Chapter 6: Project Scheduling and Risk Managementssjaswal.com/wp-content/uploads/2020/03/SEPM_chp6.pdf · #1 Chp 7: Network Scheduling and PDM #1 Chp 8:PERT, CPM, Resource Allocation

CHAPTER 6: PROJECT SCHEDULING

AND RISK MANAGEMENTSLIDES BY: MS. SHREE JASWAL

TOPICS

Developing the Project Schedule,

Network Diagrams (AON, AOA),

CPM and PERT,

Gantt Chart,

Risk Identification,

Risk Projection

RMMM

CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 2

WHICH CHAPTER? WHICH BOOK?

Textbook:

* Chp 7: The Project's Schedule and budget

Reference Books:

#1 Chp 7: Network Scheduling and PDM

#1 Chp 8:PERT, CPM, Resource Allocation and GERT

#1 Chp 9: Cost estimating and budgeting

#1 Chp 10:Managing risks in projects

Note:

* Textbook: "Information Technology Project Management" Jack T. Marchewka

#1 Reference book: "Project Management for business and Technology" John M. NicholasCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 3

THE PROJECT PLANNING FRAMEWORK


PROJECT TIME MANAGEMENT AS DEFINED IN

PMBOK

Activity definition

Activity sequencing

Activity duration estimation

Schedule development

Schedule control


DEVELOPING THE PROJECT SCHEDULE

Project Management Tools

Gantt Charts

Project Network Diagrams

Activity on the Node (AON), Activity on arrow (AOA)

Critical Path Analysis

Pert

Precedence Diagramming Method (PDM)


GANTT CHART FOR PLANNING

Simplest and most commonly used scheduling technique

The chart consists of horizontal scale divided into time units-

days, weeks or months and vertical scale showing project work

elements.


GANTT CHART

Advantages:

Gives a clear pictorial model of the project.

Simplicity for the planner and the user.

Easy to construct & understand.

Is a means for assessing the status of individual work elements and the project as a whole.

It can be used as Expense Charts

1.for labor planning

2.resource allocation

3.budgetingCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 8

GANTT CHART FOR PLANNING



EXAMPLE OF GANTT CHART

GANTT CHART REPORTING

PROJECT’S PROGRESS


EXAMPLE TO MONITOR THE PROGRESS USING GANTT

CHART


GANTT CHART

Drawbacks:

It does not explicitly show interrelationships among work elements.

Gantt charts are often maintained manually. This is easy task in small

projects, but is burdensome and a disadvantage in large projects; it

causes apathy and results in charts becoming outdated.


GANTT CHARTS EXAMPLE

Activity Start time Duration

A 0 5

B 6 3

C 7 4

D 8 5


GANTT CHART EXAMPLE: PROJECT DURATION IS SET TO 13 WEEKS

0 6 12 18 24 30

Gantt charts

Time

Activitie

s


GANTT CHARTS EXAMPLE

Suppose C & D must start only after activity B is completed.


GANTT CHARTS EXAMPLE: PROJECT DURATION GETS INCREASED TO 14

WEEKS

0 6 12 18 24 30

Gantt charts

Time

Activitie

s


WHY NETWORKS?

Gantt charts don’t explicitly show task relationships

don’t show impact of delays or shifting resources well

network models clearly show interdependencies



LOGIC DIAGRAMS

network of relationships

elements & relationships (sequence)

this is ACTIVITY-ON-NODE

can have ACTIVITY-ON-ARC

research

what’s

been done

research

what needs

doing pick

final

topicinternet

research

write print

LOGIC DIAGRAMS & NETWORKS

Activity on node diagrams


A,6 B,9

LOGIC DIAGRAMS & NETWORKS

Activity on arc or arrow


21 3

EXAMPLE OF AON N/W

Activity Duration Immediate Predecessor

A 6 _

B 9 A

C 8 A

D 4 B,C

E 6 B,C

Duration is given in weeksCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 22

