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1: Risk Identification
The risk management process begins by trying to generate a list of all the
possible risks that could affect the project. Typically the project manager
pulls together, during the planning phase, a risk management team
consisting of core team members and other relevant stakeholders. The
team uses brainstorming and other problem identifying techniques to
identify potential problems. Participants are encouraged to keep an open
mind and generate as many probable risks as possible. More than one
project has been bushwhacked by an event that members thought was
preposterous in the beginning. Later during the assessment phase, participants will have a chance to analyze and filter out unreasonable risks.
One common mistake that is made early in the risk identification process
is to focus on objectives and not on the events that could produce
consequences. For example, team members may identify failing to meet
schedule as a major risk. What they need to focus on are the events that
could cause this to happen (i.e., poor estimates, adverse weather, shipping
delays, etc.). Only by focusing on actual events can potential solutions be
found.
After the macro risks have been identified, specific areas can be checked.
An effective tool for identifying specific risks is the work breakdown
structure. Use of the WBS reduces the chance a risk event will be missed.
On large project multiple risk teams are organized around specific
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Mitigating Risk
Reducing risk is usually the first alternative considered. There are
basically two strategies for mitigating risk:
(1) reduce the likelihood that the event will occur and/or (2) reduce the
impact that the adverse event would have on the project. Most risk teams
focus first on reducing the likelihood of risk events since, if successful, this
may eliminate the need to consider the potentially costly second strategy.
Avoiding Risk
Risk avoidance is changing the project plan to eliminate the risk or
condition. Although it is impossible to eliminate all risk events, some
specific risks may be avoided before you launch the project. For example,
adopting proven technology instead of experimental technology can
eliminate technical failure. Choosing an Australian supplier as opposed to
an Indonesian supplier would virtually eliminate the chance that political
unrest would disrupt the supply of critical materials.
Step 4: Risk Response Control
'
The last step in the risk management process is risk controlexecuting
the risk response strategy, monitoring triggering events, initiating
contingency plans, and watching for new risks. Establishing a change
management system to deal with events that require formal changes in the
scope, budget, and/or schedule of the project is an essential element of
risk control.
Project managers need to monitor risks just like they track
project*progress. Risk assessment and updating needs to be part of every
status meeting and progress report system. The project team needs to be
on constant alert for new, unforeseen risks. Management needs to be
sensitive that others may not be forthright in acknowledging new risks and
problems. Admitting that there might be a bug in the design code or tha*
different components are not compatible reflects poorly on individual
performance. If the prevailing organizational culture is one where mistakes
are punished severely, then it is only human nature to protect oneself.
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original two-person team. Not only is more time needed to coordinate and
manage a larger team; there is the additional delay of training the new
people and getting them up to speed on the project. The end result is
captured in Brooks law: Adding manpower to a late software project makes
it later.
Outsourcing Project Work
A common method for shortening the project time is to subcontract an
activity. The subcontractor may have access to superior technology or
expertise that will accelerate the completion of the activity. For example,
contracting for a backhoe can accomplish in two hours what it can take a
team of laborers two days to do. Likewise, by hiring a consulting firm that
specializes in ADSI programming, a firm may be able to cut in half the time
it would take for less experienced, internal programmers to do the work.
Subcontracting also frees up resources that can be assigned to a critical
activity and will ideally result in a shorter project duration.
Scheduling Overtime
The easiest way to add more labor to a project is not to add more people,
but to schedule overtime. If a team works 50 hours a week instead of 40, it
might accomplish 25 percent more. By scheduling overtime you avoid the
additional costs of coordination and communication encountered when new
people are added. If people involved are salaried workers, there may be no
real additional cost for the extra work. Another advantage is that there are
fewer distractions when people work outside normal hours.
Overtime has disadvantages. First, hourly workers are typically paid time
and a half for overtime and double time for weekends and holidays.
Sustained overtime work by salaried employees may incur intangible costs
such as divorce, burnout, and turnover. The latter is a key organizational
concern when there is a shortage of workers. Furthermore, it is an
oversimplification to assume that, over an extended period of time, a person
is as productive during his or her eleventh hour at work as during his or
her third hour of work. There are natural limits to what is humanly
possible, and extended overtime may actually lead to an overall decline in
productivity when fatigue sets in.
Overtime and working longer hours is the preferred choice for accelerating
project completion, especially when the project team is salaried. The key is
to use overtime judiciously. Remember a project is a marathon not a sprint!
You do not want to run out of energy before the finish line.
Establish a Core Project Team
One of the advantages of creating a dedicated core team to complete a
project is speed. Assigning professionals full time to a project avoids the
hidden cost of multitasking in which people are forced to juggle the
demands of multiple projects. Professionals are allowed to devotejheir
undivided attention to a specific_project. This singular focus creates a
shared goal that can bind a diverse set of profes- sionals to a highly
cohesive team capable of accelerating project completion. Do It TwiceFast
and Correctly
If you are in a hurry, try building a quick and dirty short-term solution,
then go back and do it the right way. For example, the Rose Garden
stadium in Portland, Oregon, was supposed to be completely finished in
time for the start of the 1995-1996 National Basketball Association (NBA)
season. Delays made this impossible, so the construction crew set up
temporary bleachers to accommodate the opening-night crowd. The
additional costs of doing it twice are often more than compensated for by
the benefits of satisfying the deadline.
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