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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.

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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:

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2 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

3 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

4 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

5 DPA 9-May-15 4 UNCLASSIFIED PROJECT SUCCESS = on time, on cost, to spec

6 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

7 DPA 9-May-15 6 UNCLASSIFIED 6 Defence Journal of the DPA

8 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

9 DPA 9-May-15 8 UNCLASSIFIED 8

10 DPA 9-May-15 9 UNCLASSIFIED 9 MoD’s Risk Management Process

11 DPA 9-May 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

12 DPA 9-May UNCLASSIFIED 11 Analyse

13 DPA 9-May 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

14 DPA 9-May 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 %, Low <10% or  High >£250k, Medium £50k- £250k, Low <£50K  Define IMPACT on TIME e.g.  High >30%, Medium %, Low <10% or  High >6 months, Med 3m - 6 m, Low <3m

15 DPA 9-May 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

16 DPA 9-May UNCLASSIFIED 15 Plan

17 DPA 9-May 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

18 DPA 9-May 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

19 DPA 9-May UNCLASSIFIED 18 Manage

20 DPA 9-May 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

21 DPA 9-May 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?

22 DPA 9-May UNCLASSIFIED 21 Point Estimates Conventional single point estimate 095 Time

23 DPA 9-May UNCLASSIFIED 22 Dur 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

24 DPA 9-May UNCLASSIFIED 23 Reality ! 095 Could be as low as this Could be as high as this Time

25 DPA 9-May UNCLASSIFIED 24 Cycling to Work Uncertainty: Most likely - 30 mins Minimum - 20 mins Maximum - 50 mins Time Risks: Puncture? 3PE & Prob Accident? 3PE & Prob Time Risks

26 DPA 9-May 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 Crystal Ball, ARM

27 DPA 9-May 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

28 DPA 9-May UNCLASSIFIED 27 3 Point Estimates

29 DPA 9-May UNCLASSIFIED 28 Roll the dice !!

30 DPA 9-May UNCLASSIFIED 29 Monte Carlo Simulation Combined distribution =

31 DPA 9-May UNCLASSIFIED 30 Probability of outcomes Probability % Time Days 95 Days 42%

32 DPA 9-May UNCLASSIFIED 31 Target Outcome % Confidence Range of Project Outcomes Target here? No Problems Expected 100% 0% Target here? Serious Problems Expected Target here? Manageable Problems Expected

33 DPA 9-May 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.

34 DPA 9-May UNCLASSIFIED 33 Criticality - Single Point START FINISH Critical Path

35 DPA 9-May UNCLASSIFIED 34 Criticality - 3 point START FINISH Critical Path

36 DPA 9-May UNCLASSIFIED 35 Criticality Index

37 DPA 9-May UNCLASSIFIED 36 Schedule Summary l Prioritise Risks High Medium Low HighMediumLow l Quantify Risks l Understand Results l Identify Risks

38 DPA 9-May 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

39 DPA 9-May UNCLASSIFIED 38 Summary 2  GIGO  Stakeholder involvement  Take it seriously  Mandated Process in MoD

40 DPA 9-May 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 n FAX n - – More information ?? – DAWN Knowledge Base – PFG WEB Site ANY QUESTIONS ? PFG “Professional Services that Count”

41 DPA 9-May 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

42 DPA 9-May UNCLASSIFIED 41 LowMediumHigh 0 3 Low Medium Probability Impact 3 P I Grid Risk 3 & 5 Risk 2 Risks 1 & 4

43 DPA 9-May UNCLASSIFIED 42 Quantitative Risk One Two Three Four Five 3 Pt Est Min ML Max Distributions Project Range

44 DPA 9-May UNCLASSIFIED 43 Terminate Take action to avoid the risk occurring

45 DPA 9-May UNCLASSIFIED 44 Treat Take action to REDUCE the risk’s impact

46 DPA 9-May UNCLASSIFIED 45 Transfer Is another stakeholder better placed to manage the risk?

47 DPA 9-May UNCLASSIFIED 46 Tolerate Can the Project accept the consequences of a risk?

48 DPA 9-May UNCLASSIFIED 47 Legacy Projects

49 DPA 9-May UNCLASSIFIED 48 Smart Projects


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