EXAMPLE OF AON N/W

AON diagram corresponding to data in prev table

Critical path A-B-E:21 weeks


Start A,6

B,9 D,4

C,8 E,6

Finish

AOA EXAMPLE

Activity on arc or arrow

Same example on AON network


1 2

A,12

AOA EXAMPLE


Activity Immediate Predecessors Duration

A _ 6

B A 9

C A 8

D B,C 4

E B 6

F D,E 6

Duration is in days

AOA DIAGRAM


1 2

AOA EXAMPLE



A _ 6

B A 9

C A 8

D B,C 4

E B 6

F D,E 6

Duration is in days

AOA DIAGRAM


1 2

4

3

AOA EXAMPLE



A _ 6

B A 9

C A 8

D B,C 4

E B 6

F D,E 6

Duration is in days

AOA DIAGRAM


1 2

4

3

55 6

DUMMY ACTIVITIES

As per the rule followed by AOA, an arrow connecting two

events can represent at most one activity i.e if 2 or more

activities are performed in parallel they must be represented

by separate arrows

Thus a common successor for 2 parallel activities have to be

connected by a dummy activity.

A dummy activity serves as a “connector” and represents

neither work nor timeCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 31

AOA EXAMPLE



A _ 6

B A 9

C A 8

D B,C 4

E B 6

F D,E 6

Duration is in days

AOA DIAGRAM


1 2

4

3

5 6

7

AOA EXAMPLE



A _ 6

B A 9

C A 8

D B,C 4

E B 6

F D,E 6

Duration is in days

AOA DIAGRAM

3-5, 4-5, 7-8,6-8 are dummy activities


1 2

4

3

5 6

7

8 9

DUMMY ACTIVITIES

Dummy activities are used in AOA diagrams in case a node has more than one immediate predecessor.

In previous example:


D B,C 4

F D,E 6

To represent activities D & F we use dummy activitiesCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 36

REDUNDANT ACTIVITIES

It is only essential to know the immediate predecessor of a

node while constructing a network.

All the predecessors except the immediate predecessors of a

node are redundant predecessors( activities).


ACTIVITY PREDECESSOR IMMEDIATE PRED: REDUNDANT PRED:

A --

B A A

C A A

D A,B,C B,C A

E A,B,C,D D A,B,C

F A,B,C B,C A

REDUNDANT ACTIVITY


AON VERSUS AOA

AON n/ws

There are no dummy activities

They are simpler

They are easier to construct.


AON V/S AOA N/W’S

AOA n/w’s

AOA method used just as often, probably because it was developed first and is better suited for PERT procedures

The PERT model places emphasis on events and in the AOA method events are specifically designated by nodes.

AOA diagrams use line segments to represent flow of work and time, it is easy to construct schedules that are similar in appearance to Gantt charts but incorporate advantage of networks


AON V/S AOA N/W’S

Most software packages create AOA n/w’s that look similar

to Gantt charts.

In particular it is best to select one form of technique., AON

or AOA, and stick to it.


CRITICAL PATH

The longest path from the origin node to the terminal node

Gives the expected project duration (Te)

One project can have more than one CP

Shortening activities on CP (critical activities) will help reduce the project duration

Shortening activities NOT on CP has no effect on project duration

Delay in any activities on CP will result in delay of project completion


Start A,6

B,9 D,4

C,8 E,6

Finish

Critical path A-B-E:21 weeks

Activity,

duration

predecessor

A,6 -

B,9 A

C,8 A

D,4 B,C

E,6 B,C


EARLY TIMES – EARLY START & EARLY FINISH

Specifies when at the earliest the activities can be performed.

ES & EF are computed by taking a FORWARD pass through the network

When an activity has several predecessors, its ES is the MAXIMUM of

all EF of predecessors


LATE TIMES – LATE START & LATE FINISH

Latest allowable times that the activity can be started and finished without delaying the completion of the project.

LS & LF are computed by taking a REVERSE pass through the network. LS for the last activity (Ts) is taken same as the EF for that activity (Te); larger value can be selected if project does not have to be completed by EF.

When an activity with multiple paths leading back, backward path with MINIMUM of all LS is selected.


CRITICAL PATH

Eg:

activity duration__ predecessor

A requirements analysis 3 weeks -

B programming 7 weeks A

C get hardware 1 week A

D train users 3 weeks B, C


CPM EXAMPLE USING AOA METHOD

Critical path is: A-B-D 13 weeks


1 2

3

4

5 6

CPM TERMS

Total slack= LS-ES or LF-EF

Total slack of all activities along critical path is zero.

