CONTACTS 

SUBJECTS
Cost/Benefit of Better Communications
Market Fears Being First to Use New Methods
Communication Manager Fewer People More
Cost Benefit - Increase Usefulness, Reduce
Level of Effort, Calculate Cost Benefit
Risk Management, Contingency Analysis, Value at Risk
Leaders Overcome Fear, Ignorance, Denial
Leadership Helps People without Time to
Bottom up Leadership, Design
Denial Contingency Needed Avoid Errors,

1912 -    ..
1913 - Summary/Objective
1914 -
191401 - Follow up ref SDS 23 0000, ref SDS 22 0000.
191402 -
191403 - This paper adds new support for Communication Metrics by setting the
191404 - need for funds to pay for actions that may reduce cost and or increase
191405 - income, but which hold the risk of failure, and second, it proposes a
191406 - management reserve to deal with problems and mitigate costs of risks
191407 - that materialize.
191408 -
191409 -     [See follow up on risk management and leadership, ref SDS 24 line
191410 -     78.]
191411 -
191412 -  ..
1915 -
1916 -
1917 - Progress
1918 -
191801 - Leadership's Role in Contingency and Control Process
191802 -
191803 - This paper presented at the 1994 PMI Seminar/Symposium in Vancouver,
191804 - British Columbia, Canada, deals with the role of leadership to empower
191805 - Project Managers with entrepreneurial focus and operating processes to
191806 - meet the dynamic risks of a changing business environment, ref OF 5
191807 - line 30.
191808 -
191809 -      Leadership needed to empower Corps of Engineers Claim Team with
191810 -      Communication Metrics, cited on 970703. ref SDS 19 9603
191811 - ..
191812 - Upper management must require and support:
191813 -
191814 -        •  Contingency planning and control, ref OF 5 li
191815 -
191816 -        •  Workable strategies should be reinforced and dysfunctional
191817 -           strategies abandoned and replaced by effective
191818 -           methodologies, ref OF 5 line 37
191819 -
191820 -        •  <1741 Prudent risk taking by establishing a corporate risk
191821 -           philosophy, ref OF 5 line 40
191822 -
191823 -        •  Management reserve, independent of the project budget,
191824 -           should be established to pay the liability that could result
191825 -           when an attempted risk proves unsuccessful, ref OF 5 line 42
191826 -
191827 -           [On 980307 Andy Grove recommends experimenting to discover
191828 -           better work processes. ref SDS 26 3416]
191829 -
191830 -        •  <3122 Budget and schedule contingency plans should be
191831 -           appropriated for allocation by the Project Manager to deal
191832 -           with errors and omissions inherent in any project plan,
191833 -           ref OF 5 line 45
191834 -
191835 -        •  Estimate "padding" should not be used, ref OF 5ref OF 5 line 103, ref OF 5 line 379
191837 -
191838 -              This needs more explanation, because if particular
191839 -              aspects of the work are risky and contingent, then that
191840 -              should be recognized for the particular work, and it
191841 -              should not be spread to the entire project.
191842 -
191843 -              I think the author is saying not to allocate general risk
191844 -              to individual components of the work.
191845 -
191846 -        •  <GH52 Reconciliation between "Top Down" budget allocations
191847 -           and "Bottom up" detailed estimates, ref OF 5 line 56, also
191848 -           discussed at ref OF 5 line 713.
191849 -
191850 -  ..
191851 - Risk Management Integrates Opportunity and Loss Avoidance
191852 -
191853 - This article offers additional rationale for contingency planning that
191854 - the other articles have not addressed, at least I have not noticed
191855 - this point being made elsewhere.
191856 -
191857 - The author says contingency budgets provide a cushion for taking risks
191858 - to improve performance, which might not succeed, ref OF 5 line 70.
191859 -
191860 -     This might provide a foundation Communication Metrics, since it is
191861 -     a method to avoid loss due to misunderstanding, and discover
191862 -     savings in a fixed price contract.
