Project Risk Identification Methods - Essay Example

Part IT Project Risk Identification Methods Project risk is defined as the “combination of the probability of an event and its consequences” (Webb, 2013, p. 25). This includes unforeseen situations and circumstances that can occur in the form of an event, with a known degree of probability of occurrence (Harris, 2014; Keyes, 2012). There are a wide range of situations and circumstances within which risks can occur and this includes internal matters to other business circumstances (Atkins & Simpson, 2014). Risk identification methods are tools and techniques used in determining what risks or hazards exist or are anticipated, their characteristics, remoteness in time, duration period, and possible impacts and control measures that can be applied to them (Kendrick, 2015). Hypothetical Case Analysis Consider a case where we have to create a software package for a small bank in London. The main tasks that will be conducted include: 1. Identification of the current state and scope of work of the bank; 2. Develop users’ profile 3. Gather relevant data 4. Document current tasks 5. Document problems and opportunities 6. Identify and document future tasks 7. Develop usability specifications and pointers 8. Create software 9. Test 10. Delivery Each of these ten pointers comes with specific information and stakeholder requirements or expectations. However, the entire project and each stage of the project as well as the usage of the deliverable, which in this case is a software comes with many risks and issues that ought to be defined and contained by the project team members. Advantages of Risk Identification Methods Basically, all IT projects, including the development of this software has its risks. This ranges from risks of failing to meet the project’s specific requirement which might attract some kind of legal or financial issues (Project Times, 2014). There are also risks that the software might have bugs and issues that can lead to major problems for the bank. Risk identification method application is the most important phase in the process of handling IT project risks. This is because it brings to the fore, important and fundamental issues by defining the scope of risks and assigning an individual or team to deal with the risks. This also gives room for the collection of data and information relevant to the risk in order to find possible solutions to deal with the risk before it comes up. Risk identification methods aids in the provision of a structured solution to potential risks in a project. Thus, if conducted properly, it will allow the software team to identify all the logical and necessary risks before they occur. This allows for planning. When they occur, they can be contained because there is already an arrangement to deal with them. Additionally, when core risks are identified and contained, other new risks and issues that are not identified can be identified much quicker when they occur. This is because the core risk identification methods can be extended to new unfolding risks. For the team conducting the project, risk identification methods can aid in negotiating fairer contracts with the bank because it shows the way and manner in which things ought to be done and enables proper and realistic assessment of issues (Oracle, 2009). Limitations of Project Risk Identification Methods Project risk identification methods are neither perfect nor foolproof. They are limited to the competencies and experience of the project team members. An inexperienced team is not likely to deduce issues comprehensively. Therefore, there will be a lot of risks that are potentially going to be missed. In our scenario, if our project team members have never had any experience in working in a bank environment or a bank software project, they might not understand the risks of fraud and potential causes of errors in a bank software package. This makes the methods useless and ineffective. Another limitation of project risk identification methods is that it fails to predict the future accurately due to uncertainty. There are many unforeseen events that could come up in a given workplace like this bank that no one can logically identify before they occur. This renders project risk identification methods useless. Methods of Project Risk Identification in the London Bank Software Scenario In this process, there are four main techniques that might be utilised in order to provide an optimum level of project risk identification and management. They include: 1. Interviewing: This will be done with the client as well as other technical IT professionals with experience in banking software development. Since it is assumed that our team is not well versed in banking IT risks, it is necessary to conduct an interview with at least two parties – one an internal member of the bank’s management and another, an independent IT software manager. The submissions from the interview will give information about the main risks and issues with the bank in relation to fraud, error and other IT problems. 2. Brainstorming: This will be done when the project team is put together. And the team must include someone from within the bank as well as our IT technical team. In the process, all risks identified in the interviews as well as other general risks that are known to the team can be presented and their practical implications can be deduced from the brainstorm activity. This will provide a practical framework for dealing with the problems and issues. 3. WBS: After the brainstorm is completed, a Work Breakdown Structure can be drawn and this will culminate in a system of events. The risks within and around each event can be brought to the fore and deduced properly. 