Hence delaying any of these activities will delay the project.


CPM TERMS

Free Slack= ES( earliest successor)- EF

In the eg, activity C has a free slack of 6 weeks( 10-4=6)

Free slack indicated the amount by which activity can be

delayed without affecting the start of its successor activity.


CPM

can have more than one critical path

activity duration predecessor

A requirements analysis 3 weeks -

B programming 7 weeks A

C get hardware 7 weeks A

D train users 3 weeks B, C

critical paths A-B-D

A-C-D

both with duration of 13 weeksCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 50

PRECEDENCE DIAGRAMMING METHOD (PDM) Need for PDM:

“Predecessor - Sucessor” type of networks assume a “strict” sequential relationship between activities

They do not provide for tasks that can be started when their predecessors are only “partially” complete

PDM allows multiple relationships between activities

Finish-to-Start (FS)

Start-to-Start (SS)

Start-to-Finish (SF)

Finish-to-Finish (FF)CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 51

PDM

Finish-to-Start (FS)

The start of the Activity B can occur n days, at the earliestafter the finish of Activity A

Start-to-Start (SS)

The start of Activity B can occur n days, at the earliest after the start of Activity A


PDM

Start-to-Finish (SF)

The finish of Activity B must occur n days, at the latest after the start of Activity A

Finish-to-Finish (FF)

The finish of Activity B will occur in n days, at the latest after Activity A finishes



PDM: RELATIONSHIPSA 15

PlasterWall

B 10Tear-down scaffolding

FS=5

A

FS=5

B

A 15Furniture move in

B 10Peoplemove in

SS=5

A

SS=5

B

A 15Test

new system

B 10Phase outold system

SF=20

A

SF=20

B

A 15Lay

asphalt

B 10Paint

parking linesFF=5

A

FF=5

B

PERT

The two most commonly used methods for project planning and scheduling are:

Program Evaluation and Review Technique (PERT)

Critical Path method (CPM)


PERT

Program Evaluation & Review Technique (PERT)

The Framework for PERT and CPM

There are six steps which are common to both

1. Define the Project and all of it’s significant activities or tasks.

2. Develop the relationships among the activities. Decide which activities must precede and which must follow others.


PERT

3. Draw the "Network" connecting all the activities. Each Activity should have unique event numbers. Dummy arrows are used where required to avoid giving the same numbering to two activities

4.Assign time and/or cost estimates to each activity

5. Compute the longest time path through the network. This is called the critical path.

6.Use the Network to help plan, schedule, monitor and control the project.


PERT

PERT was developed for application in projects where there is uncertainty associated with the duration and nature of activities.


PERT

reflects PROBABILISTIC nature of durations

assumes BETA distribution

same as CPM except THREE duration estimates

optimistic

most likely

pessimistic


PERT

Three time estimates :

The Optimistic (a)

The minimum time in which the activity can be completed

The Most Likely (m)

Completion time having the highest probability (normal time to complete the job)

The Pessimistic (b)

The longest time an activity could take to completeCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 60


PERT

a = optimistic duration estimate

m = most likely duration estimate

b = pessimistic duration estimate

Mean or expected time for completion of an activity , te is given by

te = (a + 4m + b)/6

Variance, V is given by

V = sqr((b-a)/6)


PERT

The expected time Te , represents the point on distribution where there is a 50-50 chance that the activity will be completed earlier or later than it.

a=3,b=5,c=13

Te= (3+4(5)+13)/6= 6 days

Variance is the measure of variability in the activity completion time:

V=sqr((13-3)/6)=sqr(1.67)= 2.78CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 63

PERT

The larger V, the less reliable Te, and the higher the likelihood that the activity will be completed much earlier or much later than Te.

More dispersed the distribution and greater the chance that the actual time will be significantly different from the expected time Te


PERT

Probability of finishing by a target completion date

The expected duration of a project - Te, is the sum of

expected activity times along the critical path.

Te = ∑ te

The variation in the project duration distribution is computed

as the sum of the variances of the activity durations along the

critical path

Vp = ∑ VCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 65


PERT EXAMPLE

NEAR CRITICAL PATHS

Putting too much emphasis on the critical path can lead

managers to ignore other paths that are near-critical or have

large variances, and which themselves could easily become

critical


DRAWBACKS OF PERT

Need to have considerable amount of historical data to

make time estimates

PERT gives overly optimistic results.

