lecture 10. review of lecture 9 – project risk “…an uncertain event or condition that, if it...
TRANSCRIPT
![Page 1: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/1.jpg)
Lecture 10
![Page 2: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/2.jpg)
Review of Lecture 9 – Project Risk• “…an uncertain event or condition that, if it
occurs, has a positive or a negative effect on a project objective.”
• Risks: positive and negative• Top risks in IT projects:
• Lack of top management commitment to the project
• Failure to gain user commitment• Misunderstanding the requirements• Lack of adequate user involvement• Failure to manage end user expectations
![Page 3: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/3.jpg)
• Risk Management Planning• Methodology or approach to risk management
• Roles and responsibilities of project members
• Risk management budget
• Integration of risk management activities into project life cycle
• Scoring and interpretation of risk analysis
• Risk thresholds
• Reporting formats
• Tracking
• Risk Identification – risk register• Risk response planning – project management
plan
![Page 4: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/4.jpg)
Lecture 10
Managing Project Procurement
![Page 5: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/5.jpg)
Two Perspectives
• Choices for information systems development
• Procurement process
![Page 6: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/6.jpg)
Systems Development History• First wave
– In-house information systems development– More art than science– Limited talent pool– Most systems were custom-designed in-house– Slow and costly
• Second wave– Art became a science through better defined processes
(planning and documentation)– Technology assisted in development effort– Off-the-shelf software becomes an option
• Third wave– Need for faster development– Move to agile methodologies– Software development acquired outside the organization
![Page 7: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/7.jpg)
Sources of Application Software
![Page 8: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/8.jpg)
Five External Sources for Software Development
1. Information Technology Services Firms
• Lack of internal expertise
• Package software solution not feasible
• Service firm may also host hardware
• IBM/Computer Sciences Corp./Accenture
![Page 9: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/9.jpg)
2. Packaged Software Producers
• General to niche software package development
• Focus on business functions
• Hardware platform varies
• Office 2007/MS-Project/Quickbooks/Turnkey
• Microsoft/Oracle/SAP
Five External Sources for Software Development (cont.)
![Page 10: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/10.jpg)
3. Enterprise Solutions Software or Enterprise Resource Planning (ERP)
• Integrated modules
• Business process focus
• Single data repository
• Expensive and complex solution
• Sometimes required organization to change their business processes
• SAP/Oracle
Five External Sources for Software Development (cont.)
![Page 11: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/11.jpg)
4. On-Demand Computing Providers
• Rent or license software
• “Pay as you go”
• Could be the future trend
• IBM/HP
Five External Sources for Software Development (cont.)
![Page 12: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/12.jpg)
5. Open Source Software
• Software for free
• Maintained by independent members of the computing community
• Linux/mySQL
Five External Sources for Software Development (cont.)
![Page 13: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/13.jpg)
Outsourcing• Outside organization develops or runs a
computer application for another company
– Off or on-site
– Rationale
• Economies of scale
• Access to larger talent base
• Enables company to better focus on core business
• Faster delivery
• Internal resources can be freed for other tasks
• Increased process efficiencies
• Potential for increased revenue
![Page 14: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/14.jpg)
Outsourcing to Offshore
• Security issues
• Potential language/legal/cultural barriers
• 24/7 development
• Requires close monitoring
![Page 15: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/15.jpg)
Project Procurement Management Processes (PMBOK)
1. Plan Purchases and Acquisitions
2. Plan Contracting
3. Request Seller Responses
4. Select Sellers
5. Contract Administration
6. Contract Closure
![Page 16: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/16.jpg)
1. Plan Purchases and Acquisitions
• Determination of which projects needs can best be met by obtaining services or products from outside organizations
![Page 17: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/17.jpg)
Plan Purchases and Acquisitions Inputs
• Enterprise environmental factors– Assessment of available products and services; key
providers; and any acquisition requirements
• Organizational process assets– Organizational policies/procedures/guidelines
governing procurement
• Project scope statement– Boundaries of the project (requirements, constraints
and assumptions)
• WBS and WBS dictionary– Specific work; descriptions; and deliverables
• Project management plan
![Page 18: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/18.jpg)
Plan Purchases and AcquisitionsTechniques
• Make or buy
• Expert judgment
![Page 19: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/19.jpg)
Contract Types
• Fixed-price
– Bound by the price quoted
– Less problematic when product or service is well-defined
• Cost-reimbursable
– Reimbursement of costs + profit %
• Time-and-materials
– Hourly rate billing
![Page 20: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/20.jpg)
Plan Purchases and AcquisitionsOutputs
• Procurement management plan
– Who prepares the evaluation criteria
– Plan for multiple vendor management
– Acquisition of procurement documents
– Procedures for coordinating the procurement process with other project tasks
• Statement of Work (SOW)
– Document detailing product or service requested from vendor
![Page 21: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/21.jpg)
Service Contracts
• Incident-based
– The organization is charged per visit by the service contractor
• Subscription-oriented
– A single fee is charged by the service contractor for unlimited support
![Page 22: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/22.jpg)
2. Plan Contracting
• Creation of documents required to support the Request Seller Responses and Select Sellers processes
![Page 23: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/23.jpg)
Plan Contracting – Inputs
• Statement of Work
• Make-or-by decisions