191863 -
191864 -           [On 980307 Andy Grove recommends experimenting to discover
191865 -           better work processes. ref SDS 26 3416]
191866 - ..
191867 - I discuss this concept in reviewing the PMBOK treatment of risk
191868 - mangement on 970701, ref SDS 18 5503, and again today. ref SDS 23 0409
191869 -
191870 -
191871 -  ..
191872 - Contingency - Defined
191873 -
191874 - Contingency is a supplemental allocation of time and expense to
191875 - account for errors, omissions and other impacts that are not
191876 - identifiable and/or cannot be quantified in advance of performing the
191877 - work, ref OF 5 line 97.
191878 -
191879 -
191880 -
191881 - Schedule Contingency - Compression
191882 -
191883 - Author holds stakeholders generally avoid permitting time contingency,
191884 - per ref OF 5 line 81, ref OF 5 line 128.
191885 - ..
191886 - A procedure for compesssion the schedule to develop a schedule
191887 - contingency is explained at ref OF 5 line 135.
191888 -
191889 - A set of policies for schedule contingency is at ref OF 5 line 590.
191890 -
191891 -
191892 -  ..
191893 - Specification Contingency - Technical Risks
191894 -
191895 - This is explained at ref OF 5 line 179, as budgeting for time and
191896 - cost based on risks taken in specifications of technical work, which
191897 - may not be successful.
191898 -
191899 -
191900 -  ..
191901 - Leadership Denial of Contingencies Creates Seeds of Failure
191902 -
191903 - Author cites leadership denies need for contingencies; claiming
191904 - budgets and schedules are realistic and attainable; and the risks
191905 - associated with the project are minimal. Unfortunately, denial does
191906 - not abate the problem. Risks that are taken without understanding
191907 - implications of an undesired outcome, nor adequate preparation for
191908 - remedial action.  Disaster occurs. ref OF 5 line 229.
191909 -
191910 -     [On 971202 HQUSACE were unaware of new realities of information
191911 -     technology impacting management productivity. ref SDS 25 3231]
191912 -
191913 -     [On 980307 Andy Groves cites denial of problems they face causes
191914 -     management failure. ref SDS 26 3740]
191915 -
191916 -
191917 -  ..
191918 - Sources of Project Impact Requiring Contingent Allowances
191919 -
191920 - Cost and schedules are subject to error due to lack of information,
191921 - imperfect information, inexperience of estimators, complexity of the
191922 - work, errors and omissions in preparation of calculations.
191923 -
191924 -      [See better list from PMBOK, ref SDS 18 line 118.]
191925 -
191926 - Project execution will make mistakes that require correction, and
191927 - will suffer the impact of internal and external politics that will
191928 - prevent optimal performance.
191929 -
191930 - Project environment will be impacted by the economy and politics.
191931 -
191932 -
191933 -
191934 -  ..
191935 - Quantifying Contingencies Not Explained
191936 -
191937 - This paper says contingencies should be allocated, but does not seem
191938 - to offer guidelines for determining the amount.
191939 -
191940 -
191941 - Management Reserve for Contingent Remedial Action
191942 -
191943 - Author recommends establishing a management reserve account to solve
191944 - problems arising from risks, proportional to the probability that the
191945 - funds will be needed. ref OF 5 line 660.
191946 -
191947 -     There is no discussion of using this fund to avoid the occurance
191948 -     of problems nor to discover the opportunities otherwise overlooked
191949 -     by management, which seems to conflict with the concept that
191950 -     contingency accounts are to encourage managers to take risks, ref
191951 -     OF 5 line 70.
191952 -
191953 -
191954 -
191955 -
191956 -
191957 -
191958 -
191959 -
191960 -
191961 -
191962 -
191963 -
191964 -
191965 -
191966 -
191967 -
191968 -
191969 -
191970 -
191971 -