Beta distribution gives large errors in estimating Te.

Most of the errors in Te come from faulty time estimates not

Beta distribution.


CPM

Although PERT and CPM employ networks and use the concept of critical path, the methods have two points of divergence.

CPM is a deterministic approach.

CPM includes a mathematical procedure for estimating the trade-off between project duration and cost.

CPM features analysis of reallocation of resources from one job to another to achieve the greatest reduction in project duration for the least cost.


TIME-COST RELATIONSHIP FOR AN ACTIVITY



Tn- how long the activity will take under normal work conditions.

Also associated with normal pace is the normal cost, Cn, the price of doing the activity in normal time.

Usually normal pace is assumed to be the most efficient and thus least costly pace.

When maximum effort is applied, the duration so that activity can be completed in the shortest possible time, the activity is said to be crashed.



In our example, cost slope for the activity is $3K per week.

Thus, for each week the activity duration is reduced( sped

up) from the normal time of 8 weeks, the additional cost will

be $3K.

Completing the project 1 week earlier i.e. 7 weeks, would

increase the project cost by ($9K +$3K=$12K)



Basic rules:

Reducing the duration of an activity, increases the cost by

the cost-slope.

Increasing the cost of activity, reduces the duration of the

activity

Reduce the duration of activity with min value of cost slope.


TIME-COST RELATIONSHIP FOR AN

ACTIVITY(NUMERICAL PROBLEM)

Activity Normal Crash Cost Slope

Tn Cn Tc Cc_____________

A 9 10 6 16 2

B 8 9 5 18 3

C 5 7 4 8 1

D 8 9 6 19 5

E 7 7 3 15 2

F 5 5 5 5 _

G 5 8 2 23 5

$55K $104K




1

2

6

3

5

4



(NUMERICAL PROBLEM)Activity Normal Crush Cost Slope

Tn Cn Tc Cc_____________

A 9 10 6 16 2

B 8 9 5 18 3

C 5 7 4 8 1

D 8 9 6 19 5

E 7 7 3 15 2

F 5 5 5 5 _

G 5 8 2 23 5

$55K $104K CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 76



1

2

6

3

5

4




1

2

6

3

5

4






(NUMERICAL PROBLEM)


TIME-COST RELATIONSHIP FOR AN ACTIVITY(NUMERICAL

PROBLEM) USING CRASH TIMES

Observe that activities are plotted using values of TcCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 81


BASIS FOR COMPARISON PERT CPM

Meaning PERT is a project

management

technique, used to

manage uncertain

activities of a project.

CPM is a statistical

technique of project

management that

manages well defined

activities of a project.

What is it? A technique of planning

and control of time.

A method to control cost

and time.

Orientation Event-oriented Activity-oriented

Evolution Evolved as Research &

Development project

Evolved as Construction

project


BASIS FOR COMPARISON PERT CPM

Model Probabilistic Model Deterministic Model

Focuses on Time Time-cost trade-off

Estimates Three time estimates One time estimate

Appropriate for High precision time

estimate

Reasonable time

estimate

Critical and Non-critical

activities

No differentiation Differentiated

Suitable for Research and

Development Project

Non-research projects like

civil construction, ship

building etc.

Crashing concept Not Applicable Applicable

EARNED VALUE ANALYSIS

Earned value gives a quantitative indication of project progress

It enables you to assess the “percent of completeness” of a project using

quantitative analysis rather than rely on a gut feeling

To determine earned value following steps are performed

1. Budgeted cost of work scheduled(BCWS) for each work task is

determined

2. Budget at Completion (BAC) which is summation of BCWS of all work

tasks is calculated

3. Budgeted cost of work performed(BCWP) is computed CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 84

EARNED VALUE EXAMPLE

Suppose you just signed a contract with a consulting firm called

Dewey, Cheatem, and Howe for developing an IS.

