Project and Risk Management Techniques in NPD

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What is Project Management?

“Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations.”

Today, Modern Project Management has emerged as a premier solution in business operations. Large and small organizations recognize that a structured approach to planning and controlling projects is a necessary core competency for success.

International organizations such as the Project Management Institute(PMI) and the International Project Management Association (IPMA) promote project management by providing professional development .

Project Management Today

Has a goal/meets a need Is a set of related activities that are

nonrecurring Has a definite beginning and end Has clearly defined goals and deliverables Consumes resources Needs to be managed

Project Characteristics

Project Manager

“The person who is responsible for theproject and will be held accountable for its success or failure.”

Balancing the “ProjectSuccess Triangle”

A clear understanding of

customer priorities “People” skills Thorough planning An organized, structured process

The purpose of work breakdown structure (WBS) is to help plan effectively for a project by breaking key tasks or activities down in to more manageable and smaller units of work.

WBS produces a detailed list of tasks to be performed for a project, helping to deliver better costing, scheduling and resource planning for a project.

Cost breakdown structure (CBS) lists every item classified and its expenditure for the project in order to get a more detailed estimate of cost or expenditure.

Work Breakdown Structure(WBS)

Work Breakdown Structure(WBS)

This is one of the best tools the project manager can use to determine whether he or she is on track in terms of the project progress.The project manager does not have to use expensive software to track this. The project manager can use a simple Excel template to do this job.

The milestone checklist should be a live document that should be updated once or twice a week.

Milestone Checklist

Examle of Milestone Checklist

With the introduction of computer technology, there have been a number of software tools specifically developed for project management purpose. MS Project is one such tool that has won the hearts of project managers all over the world.

MS Project can be used as a standalone tool for tracking project progress or it can be used for tracking complex projects distributed in many geographical areas and managed by a number of project managers.

There are many other software packages for project management in addition to MS Project. Most of these new additions are online portals for project management activities where the project members have access to project details and progress from anywhere.

Project Management Softwares

A time chart devised by Henry Gantt in 1917, an American engineer. A Gantt chart is a horizontal bar chart used for project scheduling. Each activity or task is depicted as a block over time, actual performance is recorded in real time and compared to planned deadlines necessary for achieving completion.

Gantt Charts

There are many other software packages for project management in addition to MS Project. Most of these new additions are online portals for project management activities where the project members have access to project details and progress from anywhere.

Visual of Gantt Chart

Can be used to plan time scale for a project Can be used to estimate resources required Graphical illustration of a schedule of tasks to

complete e.g. ideal wall chart for the office and easy to visualise and interpret at meetings

Helps to plan, coordinate, and track specific tasks for a project

Good for small projects when the number of tasks or activities are small and not complex e.g. good for simple projects.

The Use of Gantt Charts as a Tool

Gantt charts are a poor time management tools when projects are lengthy and complex. There often exists in large projects a high interdependency between various tasks e.g. some activities cannot start, until others have been completed first, therefore many activities are interrelated. Gantt charts in these circumstances are less desirable because they do not display or indicate interdependencies. Network (or critical path) analysis can display more logically the sequence and timing of each activity, they communicate interdependency and a more effective time management tool for large and complex projects.

Critical Path Analysis (CPA) or Network Analysis

Path with least slack Path with longest duration Critical Path Method (CPM) is a project management technique that analyzes what activities have the least amount of scheduling flexibility (i.e., are the most mission-critical) and then predicts project duration schedule based on the activities that fall along the “critical path.” Activities that lie along the critical path cannot be

delayed without delaying the finish time for the entire project.

What’s is the Critical Path?

Advantages of critical path analysis (CPA) Identifies interrelationships between different tasks or

activities Resources can be planned and allocated from using it e.g.

staff planning Good communication and planning tool for time management

Disadvantages of critical path analysis (CPA)

Assumes a trade off between time and money but most staff cost could be a

fixed not variable cost The complexity of the diagram will increase as more activities

are included Key uncertainties often exist when estimating the duration

for activities, therefore can be a poor prediction for elapsed time

The technique of PERT helps give better time estimation for a project, by accounting for the uncertainty when predicting task durations.

As an illustration, the project manager could estimate the worse, best and most probable duration of time for each activity and then determine an ‘average’ completion time.

This can be undertaken by assigning probabilities to the three estimates and calculating an ‘expected value’.

The average time of each activity would then be used to configure the elapsed time of the project.

PERT (Project Evaluation and Review Techniques)

A Responsibility Assignment Matrix (RAM) uses the Work Breakdown Structure (WBS) and the organizational structure to link deliverables and/or activities to resources. The RAM provides a realistic picture of the resources needed and can identify if you have enough resources for the project. Additionally, it clearly shows who is responsible for what; if it is associated with the schedule it can identify when the deliverable is needed. By creating a RAM; deliverables are assigned a responsible party, who will review or add input and the appropriate approval authority is identified.

