095 Time
DPA 9-May-15 22 UNCLASSIFIED 22 Dur 95 22 5 40 20 25 18 20 10 5 35 10 5 3 MayJunJulAugSep Element Description Project Total Design Design Approval Purchase L/ L Items Produce Drags Purchase Raw Matls Make Piece parts Purchase B/O Items Purchase Sub-Con Inspect Sub-Con Prepare Tech Docs Typeset, print & bind Assemble Test Pack & Despatch Sample Network
DPA 9-May-15 23 UNCLASSIFIED 23 Reality ! 095 Could be as low as this Could be as high as this 90105 Time
DPA 9-May-15 24 UNCLASSIFIED 24 Cycling to Work Uncertainty: Most likely - 30 mins Minimum - 20 mins Maximum - 50 mins 203050 Time Risks: Puncture? 3PE & Prob Accident? 3PE & Prob Time 203565 Risks
DPA 9-May-15 25 UNCLASSIFIED 25 Combining Risk with Uncertainty Achieved via Monte Carlo Simulation Works by simulating the project many times using the estimated distributions and plotting the outcomes Can be used for time or cost Achieved using a Computer Based Tool such as Predict, @Risk, Crystal Ball, ARM
DPA 9-May-15 26 UNCLASSIFIED 26 The Estimate Process Risk Register 3 Point Estimates Cost 10%-50%-90% Confidence levels Schedule 10%-50%-90% Confidence levels Schedule 3 Point Estimates * Modelling Cost 3 Point Estimates
DPA 9-May-15 27 UNCLASSIFIED 27 3 Point Estimates
DPA 9-May-15 28 UNCLASSIFIED 28 Roll the dice !!
DPA 9-May-15 29 UNCLASSIFIED 29 Monte Carlo Simulation Combined distribution =
DPA 9-May-15 30 UNCLASSIFIED 30 Probability of outcomes Probability % Time 0 100 20 40 60 80 959085100 Days 95 Days 42%
DPA 9-May-15 32 UNCLASSIFIED 32 Understanding the results l ‘No problem’ targets are likely to be inefficient and contain contingency l Targets within the range of possible outcomes are likely to be achievable and efficient l ‘Serious Problem’ targets are likely to be unachievable.
DPA 9-May-15 35 UNCLASSIFIED 35 Criticality Index
DPA 9-May-15 36 UNCLASSIFIED 36 Schedule Summary l Prioritise Risks High Medium Low HighMediumLow l Quantify Risks l Understand Results l Identify Risks
DPA 9-May-15 37 UNCLASSIFIED 37 Summary 1 Risk Identification Break down the task, identify the risks and their responses Analysis Model the individual elements and combine them to form an overall result Planning Plan for corrective actions, risk reduction options and fall-back plan Management Carry out and monitor the plans
DPA 9-May-15 38 UNCLASSIFIED 38 Summary 2 GIGO Stakeholder involvement Take it seriously Mandated Process in MoD
DPA 9-May-15 39 UNCLASSIFIED n PFG Risk-1 (Dave Burgin) n PFG Risk-8 (Paul Woodward) Mail Point # 2104 LARCH level 1a MoD Abbey Wood, Bristol n Tel No 0117-91-34382 n FAX 0117-91-33970 n E-mail - PFG-Risk-Analysis-Team@dpa.mod.uk – More information ?? – DAWN Knowledge Base – PFG WEB Site ANY QUESTIONS ? PFG “Professional Services that Count”
DPA 9-May-15 40 UNCLASSIFIED 40 Risk Plan Typical contents Purpose, Roles, Methodology, Tools, Techniques, Reviews, Definitions, Reporting by applying the principles of Who, What, When, Why, Where and How to each topic
DPA 9-May-15 41 UNCLASSIFIED 41 LowMediumHigh 0 3 Low Medium Probability Impact 3 P I Grid Risk 3 & 5 Risk 2 Risks 1 & 4
DPA 9-May-15 42 UNCLASSIFIED 42 Quantitative Risk One Two Three Four Five 3 Pt Est Min ML Max 5 710 101217 1 2 5 81018 1 412 Distributions Project Range
DPA 9-May-15 43 UNCLASSIFIED 43 Terminate Take action to avoid the risk occurring
DPA 9-May-15 44 UNCLASSIFIED 44 Treat Take action to REDUCE the risk’s impact
DPA 9-May-15 45 UNCLASSIFIED 45 Transfer Is another stakeholder better placed to manage the risk?
DPA 9-May-15 46 UNCLASSIFIED 46 Tolerate Can the Project accept the consequences of a risk?