Project Budget, Schedule, Tasks:

$40,000

4 months

20 Tasks (evenly divided over 4 months)

$2,000 per task

5 tasks per month


INVOICE

End of Month 1

Dewey, Cheatem, & Howe

Amount Due: $8,000

Payment due immediately!

page 1 of 2


PLANNED BUDGET-BUDGETED COST OF WORK SCHEDULED

(BCWS)


BCWS ( PV) VERSUS ACWP(AC)


INVOICE

Dewey, Cheatem, & Howe

Work Completed for Month 1

Task A - $2,000

Task B - $3,000

Task C - $3,000

page 2 of 2


DEFINITIONS

Budgeted Cost of Work Scheduled (BCWS)

Planned expenditure cash flows based on the completion of tasks in

accordance with the project’s budget and schedule

Actual Cost of Work Performed (ACWP)

Actual Project Expense based on completed tasks

Earned Value or Budgeted Cost of Work Performed (BCWP)

The amount of the budget that we should have spent for a given amount

of work completedCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 90

BCWS VERSUS ACWP


COMPARISON OF BCWS, ACWP, AND

BUDGETED COST OF WORK PERFORMED (BCWP)


COST METRICS

Cost Variance (CV)-The difference between a task’s estimated cost and its actual

cost:

CV = BCWP – ACWP = EV – AC

Negative Value = over budget and/or behind schedule

Positive Value = under budget and/or ahead of schedule

Cost Performance Index (CPI)-percentage of work completed per dollar spent

CPI = BCWP ÷ ACWP = EV ÷ AC

ratio > 1 = ahead of schedule and/or under budget

ratio < 1 = behind schedule and/or over budgetCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 93

SCHEDULE METRICS

Schedule Variance (SV) – the difference in terms of cost between the

current progress and our originally scheduled progress

SV = BCWP – BCWS= EV – PV

Schedule Performance Index (SPI) – a ratio of the work performed to the

work scheduled.

SPI = BCWP ÷ BCWS= EV ÷ PV

ratio > 1 = ahead of schedule and/or under budget

ratio < 1 = behind schedule and/or over budget

Ratio = 1 = right on scheduleCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 94

EARNED VALUE METRICS

Budget At Completion (BAC)

Budget At Completion (BAC) is the sum of the budgets for each phase of

the project

i.e. total estimated expense for the project

Advantage of this approach is that the entire estimated amount (BAC)

need not be allocated at the time of project’s conception

This approach allows all concerned parties to look at the cost of each

phase of the project


EXAMPLE

Budget for the week: Purchase 4 Web servers at 50K each.

At the end of the Week: 3 servers purchased at 300K

Completed work = 3/4 = 75%

Calculations :

BCWS = PV = 4 * 50 = 200K

BCWP = EV = 3 * 50 = 200 * 0.75 = 150

ACWP = AC = 300

CV = EV - AC = 150 - 300 = -150

CPI = EV / AC = 150 / 300 = 0.50CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 96

EXAMPLE (CONTD….)

SV = EV – PV = 150 - 200 = -50

SPI = EV / PV = 150 / 200 = 0.75

BAC = BCWS = PV = 200



PERFORMANCE INDEX MONITORING


PROJECT RISKS


What can go wrong?

What is the likelihood?

What will the damage be?

What can we do about it?

RISK

What is risk? A potential problem – might or might not happen

• Two elements:

Chance or probability of occurrence

Consequent loss or impact

Can we avoid risks?

Some risks can be avoided

BUT, not all

We are concerned about

risks we run in the software development project


REACTIVE RISK MANAGEMENT

project team reacts to risks when they occur

mitigation—plan for additional resources in anticipation of fire fighting

fix on failure—resource are found and applied when the risk strikes

crisis management—failure does not respond to applied resources and

project is in jeopardy


PROACTIVE RISK MANAGEMENT

formal risk analysis is performed

organization corrects the root causes of risk

TQM concepts and statistical SQA

examining risk sources that lie beyond the bounds of the

software

developing the skill to manage change


KINDS OF RISK

Risk involves uncertainty and loss

Project risks threaten the project plan

impact is on delivery date, budget overrun

factors are project complexity, size, structural uncertainty

Technical risks threaten the quality, timeliness of the software to be produced

problems with the process of software development

problems with specification ambiguity & technical uncertainty

problems with leading edge developments


KINDS OF RISK

Business risks threaten the viability of the software to be built

building a system no one wants (market risk)

building a product that does not fit the strategy of the company

building a product that sales force does not understand how to sell

losing the support of senior management (management risk)

losing budgetary or personnel commitment (budget risk)

Risks can be known, predictable, or unpredictable


RISK MANAGEMENT PARADIGM


control

identify

analyze

plan

track

RISK

RISK IDENTIFICATION

It is a systematic attempt to specify threats to the project

plan.

