BUS 528 – PM / Chapter 5 & 6

Chapter 5 – Risk Management

1. RISK is “The chance of something happening that will have an impact upon objectives”.  Risk might be any of uncertain or unexpected items which impact the goal achievement in organization, including strategies, procedures, finance or others of the project. Risk management helps us to minimize the threats to our project, it means the more disciplined the approach, the more we are able to control and reduce the risks. Implement a risk management framework – identify risks -> analyze and prioritize -> develop a response ->establish reserved -> continuous risk management, the process can be repeated throughout the project.

2. I think risk management is considered not only about risk analysis, but also contingency plan and crisis management. Risk is uncertainty existing everywhere; it sometimes even is difficult to be estimated.

Risk Analysis - Risk assessment and risk perception analysis are interrelated components of risk analysis. Risk assessment helps us to estimate the chances of a specific cases occurring and/or their potential consequences. Risk perception is mostly concerned about people’s emotional factors and behavior. It can be knowledge recognition or communication issue.

Contingency Plan – It’s about a plan for back up procedures, emergency response and post disaster recovery. It can be a kind of insurance or like insurance policies that we use as a monitor strategy of being ready to take actions.

Crisis Management – Dealing with risk. A crisis is defined as an event caused by a risk.  Crisis management is a process that we can use to respond an event if our operations, staff, reputation, customers, the legal finance of an organization are threatened by that event. The purpose of crisis management is to minimize the damage.

3. Project manager’s integrated risk management features enable the project team to identify, quantify and mitigate risk such as weather delays, late materials or sophisticated installations. Risks can be categorized and control plans can be documented as part of the overall project plan. Project manager also helps team prepare for the unexpected through the “what if?” project and resources simulation engine to determine the schedule and cost exposure of project risks. Equipped with this information, project manager can flag potential risks and take the necessary steps to plan an appropriate response strategy in advance.

Chapter 6 – Work Breakdown Structure (WBS)

1. Work Breakdown Structure (WBS) is an effective plan (as a strategy) to partition the project into manageable pieces that helps project team members to control and estimate sub-works individually. Mostly WBS is a graphical tool (a tree structure) with which the project’s statement of work is on an easiest stage to be understood and communicated. The key to success is break the project into small, meaningful, manageable pieces of work.

2. Each sub-work, as known as “work package”, still should be considered of –

why  (with case function)

what  (with work/service scope and quality output)

how  (with strategy and communications)

who  (with resources)

how much (with budget and cost phasing)

 when  (with schedule)

risks  (with solutions of how they will be managed)

 

3. A successful WBS improves the accuracy of cost estimates due to the major project deliverables into smaller parts. WBS helps project manager to catch up the project progress closely to make sure the final performance achieving the project goal without delay under the budget.

 

4. In general, WBS method builds up a multi-level decomposition of the project effort. The top level refers to the entire project, and then break project into it subprojects and deliverables. To ensure each work packages are manageable with the correct size, we should follow some common rules of thumb:

- The 8/80 rule No single activity or group of activities to produce a single deliverable should be smaller than 8 labor hours or more than 80 hours of effort.

- The reporting period rule No single work or series of activities should be longer than a single reporting period. This means if the project team is reporting progress monthly, than no task should be longer than one month long.

- The “If it’s useful” rule is considered the task working “make common sense” with which all the subprojects or subcontract can be easier to estimate, easier to assign and easier to track.