• Procurement management plan
![Page 24: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/24.jpg)
Plan Contracting – Tools & Techniques
• Standard forms/templates
• Expert judgment
![Page 25: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/25.jpg)
Plan Contracting – Outputs
• Request for Proposal (RFP)
– Document provided to vendors to ask them to propose a solution to a specific problem related to a specific project
• Evaluation criteria
– Used to rate responses from vendors to RFPs
• Statement of Work updates
![Page 26: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/26.jpg)
RFP Contents• Project overview and administrative
information section
• Technical requirements section
• Management requirements section
• Supplier qualifications and references section
• Suppliers’ section
• Pricing section
• Contract and license agreement section
• Appendices
![Page 27: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/27.jpg)
3. Request Seller Responses
• The process of obtaining responses to procurement documents produced during Plan Contracting
![Page 28: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/28.jpg)
Request Seller Responses – Inputs
• Procurement documents
– RFP
• Organizational process assets
– List of qualified sellers
• Procurement management plan
![Page 29: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/29.jpg)
Request Seller Responses – Outputs
• List of qualified vendors requested to submit a RFP
• Formal procurement documents
• Proposals
![Page 30: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/30.jpg)
4. Select Sellers
• Contract with a vendor to supply the desired product or service
![Page 31: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/31.jpg)
Select Sellers – Inputs
• Organizational process assets
• Procurement management plan
• Evaluation criteria
• Procurement document package
• Qualified seller list
• Project management plan
![Page 32: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/32.jpg)
Select Sellers – Tools & Techniques
• Weighing system
• Independent estimates
• Screening system
• Contract negotiations
• Seller rating systems
• Expert judgment
![Page 33: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/33.jpg)
Weighing System Method to quantitatively compare vendor proposals
Company Alpha Company Beta Company Gamma
Weight Rating Score Rating Score Rating Score
Price 40 3 120 3 120 2 80
Vendor technical ability 10 4 40 4 40 4 40
Solution functionality 15 4 60 3 45 2 30
Vendor experience 10 3 30 3 30 4 40
Vendor financial resources 15 4 60 3 45 4 60
PMI certified project manager 10 5 50 1 10 1 10
TOTAL 100 360 290 260
![Page 34: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/34.jpg)
• Independent Estimates– Organization determines what they believe the
estimate should cost
• Screening System– Proposals are rejected if performance criteria do not
meet a minimum value/level
• Contract Negotiation
– Discussions between the buyer and vendor in order to reach agreement on contract structure and requirements prior to signing
Weighing System (cont.)
![Page 35: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/35.jpg)
• Seller Rating System
– Historical data on vendor delivery and past performance; quality ratings; and contractual compliance
• Expert Judgment
– Those either inside or outside the organization with expertise in the specific domain of the proposed contract
Weighing System (cont.)
![Page 36: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/36.jpg)
5. Contract Administration
• Procedures that enable the organization to compare what was contracted for and what has been delivered
![Page 37: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/37.jpg)
Contract Administration – Inputs
• Selected sellers
• Contract management plan
• Performance reports
• Work performance information
• Approved change requests
– Contract terms
– Descriptions of work
![Page 38: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/38.jpg)
Contract Administration – Tools & Techniques
• Contract change control
• Buyer-conducted performance reviews
• Inspections and audits
• Performance reporting
• Payment system
• Claims administration
• Records management systems
• Information technology
![Page 39: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/39.jpg)
• Contract change control– Agreed upon process through which the contract can
be modified
• Buyer-conducted performance reviews– Structured reviews of the vendor’s progress in fulfilling
contract terms
• Inspections and audits– Procedures to determine any shortcomings in
vendor’s work processes or deliverables
• Performance reporting– Progress reports on vendor/supplier contractual
obligations
Contract Administration – Tools & Techniques (cont.)
![Page 40: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/40.jpg)
• Payment system– Procedures to pay the vendor for work performed
• Claims administration– Process for handling disputes between buyer and
vendor on work performed and resulting value
• Records management systems– Automated record-keeping system to manage
contract documentation and results
• Information technology– Supports contract administrations operations
Contract Administration – Tools & Techniques (cont.)
![Page 41: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/41.jpg)
Contract Administration – Outputs
• Contract documentation
• Organizational process asset updates
• Recommended correction actions
![Page 42: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/42.jpg)
6. Contract Closure
• Verification that all products and services contracted for are acceptable
![Page 43: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/43.jpg)
Contract Closure – Inputs
• Procurement management plan
• Contract management plan
• Contract documentation of work performed
• Contract closure procedure
![Page 44: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/44.jpg)
Contract Closure – Tools & Techniques
• Procurement audit
– A structured review of the procurement process from the Plan Purchases and Acquisition process through the Contract Administration process; including the records management system
![Page 45: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/45.jpg)
Contract Closure – Outputs
• Closed contract
– Notification to vendor the contract has been completed
• Updates to organizational process assets
– Contract file
– Deliverable acceptance
– Lessons learned documentation
![Page 46: Lecture 10. Review of Lecture 9 – Project Risk “…an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project](https://reader035.vdocuments.site/reader035/viewer/2022070409/56649e735503460f94b72aff/html5/thumbnails/46.jpg)
Questions?