2 distinct types of risks are:

1. Generic risks

2. Product specific risks

Although generic risks are important, usually the product-

specific risks cause most of the problems.


RISK IDENTIFICATION

Product size—risks associated with the overall size of the software to be built or modified.

Business impact—risks associated with constraints imposed by management or the marketplace.

Customer characteristics—risks associated with the sophistication of the customer and the developer's ability to communicate with the customer in a timely manner.

Process definition—risks associated with the degree to which the software process has been defined and is followed by the development organization.


RISK IDENTIFICATION

Development environment—risks associated with the availability and quality of the tools to be used to build the product.

Technology to be built—risks associated with the complexity of the system to be built and the "newness" of the technology that is packaged by the system.

Staff size and experience—risks associated with the overall technical and project experience of the software engineers who will do the work.

Risk identification can be done by asking a no. of questions relevant to each of the topics


ASSESSING OVERALL PROJECT RISK

A set of questions that are ordered by their relative importance to the success of a project,

such as:

Have top software and customer managers formally committed to support the project?

Are end-users enthusiastically committed to the project and the system/product to be

built?

Are requirements fully understood by the software engineering team and their

customers?

Have customers been involved fully in the definition of requirements?

Do end-users have realistic expectations?

The project risk degree is directly proportional to the number of negative responses to these

questionsCHAPTER 6 SLIDES BY: MS. SHREE JASWAL 110

PRODUCT SIZE RISK FACTORS Factors are:

Estimated size of the product in LOC or FP

Confidence in the estimate

Estimated size in number of programs, files, transactions

Size of database

Deviation in size of product from average of previous products

Number of users

Number of changes before and after delivery

Amount of reused software

If these quantities are large or deviate significantly from previous projects, then the risk is high

Or if numbers are similar but previous experience less than satisfactory, the risk is high.CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 111

CUSTOMER RELATED RISK FACTORS

Customer related factors are:

Have you worked with customer before?

Does the customer have a good idea of what is wanted?

Will the customer spend time determining the project scope?

Is the customer willing to establish rapid communication with the developer?

Is the customer willing to take part in reviews?

Is the customer technically sophisticated in the product area?

Is the customer willing to let you do your job?

Does the customer understand the software development process?

If the answer is “no” to any questions, there is potential risk to be investigated.CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 112

RISKS DUE TO PROCESS MATURITY

Questions that must be answered:

Have you established a common process framework?

Is it followed by project teams?

Do you have management support for software engineering ?

Do you have a proactive approach to SQA?

Do you conduct formal technical reviews?

Are CASE tools used for analysis, design and testing?

Are the tools integrated with one another?

Have document formats been established?

Answers of “no” identify weaknesses in the process and should be investigated.


TECHNOLOGY RISKS

Questions that must be answered:

Is the technology new to your organization?

Are new algorithms, I/O technology required?

Is new or unproven hardware involved?

Does the application interface with new software?

Is a specialized user interface required?

Is the application radically different?

Are you using new software engineering methods?

Are you using unconventional software developmentmethods, such as formal methods, AI-based approaches, artificial neural networks?

Are there significant performance constraints?

Is there doubt the functionality requested is "do-able?“

A “no” answer to these questions indicates weakness of technique and risk factors to be investigated.CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 114

RISK COMPONENTS

performance risk—the degree of uncertainty that the product will meet its requirements and be fit for its intended use.

cost risk—the degree of uncertainty that the project budget will be maintained.

support risk—the degree of uncertainty that the resultant software will be easy to correct, adapt, and enhance.

schedule risk—the degree of uncertainty that the project schedule will be maintained and that the product will be delivered on time.


RISK PROJECTION

Risk projection, also called risk estimation, attempts to rate each risk in two ways

the likelihood or probability that the risk is real

the consequences of the problems associated with the risk, should it occur.

The are four risk projection steps:

1. establish a scale that reflects the perceived likelihood of a risk

2. delineate the consequences of the risk

3. estimate the impact of the risk on the project and the product,

4. note the overall accuracy of the risk projection so that there will be no misunderstandings.


