decision framing in project decision-making
DESCRIPTION
What is decision framing in project risk management; identifying problems and assessing situations; defining project objectives; generating alternatives and identifying risks. For more information how to perform schedule risk analysis using RiskyProject software please visit Intaver Institute web site: http://www.intaver.com. About Intaver Institute. Intaver Institute Inc. develops project risk management and project risk analysis software. Intaver's flagship product is RiskyProject: project risk management software. RiskyProject integrates with Microsoft Project, Oracle Primavera, other project management software or can run standalone. RiskyProject comes in three configurations: RiskyProject Lite, RiskyProject Professional, and RiskyProject Enterprise.TRANSCRIPT
Decision-MakingIn Project Management
Decision Framing
Intaver Institute Inc.303, 6707, Elbow Drive S.W, Calgary, AB, CanadaTel: +1(403)692-2252Fax: +1(403)459-4533www.intaver.com
What is decision framing?
• Identifying problems and assessing situations • Defining project objectives • Generating alternatives and identifying risks using qualitative and
quantitative risk analysis (e.g. Monte Carlo simulations)
Assessing Business Situation
1. Resource availability, including material and human resources
2. Cost of labor, materials, and supplies
3. Competition
4. Market situation, including potential market trends
5. Expertise available in the organization for the specific project
6. Business processes and best practices in the organization: are they suitable for the particular project
7. Organizational performance and corporate culture: are they suitable for the project
8. Legal and regulatory environment
9. Site specific issues, related to doing business in the particular area or country
10. Customer relationships
11. Weather and other environmental factors
12. Project funding
“The Checklist”
Decision Conferencing
Decision-maker
Expert
Expert
Decision Analysts
Brainstorming
IdeaGenerator
Moderator
Erudite
Devil'sAdvocate
Scribe
PositiveReviewer
Filter Diagrams
Problem
Solution
Block
Block
Block
Filter 1 Filter 2
Solution
Solution
Solution
Solution
Solution
Solution
Solution
Solution
Filter diagram is powerful tool for new product development
Example of Filters for New Idea, Technology, Solution
• Your idea should not be completely new. Avoid being a technology pioneer, they rarely succeed in business. Try to provide a better solution for existing problems.
• Your idea should be extendable. You should be able to build a number of products and services around this idea.
• Your idea should not be trivial. All trivial ideas have either been implemented or cost a lot of money to produce and market.
• Your idea should have a hidden technological value that would be difficult for somebody else to implement.
Creativity
Creative thinking is key to developing alternative solutions
Example of Blocks
• Stereotyping• Not Seeing the Forest for the Trees• Inability to See the Problem from
Another Perspective• Fear of the “Far-Out” Alternative• “Do Nothing” Bias• Premature closing
Mind Mapping Tools
Project Risks
Technical
Requrements
Technology
Complexity
Performance
Quality
Safety
Subcontractor
Components
Legal
Market
Customer relationship
Site specific issues
External
Project
Organizational
Project dependencies
Resources
Funding
Prioritization
Estimating
Planning
Control
Communication
Material
Personnel
Management
Use mind mapping tools to identify risks
Force Field Diagrams
Land Purchase
FOR AGAINST
Location
Low cost
Potential appreciation
Lack of infrastructure
Legal issues
Use Force field diagrams to identify threats and opportunities
Multi Criteria Decision Making
1. Economic indicators, such as net present value (NPV), rate of return (ROR), and project cost
2. Project duration indicators, such as total duration, finish time, duration of particular phase
3. Resource usage, including material and work resources
4. Project scope indicators, such as number of features implemented
5. Quality indicators, such as number of defects
6. Safety indicators, such as number of accidents
7. Environmental indicators, such as level of emissions
Fundamental and Mean Objectives
Find Spouse
Find good lookingspouse
Find richspouse
Find spousewith common
Find spousewith similar cultural
background
interests
Find spouse
activitieswho likes outdoor
movieswho likes sci-fiFind spouse
Joint localchamber of commerce
Jointhiking club Attend cultural
society meetingInvite somebody
to watch sci-fi movie
Mos
t im
por t
ant
obj
ecti v
es
Identifying Risks
1. Duration and cost of activities
2. Lags between tasks
3. Resource allocation
4. Calendars: for example, certain days an be lost for example due to weather conditions
5. Work breakdown structures: certain tasks will be or will not be executed under certain conditions
Techniques For Risk Identification
Documentation review: a review of relevant project documents associated with current and previous projects. If a plan is inconsistent with requirements, it can be a source for potential risks.
Information Gathering Techniques: including brainstorming, the “Delphi” technique (see Chapter 11), interviewing, decision conferencing, and SWOT analysis. (strength, weaknesses, opportunities, and threats).
Assumption Analysis; identify risks by reviewing inconsistencies or inaccuracies in original project assumptions.
Diagramming Techniques, including flow charts, cause and affect diagrams, and influence diagrams, event chain diagrams, and mind maps
Generation Alternatives
PurchaseMaterialsOffshore
ReduceCost ofLabour
HedgeFuelCosts
Testingon Each ProjectPhase
Use QATools
Hire MoreQA Analysts
ClarifyRequirementsUpfront
DemonstrateProduct to theClient Regularly
Use RequirementManagementSystem
Cost Quality Scope
Risk Breakdown Structures
Risk breakdown structures (RBS) can be used for risk assessment in performing quantitative risk analysis on project schedules, cost, and other parameters
Risk Response Planning
Dealing with threats:
1. Avoid
2. Transfer
3. Mitigate
4. Accept
Dealing with opportunities:
1. Exploit
2. Share
3. Enhance
4. Accept
Risk Register
The risk register should include a risk matrix that lists, ranks, and prioritizes project risks
Future Reading
Lev Virine and Michael Trumper
Project Decisions: The Art and Science
Management Concepts, Vienna, VA, 2007
Project Think:Why Good Managers Make Poor Project
Choices
Gower, 2013
Questions?