4. Delphi Method: Within the WBS, specific risks at each stage of the project can be identified. These risks can be further critiqued through the Delphi method where experts will present their specific views and estimation of each individual risks. This will be aggregated and a comprehensive risk management plan can be drawn. Potential Risks with Methods Interviewing 1. Some vital information might be withheld for confidential reasons 2. Scope of interview determines the relevance of information. There is a difficulty in defining the scope of such interviews This might lead to gathering information that are not relevant; 3. The validity and reliability of interviews are problematic since they are based on the competencies of the interviewee and is subjective Brainstorming 1. Too general in outlook and might achieve very remote consequences 2. The team members’ competencies define the extent to which risk identification will succeed 3. Might be time consuming and achieve very little WBS 1. Technical and requires a lot of diligence to be meaningful to risk management; 2. Getting a consensus in the WBS is sometimes difficult and time-consuming; 3. Comes with issues relating to the optimisation of team capabilities which might in itself lead to other risks. Delphi 1. For Delphi to be meaningful, it might need to bring on board experts and this might be expensive 2. Findings might not be easily quantifiable 3. The objectivity of Delphi risk identification could be thwarted by experts’ personal views and prejudices. Conclusion Due to the circumstances at hand, it will be recommended that there should be a combination of all four different approaches. However, it will be expected that the firm spends more time and money on the interviews and Delphi approaches for risk identification. Brainstorming should be a minor aspect of the process. WBS must be more technical and the project manger must take the central role of dealing with it. Part 2: Critical Chain Methodology in Project Management Critical Chain Methodology (CCM) is an approach to completing IT projects which is superior to the traditional approaches (Rossman, 2012). It presents an improved method of completing projects. In the traditional approaches of completing projects, the work breakdown structure provides 100% of the time and resources for each stage of the project (Nicholas & Steyn, 2013). This leads to complacency in most cases. This is due to what is known as the student syndrome where procrastination comes up amongst project team members (Kerzner, 2014). Additionally, in situations where resources must be used concurrently in a project, there is the need for events further down the WBS to wait for preceding projects to be completed before they can get all the resources they need (Roebuck, 2012). CCM assumes that when we are estimating time for events in the work breakdown structure, we give the maximum period within which we can complete it. This gives us confidence and an accurate view of how much time we will need. Therefore, when we cut down on that time, we are able to get stimulated and build a strong desire to work on the project and complete it as quickly as possible. This motivates us and gives us a strong sense of urgency. The cutting of the time for each event gives room for three types of buffers: 1. Project Buffer: This is the overall time that will come up at the end of the project due to the small cuts in projects. It can be used to improve the overall project further. 2. Feeding Buffer: These are inserted on the Critical Path to ensure that there are linkages between the feeding path and Critical Path. This ensures that there are safety mechanisms to prevent the project from delaying and from disregarding important projects. 3. Resource Buffers: These are put in the events to ensure that critical skills and resources are made available in-between events. Example of the Software Development Project In the software development project above, I will use CCM to eliminate delays. This is because CCM allows a project manager to cut each project activity’s time of completion, usually by half. Therefore, the time allotted for each project is reduced by 50%. This means that instead of having 100% of the time to complete each stage of project, there is a tilt towards a process of just completing it in just 50% of that time. All other things being equal, if all the stages of the project are completed within that 50% period, it means there will be a buffer of 50% of the time after it is completed and this can be a time that can be used for the improvement of the overall project. Therefore, as each project activity is completed earlier, the next activity comes up and it is completed earlier. This causes projects to be done quickly and according to a better level of specification. The critical chain, which is the longest chain of dependent events keeps moving quickly. And the transfer and movement of resources is done at a faster pace when CCM is utilised. In cases where resources are to move from one project phase to another within the critical path, there is the staggering of the project starts to allow the resource to move around. This will allow things to move within the buffer. In most projects, it might be best to allow projects to be done within 50% of the time. Therefore, considering the example above, there will be the opportunity for each of the activities within the bank software development project to be cut by half. This way, every team member will have to work faster and smarter. Where resources have to be passed on, for example, in cases where a team will have to use the same office or computer laboratory to achieve the same goal, they will have to stagger a bit. Therefore, if a preceding event meant to be completed in 50% of the time is delayed and is completed in 75% of the time, the next team will have to wait briefly. This allows for staggering within the buffer, which was supposed to be 50% but has been reduced to 25%. This ensures that the entire project goes on quickly and is completed before the deadline. In this case, it can also be said that the project can be completed earlier. It can be completed before the strict deadline. And within that time frame, there could be further quality checks and evaluations to ensure that the project is of an appreciably high standard. Where there are late events within the critical path, there could be measures to deal with them quickly. Also, there can be better approaches to risk management and the Pareto principle can be applied to ensure efficiency. Part 3: Waterfall and Agile Methodology – Compatibility with Project Management The Waterfall Model of IT project completion is a sequential approach through which software development processes are carried out and it progresses steadily like water flowing downwards from a waterfall with very limited opportunities of going back (Fox & Van Der Waldt, 2014). Therefore, the model requires projects to go through the traditional phases once. After that, the project team proceeds to the next phase