Fundamentals of

Project Planning and

Management
Week 3: It’s a Risky World

 
Yael Grushka-Cockayne
Fundamentals of
Project Planning and Management
Week 1
Week 2 Week 3
Define and
Plan Improve Plan
Organize

Project Goal Project

The Three Scoping Assessing
Objectives Dependencies Risks and
and their Planning for
Priorities Schedule Ambiguity
Organization Trade-Offs
Sources of Uncertainty (Loch, DeMeyer, Pich 2006)

Foreseeable   Complexity   Unforeseen  

Uncertain/es     Uncertain/es  
Novel  
Variability   Project  Tasks  
Technology  

Alterna/ve   Novel  
Stakeholders  
Paths   Markets  
Sources of Uncertainty

Uncertainty   Risks   Ambiguity  

Novel  
Variability   Project  Tasks  
Technology  

Alterna/ve   Novel  
Stakeholders  
Paths   Markets  
 Plan to Match Risk (Loch, DeMeyer, Pich 2006)

Many
Interactions

Complexity
Few
Interactions

Variation Foreseeable events Unks Unks

Ambiguity
 Plan to Match Risk (Loch, DeMeyer, Pich 2006)

• Parallel trials
Many Planning and • Trial-and-Error
Interactions Control Control and Fast learning
Response
Complexity
Manage
Few Project Risk
Planning Residual
Interactions Management
Risk

Variation Foreseeable events Unks Unks

Ambiguity
Project Risk Management

Response Monitoring and

Identification Assessment
Planning Control

•Brainstorming, •Impact • Identify response • Update risk

checklists, strategy to each probabilities
•Likelihood
previous risk • Execute planned
projects, experts •Prioritized Risk • Assign strategy if events
Register responsibilities occur
•Risk Register
 Risk Assessment
Almost Certain (>75%)

Likely (50-75%)
Likelihood

Moderate (25-50%)

Unlikely (10-25%)

Rare (<10%)

Insignificant Minor Moderate Major Catastrophic

Impact
 Risk Assessment
Almost Certain (>75%)

Likely (50-75%)
Likelihood

Moderate (25-50%)

Unlikely (10-25%)

Rare (<10%)

Insignificant Minor Moderate Major Catastrophic

Impact
Probability Impact Matrix
Risk Score = Probability X Impact

0.8
0.04   0.08   0.16   0.32   0.64  
Probability

0.6
0.03   0.06   0.12   0.24   0.48  
0.4
0.02   0.04   0.08   0.16   0.32  
0.2
0.01   0.02   0.04   0.08   0.16  
0.05 0.1 0.2 0.4 0.8

Impact
Risk Register
ID   Risk  Area   Risk  Type   Probability   Impact    Timeline   Risk   Risk  Mi;ga;on  
Level   Level   Score   Plan/Owner  

1   OP01   Opera/ons   Schedule   4   4   1   16  

2   W01   Team   Scope   3   3   3   9  
3   E09   Engineering   Cost   3   3   2   9  
 Work Breakdown Structure

Startup  Project  

Crea/ve   Strategy   IT   Fundraising   Marke/ng   Sales   Finance   HR  

Project Duration: 12 Weeks
Duration
Activity # Description Predecessors
(Weeks)
1 Creative - 5
2 Strategy - 2
3 IT - 4
4 Fundraising 1 4
5 Marketing 1,2 2
6 Sales 1,2 5
7 Finance 5,6 2
8 HR 4,6 1
Schedule Risk Analysis
Min   Likely   Max  
Ac;vity  #   Descrip;on   Predecessors  
Dura;on   Dura;on   Dura;on  
1 Creative - 3 5 7
2 Strategy - 1 2 6
3 IT - 3 4 5
4 Fundraising 1 2 4 8
5 Marketing 1,2 1 2 6
6 Sales 1,2 1 5 7
7 Finance 5,6 1 2 7
8 HR 4,6 1 1 1
 Sales

Marketing

Project Duration
Schedule Scenarios

• Elicit ranges or three point duration estimates.

• Consider historical data.
• Ask multiple opinions.
• Start thinking of the overall project duration as a range not a
single number.
Schedule Risk Analysis
Min   Likely   Max  
Ac;vity  #   Descrip;on   Predecessors  
Dura;on   Dura;on   Dura;on  
1 Creative - 3 5 7
2 Strategy - 1 2 6
3 IT - 3 4 5
4 Fundraising 1 2 4 8
5 Marketing 1,2 1 2 6
6 Sales 1,2 1 5 7
7 Finance 5,6 1 2 7
8 HR 4,6 1 1 1
Risk Analysis
Changing Critical Path

• As task durations changes, critical path might

change.

• We will no longer ask – which tasks are on the critical

path?

But:
• How likely are tasks to be critical?
Criticality Index
• Probability that an activity is critical
Budget Risks

• Cost estimates are subject to variations.

• Foreseeable risks can cause the actual project cost to differ
from planned.
• Establish some contingency budget.
• Budget contingency should be allocated at a project not task
level (provides more flexibility for the project manager).
Simulation Results
Project Planning: Risk Analysis
Min   Likely   Max  
Ac;vity  #   Descrip;on   Predecessors  
Dura;on   Dura;on   Dura;on  
1 Creative - 3 5 7
2 Strategy - 1 2 6
3 IT - 3 4 5
4 Fundraising 1 2 4 8
5 Marketing 1,2 1 2 6
6 Sales 1,2 1 5 7
7 Finance 5,6 1 2 7
8 HR 4,6 1 1 1
Project Planning: Risk Analysis
Min   Likely   Max  
Ac;vity  #   Descrip;on   Predecessors  
Dura;on   Dura;on   Dura;on  
1 Creative - 3 5 7
2 Strategy - 1 2 6
3 IT - 3 4 5
4 Fundraising 1 2 4 8
5 Marketing 1,2 2 5 6
6 Sales 1,2 1 2 7
7 Finance 5,6 1 2 7
8 HR 4,6 1 1 1
Roadmap Instead of Plan

k   k  
k  
k  
k  
k   k  
k   k  
k  
k   k   k  
k  
k  

k  
k  
3  months  
6  months  
18  months  
Figure  credit:  Rachael  McConnell  
Trial and Error learning

k
k
k

k
k

k
k
k

Figure  credit:  Rachael  McConnell