BUILDING A RISK TABLE


Risk Probability Impact RMMM

Risk

Mitigation

Monitoring

&

Management

BUILDING THE RISK TABLE

Estimate the probability of occurrence

Estimate the impact on the project on a scale of 1 to 4, where

1 = catastrophic impact on project success

2 = critical impact on project success

3 = marginal impact on project success

4 = negligible/low impact on project success

sort the table by probability and impact

RMMM contains a pointer to Risk mitigation, monitoring & management plan



Risk Category Probability Impact RMMM

Customer w ill change requirements PS 80% 2 3.1

Lack of training on tools DE 80% 3 3.2

less reuse than planned PS 70% 2

Size estimate may be signif icantly low PS 60% 2

Staff turnover w ill be high ST 60% 2

Delivery deadline w ill be tightened BU 50% 2

End users resist system BU 40% 3

Funding w ill be lost CU 40% 1

Technology w ill not meet expectations TE 30% 1

Staff inexperienced ST 30% 2

Large number of users than planned PS 30% 3

PS-Project size risk BU-business risk CU- customer etc

Impact 1-catastrophic 2-critical 3-marginal 4-negligible

RMMM- Risk Mitigation, Monitoring and Management Plan

RISK EXPOSURE (IMPACT)

The overall risk exposure, RE, is determined using the following relationship :

RE = P x C

where P is the probability of occurrence for a risk, and C is the cost to the project should the risk occur.

Compare RE for all risks to the cost estimate for the project.

If RE is greater than 50% of project cost than the project viability must be evaluated.


RISK EXPOSURE EXAMPLE

Risk identification. Only 70 percent of the software components scheduled for

reuse will, in fact, be integrated into the application. The remaining functionality

will have to be custom developed.

Risk probability. 80% (likely).

Risk impact. 60 reusable software components were planned. If only 70

percent can be used, 18 components would have to be developed from

scratch (in addition to other custom software that has been scheduled for

development). Since the average component is 100 LOC and local data

indicate that the software engineering cost for each LOC is $14.00, the overall

cost (impact) to develop the components would be 18 x 100 x 14 = $25,200.

Risk exposure. RE = 0.80 x 25,200 ~ $20,200.CHAPTER 6 SLIDES BY: MS. SHREE JASWAL 121

RISK MITIGATION, MONITORING, AND MANAGEMENT

Mitigation—how can we avoid the risk?

Monitoring—what factors can we track that will enable us to determine if the risk is becoming more or less likely?

Its 3 primary objectives are:

To assess whether predicted risks do in fact occur

To ensure that risk aversion steps defined for the risk are properly applied

To collect information for future risk analysis

Management—what contingency plans do we have if the risk becomes a reality?


RISK MITIGATION

Meet with current staff to determine causes of turnover

Mitigate those causes that are under our control before the project

starts

Once the project commences, assume turnover will occur & develop

techniques to ensure continuity when people leave

Organize project teams so that information about each development

activity is widely dispersed


RISK MITIGATION

Define documentation standards & establish mechanisms to

be sure that documents are developed in a timely manner

Conduct peer reviews of all work

Assign a backup staff member for every critical technologist


PARETO’S 80-20 RULE

For a large project 30 or 40 risks may be identified which will

require 3 to 7 risk management steps each which will make

risk management a project itself!

Hence the need of Pareto’s 80-20 rule to manage s/w risk

It states that 80% of overall project risk can be accounted for

by only 20% of the identified risks.


RMMM PLAN

RMMM Plan: documents all work performed as part of risk

analysis, and is used by the project manager as part of the

overall project plan

Alternatively, each risk is documented individually using a risk

information sheet (RIS)


RISK INFORMATION SHEET (RIS)


Risk Information Sheet

Risk ID: Date: Probability: Impact:

Description:

Refinement/context:

Mitigation/monitoring:

Management/contingency plan/trigger:

Current status:

Originator: Assigned:


Documents

Chapter 6: Project Scheduling and Risk Managementssjaswal.com/wp-content/uploads/2020/03/SEPM_chp6.pdf · #1 Chp 7: Network Scheduling and PDM #1 Chp 8:PERT, CPM, Resource Allocation