without returning to it again. The traditional processes include conception, initiation, analysis, design, construction, testing, implementation and monitoring/maintenance (Pries & Quigley, 2011). Agile software development on the other hand utilises a group of dynamic methods in which there is an adaptive system of developing the software (Poppendieck & Poppendieck, 2012). Agile software development is done through the use of cross-functional teams who engage in continuous development and redevelopment of ideas and concepts related to the software development project (Chromatic, 2014). The Agile software development methodology is one that is often complemented by scrum or daily meetings in which all the members of the software development team come together to update the project team members of their progress. Agile methodologies are iterative and it involves various team members who are taken from different units of stakeholders who make contributions on different levels to the project and its development and creation (Highsmith, 2012). The Waterfall method is appropriate for a project in which there is a specific and definite goal or deliverable. This includes simple projects and projects with basic components and ends. Due to its simple nature, it can be easily measured and evaluated at every stage. It is also appropriate where the project ought to be completed without much interference from the team members. Thus, simple projects are suited for this kind of treatment. Also, in projects where technical precision is important and vital, the Waterfall model is more appropriate. This is because the technical team are tasked with ensuring that they monitor every phase and every activity stage before it proceeds to the next stage. This means there must be a critical and thorough evaluation of each stage to achieve accuracy and precision. This eliminates obvious issues and bugs in the system. The Agile method is more suited for complex projects with a wider stakeholder base. This is because in such projects, there must be the representation of several different groups of people. Hence, there is the need for a broad array of IT groups and units to work together and continuously evaluate and analyse each and every stage and do and redo the project through thorough communication and discussions. Also, in cases where customer involvement is important, Agile methodology is the best approach to project management because it allows the customer to make contributions directly, as the project is being carried out. This is through involvement in each phase of the project and participation in testing and the option of making contributions or suggestions. Case Example Considering an example of the creation of a smartphone software for the European and American markets and a bespoke secret security software for a government in a small totalitarian country. There will be two different approaches that will be most appropriate for the system. The smartphone software will be sold on the Western market. This is a market where consumers have the right to make choices. Therefore, there is the need for the software to be developed and redeveloped. This can be done by setting up a system of continuous checks – a scrum interview system. This will include different developers who represent different interests including diverse consumers and their views on the product. The constant interviews and communication will allow the team to improve the product and put it in the right shape and form to make it acceptable to the consumer on the open market. For the secret security software, there might be an emphasis on technical competency and confidentiality. The specifications are definite and they can be met. Moreover, a few people will use the deliverable in the totalitarian country. Therefore, a Waterfall Model will be most appropriate. This is because it allows technically endowed experts to get onto the project. Once that is done, there will be the ability of the team members to go through the processes and design and produce the product faster without involving too many people to breach the confidentiality requirements. This can benefit from strong quality controls at each stage and could be faster. In conclusion, the Waterfall Model is more suited for IT projects that are simple and require technical accuracy. On the other hand, the Agile Method is better suited for complex projects in which there are different constituents of stakeholders who might have views and contributions about the project as it proceeds. References Atkins, J. B., & Simpson, G. A. (2014). Managing Project Risk: Best Practices for Architects and Related Professionals. Hoboken, NJ: John Wiley and Sons. Chromatic, J. M. (2014). The Art of Agile Development. London: OReilly Media. Fox, W., & Van Der Waldt, G. (2014). A Guide to Project Management. Cape Town: Juta. Harris, E. (2014). Strategic Project Risk Appraisal and Management. Surrey: Gower Publishing. Highsmith, J. A. (2012). Agile Software Development Ecosystems. London: Addison Wesley. Kendrick, T. (2015). Identifying and Managing Project Risk: Essential Tools for Failure-Proofing. New York: AMACOM. Kerzner, H. (2014). Project Management: A Systems Approach to Planning, Scheduling, and Controlling. Hoboken, NJ: John Wiley and Sons. Keyes, J. (2012). Leading IT Projects: The IT Managers Guide. New York: CRC Press. Nicholas, J. M., & Steyn, H. (2013). Project Management for Business, Engineering, and Technology. London: Elsevier. Oracle. (2009). The Benefits of Risk Assessment for Projects, Portfolios and Businesses. Retrieved from An Oracle White Paper: http://www.oracle.com/us/products/applications/042743.pdf Poppendieck, M., & Poppendieck, T. (2012). Lean Software Development: An Agile Toolkit. London: Addison Wesley. Pries, K. H., & Quigley, J. M. (2011). Scrum Project Management. New York: CRC Press. Project Times. (2014). Project Risk Identification for New Project Manager. Retrieved from Project Times: http://www.projecttimes.com/articles/project-risk-identification-for-new-project-manager.html Roebuck, K. (2012). Innovation Management: High-impact Emerging Technology. London: Emereo Publishing. Rossman, B. (2012). Application Lifecycle Management - Activities, Methodologies, Disciplines . London: Emereo Publishing. Webb, A. (2013). The Project Managers Guide to Handling Risk. Surrey: Gower Publishing. Read More