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1...for anticipated risks, and to explain the basis for increased cost
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
Overhead Managers are Unproductive
Risk Management, Contingency Analysis, Value at Risk
1409 - ..
1410 - Summary/Objective
1411 -
141101 - Follow up ref SDS 23 0000, ref SDS 22 0000.
141102 - ..
141103 - "Projects" are a continual "risk management" process but there
141104 - is not a lot of liturature on this process. A means is needed to
141105 - quantify the amount of management needed and the anticipated return on
141106 - investment (ROI) based on character of the work. Author advocates
141107 - leadership to support risk taking by protecting against reprisals when
141108 - risk taking fails.
141109 -
141110 - [On 970709 contacted Tom Landauer for studies on communication
141111 - errors ref SDS 26 0000.]
141112 -
141113 - [On 970711 began calculation to quantify risks as a function of
141114 - communication, ref SDS 27 0000.]
141115 -
141116 -
141117 -
141118 - ..
1412 -
1413 -
1414 - Progress
1415 -
141501 - Risk Management on Leadership Process
141502 -
141503 - Author says risk management is a process that is built into running a
141504 - project, but the level of guidance devoted to the subject available in
141505 - the literature and available within organizations is extremely
141506 - limited. ref OF 7 4729
141507 -
141508 - Projects can be viewed as the continual process of identifying and
141509 - quantifying risks: deciding what may happen, what effect it will have
141510 - on the project, what will be done about it, acting upon it, shown at
141511 - ref OF 7 3957.
141512 -
141513 - ..
141514 - Project Management is Management of Risk
141515 -
141516 - The research is beginning to suggest that project management is
141517 - by definition a process of managing risks. Every decision taken
141518 - is based on assessment of the effort required based on assessment
141519 - of future conditions, and therefore the outcome poses a risk.
141520 -
141521 - This same point is made in the old version of the PMBOK by Max
141522 - Wideman at ref SDS 19 8499.
141523 -
141524 - Author cites lack of attention given to risk management in the
141525 - liturature, ref OF 7 4729. Possibly the level of treatment
141526 - reflects the fact that project management covers subjects aimed at
141527 - managing risks, e.g., cost, schedule, quality control; however,
141528 - these subjects are not presented as part of risk management. The
141529 - author of the article on the role of leadership in supporting risk
141530 - management, argues strongly against "padding" detailed accounts in
141531 - an estimate, ref SDS 24 line 136. However, this overlooks the
141532 - fundamental duty to recognize the difficulties of the work and all
141533 - of the factors that will impact the cost of performance. That
141534 - process is risk management.
141535 - ..
141536 - So a major objective or need for an effective risk
141537 - management process is to identify tasks that differentiate generic
141538 - risk management from the stuff managers do in pricing detailed
141539 - portions of the work. One role of "risk managment" should be to
141540 - identify the portion of unit prices that are increased to account
141541 - for anticipated risks, and to explain the basis for increased cost
141542 - and the information that indicates the potential for savings or
141543 - additional expense. This information can then be assessed in
141544 - determining the attractivenss of the undertaking as reflected by
141545 - the profit margin, and also it provides focus for management to
141546 - take prudent risks in performing the work to realize greater
141547 - savings or avoid risks of loss.
141548 -
141549 - Risk Management as a separate discipline becomes one of determning
141550 - the level of insurance to acquire, and...
141551 -
141552 -
141553 - ..
141554 - Financial Calculation of ROI
141555 -
141556 - Business decisions in most organizations are based on some
141557 - sort of quantification of the risks and possible returns or
141558 - rewards of a proposed venture. For example, many corporations
141559 - will use variations upon the "discounted cash flow analysis"
141560 - theme, where a certain key index such as IRR (internal rate of
141561 - return) may need to exceed certain corporate "hurdle" rates.
141562 - Corporations are adept at using a number of analytical
141563 - techniques such as this to evaluate business decisions made
141564 - under risk.
141565 -
141566 - However, these powerful calculations are based on thousands
141567 - of assumptions about costs and income, which themselves are
141568 - not carefully analysed for risk of deviations.
141569 -
141570 -
141571 - ..
141572 - Risk Oriented Environment, New Fad
141573 -
141574 - The TQM, reengineering motif is presented in the article to create a
141575 - distinction, ref OF 7 5793, and to create a target of change, similar
141576 - to the discussion with Jim Scott at Fluor Daniel on 960518. see the
141577 - record at ref SDS 2 1852
141578 -
141579 - This reflects the article reviewed on 970707 that suggested leadership
141580 - must support project managers in taking risks. ref SDS 24 1741
141581 -
141582 -
141583 - ..
141584 - Market Conditions Impact Risk Assessments
141585 -
141586 - A good discussion of issus is at ref OF 7 5184.
141587 -
141588 -
141589 -
141590 -
141591 -
141592 -
141593 -
141594 -
141595 -
141596 -
141597 -