The RAM can be as simple as placing a check mark in a matrix to assign the deliverables or activities.

Ensure that all tasks are assigned to people Show levels of involvement of people to work

Responsibility AssignmentMatrix (RAM) — Purpose

RACI CODING SYSTEM

Arrow Diagram Method(Activity on arc)

Precedence Diagram Method(Activity on node)

Network Diagram Methods

A project manager cannot execute his/her job without a proper set of tools. These tools do not have to be renowned software or something, but it can pretty well be simple and proven techniques to manage project work.

Having a solid set of project management tools always makes project managers' work pleasurable and productive.

Conclusion

What is Risk?

With the probability of occurrence of a hazard, if you happen to be addressing with the severity of the outcome will lead to. The risk must be expressed as a function of the severity of the possibility of danger.

Risk management is the identification, assessment, and prioritization of risk followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.

Risk Management

If you don’t actively attack risks, they will actively attack you.

— Tom Gilb

Project risks budget, schedule, resources, size, personnel, morale ...

Technical risks implementation technology, verification, maintenance ...

Business risks market, sales, management, commitment ...

Risk Management

Hazard and Risk Perception

Risk is the amount of the possible loss

Risk is a function and expressed multiplied by a of the level of loss and probability

Losing of part of or all of personal assets against the a particular hazard is risk

The Process Of Risk Management

Definition of risk

Risk analysis

List of potential

risks

Risk planning

risk oversight

Risks are ranked

according to priorities

risks in the

removal of the break

Risk estimation

Human in Risk Management

Four Techniques of Risk Management

Comprehensive business risk management is a multi-stage process that will vary depending on the needs and requirements of each individual enterprise.

The first stage is to determine exactly what the risks facing your business are, in order to assess the likely and potential impact of each incident occurring.

Once this process has been completed, you can get down to evaluating the technique which will best suit your business and maximize your risk management moving forward.

Here are the four key potential risk treatments to consider.

Avoidance

Obviously one of the easiest ways to mitigate risk is to put a stop to any activities that might put your business in jeopardy.

However it's important to remember that with nothing ventured comes nothing gained, and therefore this is often not a realistic option for many business.

ReductionThe second risk management technique is reduction - essentially, taking the steps required to minimize the potential that an incident will occur.

Risk reduction strategies need to be weighed up in terms of their potential return on investment. If the cost of risk reduction outweighs the potential cost of an incident occurring, you will need to decide whether it is really worthwhile.

Transfer

One of the best methods of risk management is transferring that risk to another party. An example of this would be purchasing comprehensive business insurance.

Risk transfer is a realistic approach to risk management as it accepts that sometimes incidents do occur, yet ensures that your business will be prepared to cope with the impact of that even

Acceptance

Finally, risk acceptance involves 'taking it on the chin', so to speak, and weathering the impact of an event. This option is often chosen by those who consider the cost of risk transfer or reduction to be excessive or unnecessary.

Risk acceptance is a dangerous strategy as your business runs the risk of underestimating potential losses, and therefore will be particularly vulnerable in the event that an incident occurs.

Risk identification is the process of understanding what potential events might hurt or enhance a particular project.

Risk identification tools and techniques include:

Brainstorming

The Delphi Technique

Interviewing

SWOT analysis

Risk Identification

46INSE 6230

Sample Risk Register

No. Rank Risk Description Category RootCause

Triggers PotentialResponses

RiskOwner

Probability Impact Status

R44 1

R21 2

R7 3

Risk Prioritized

Example of Top Ten Risk Item Tracking

Monthly Ranking

Risk Item This

Month

Last

Month

Numberof Months

Risk ResolutionProgress

Inadequateplanning

1 2 4 Working on revising theentire project plan

Poor definitionof scope

2 3 3 Holding meetings withproject customer andsponsor to clarify scope

Absence ofleadership

3 1 2 Just assigned a newproject manager to leadthe project after old onequit

Poor costestimates

4 4 3 Revising cost estimates

Poor timeestimates

5 5 3 Revising scheduleestimates

Risk Groups

Cause and Effect DiagramsAlso known as Ishikawa or fishbone

Diagramming Techniques

Product Delivered Late

Bad Specs

Insufficient Resources

Inadequate Time

Project Prioritization

Testing

Materials

Potential Causes Effect

Personnel

Quantitative Risk Analysis Decision Trees and Expected Monetary Value (EMV)

Sample Monte Carlo Simulation Results for Project Schedule

Sample Sensitivity Analysis for Determining Break-Even Point

COSO ERM-CUBE

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