1. IS 425 Enterprise Information I LECTURE 9 Autumn 2004-2005  2004 Norma Sutcliffe

2. IS425 Autumn 2004-2005 Norma Sutcliffe Session 92 Sourcing Decisions & Risk Management Exercise Quiz Lecture

3. IS425 Autumn 2004-2005 Norma Sutcliffe Session 93 Exercise Each team is given Leadership Effectiveness tasks For each task: Give one example of the wording of the task in: Directive Style and who is the appropriate audience Interactive Style and who is the appropriate audience Nondirective Style and who is the appropriate audience

4. IS425 Autumn 2004-2005 Norma Sutcliffe Session 94 Quiz DL students have homework assignment on COL

5. IS425 Autumn 2004-2005 Norma Sutcliffe Session 95 Risk Management Definition The process in which potential risks to a business are identified, analyzed and mitigated, along with the process of balancing the cost of protecting the company against a risk vs. the cost of exposure to that risk. Or, "What imperils getting benefits from effort?"

6. IS425 Autumn 2004-2005 Norma Sutcliffe Session 96 General Categories of Risks: Economic Risks Technical Risks Organizational Risks Legal Risks Terrorist Risks

7. IS425 Autumn 2004-2005 Norma Sutcliffe Session 97 General Categories of Risks: Economic Risks applies to risks that can potentially impact the business. These risks could result to failure or loss of business. business environment changes vendor survival

8. IS425 Autumn 2004-2005 Norma Sutcliffe Session 98 General Categories of Risks: Technical Risks applies to the risks that can impact the development, implementation, and the operation of a system. Sources of these risks can come from the project team’s degree of familiarity with the technology, familiarity with the application, security and project size. integrating technology with existing portfolio poor training poor monitor/control

9. IS425 Autumn 2004-2005 Norma Sutcliffe Session 99 General Categories of Risks: Organizational Risks applies to the risks that could potentially impact the acceptance of the project. Problems arise when there is potential reduction of manpower, changing the way business process is performed, and when there is increase of workload. Consequences to these risks are defined below: resistance to the system low morale of personnel lack of political support possible rejection of the system poor procedures lack of trained support lack of trainers ineffective use by users poor help desk

10. IS425 Autumn 2004-2005 Norma Sutcliffe Session 910 General Categories of Risks: Legal Risks applies to risks arising from potential lawsuits and liabilities associated with the implementation of a project. fiduciary responsibility of managers laws and regulations inappropriately administered personal financial and criminal liability (from shareholder lawsuits and FCPA)

11. IS425 Autumn 2004-2005 Norma Sutcliffe Session 911 General Categories of Risks: Terrorist Risks applies to risks arising from intentional destruction or malevolent modification of the physical equipment data and information files communication links software

12. IS425 Autumn 2004-2005 Norma Sutcliffe Session 912 Sources of Project Risks Project Work Project Team and Leader Management Business Situation Other Projects External Factors Technology Vendors and Contractors Business Processes Business Units Customers and Suppliers

13. IS425 Autumn 2004-2005 Norma Sutcliffe Session 913 Sources of Project Risks Project Work – quality and completeness of the work Project Team and Leader – personality issues allocation of resources trust issues Management – poor or no decision making lack of attention Business Situation -- assumptions change -- conditions change

14. IS425 Autumn 2004-2005 Norma Sutcliffe Session 914 Sources of Project Risks Other Projects -- Changes in priorities External Factors -- regulatory changes, -- union pressures, -- consumer groups -- various special interest groups Technology -- changes that can make project irrelevant

15. IS425 Autumn 2004-2005 Norma Sutcliffe Session 915 Sources of Project Risks Vendors and Contractors -- reliability -- quality -- sustainability Business Processes -- reengineering changes power bases Business Units -- management changes -- organization changes -- staffing changing Customers and Suppliers -- changes in mix

16. IS425 Autumn 2004-2005 Norma Sutcliffe Session 916 Keeping Track of Risks ProjectsEconomicTechnicalOrganizational Keep a count of the OPEN RISKS by type for each project – Update regularly Keep track of your progress in mitigating / resolving risks REMEMBER – MANY RISKS WILL COME TOWARDS THE END OF THE PROJECT – SO THINK / PLAN AHEAD

17. IS425 Autumn 2004-2005 Norma Sutcliffe Session 917 Constraints on Taking Actions Before taking actions to resolve/mitigate risks keep in mind— Symptoms seen as Problems symptoms can be treated leaving the underlying problem unresolved & growing Seen as panicking If you constantly bring the risks to management’s attention – may be seen as crying wolf Look before you leap – get enough facts first

18. IS425 Autumn 2004-2005 Norma Sutcliffe Session 918 Risk Strategies Deal only with critical factors – need to monitor all problems and catch those before they balloon React quickly to issues – need to know enough about what causes issues Proactive but still conservative – use a method that will help you know you have enough to act and then act

19. IS425 Autumn 2004-2005 Norma Sutcliffe Session 919 Preferred Project Risk Strategy Method Group issues by Impact if not solved Time pressure to do something Use your judgment and experience on positioning issues

20. IS425 Autumn 2004-2005 Norma Sutcliffe Session 920 Issues to be Addressed Issues 23 and 27 must be addressed Issue 10 has time pressure so investigate

21. IS425 Autumn 2004-2005 Norma Sutcliffe Session 921 Time Marches on Some issues go away Some issues emerge Some get more troublesome

22. IS425 Autumn 2004-2005 Norma Sutcliffe Session 922 Risk Issue Management Process 1. Create project risk issue database 200+ commonly known problems 2. Identify 20-30 most likely based on experience 3. Present potential issues to management with project proposal 4. In estimating project tasks – more issues may emerge 5. All issues relate to tasks – if not find the missing tasks

23. IS425 Autumn 2004-2005 Norma Sutcliffe Session 923 Risk Issue Management Process 6. Phase beginning -- team meetings on near term issues -- discuss impact of issues -- track the issues -- develop issues resolution table -- use 1-page project summary to Mgt. 7. Create table of issues versus projects Create GANTT chart (major tasks / issues) -- follow-up on resolved issues (no reappearance) -- implement actions when known or appropriate 8. When resolved -- celebrate

24. IS425 Autumn 2004-2005 Norma Sutcliffe Session 924 Management Communications Focus on informal communications with management on risk issues Focus on getting management slowly on board with knowledge of problem growing Then on presenting alternatives Then on getting approval for actions

25. IS425 Autumn 2004-2005 Norma Sutcliffe Session 925 Project Risk Portfolio Approach Same issues database for all major projects Common issues reporting method Periodically prepare new table of issues versus projects Support / facilitate Meetings Analysis on issues When issue resolved -- take the decisions, then -- identify action items for each impacted project -- follow up on action items across project -- report to management

26. IS425 Autumn 2004-2005 Norma Sutcliffe Session 926 AFTER PROJECT DEPLOYMENT RISKS CONTINUE and MUST BE HANDLED

27. IS425 Autumn 2004-2005 Norma Sutcliffe Session 927 OTHER RISK APPROACHES For IT investments – not project management Portfolio approach – manage risks by treating IT resources such as hardware, software, services and personnel as collection of investments. Decisions are made based from the potential return of investment or payoff against the level of risks. Interdisciplinary Approach – applies an integrated assessment of the risks from various groups in a company to determine and assess all dimensions of risks.

28. IS425 Autumn 2004-2005 Norma Sutcliffe Session 928 NEXT WEEK REVIEW DEBATE WORKSHOP