Project risks can/cannot be eliminated if the project is carefully planned. Explain.
Project risks cannot be eliminated by careful project planning. A risk by definition is an event that might occur. If you are certain it will or will not occur, it isn’t a risk! However, through careful planning a project team can reduce the likelihood or impact of a risk.
The chances of risk events occurring and their respective costs increasing change over the project life cycle. What is the significance of this phenomenon to a project manager?
Project risk is highest during the early stages, when the project team is still flushing out the detail and the actual work is still in front. The amount of risk reduces as work is successfully completed and as the team gains a better understanding of the details. This is important for the project manager. The more information and clarity the PM can obtain early in the project the less risk or unknowns the PM will need to deal with later in the project. In contrast, some projects just don’t have the level of detail needed during the early planning. This should prompt the PM to add reserves to both schedule and budget to accommodate the risks associated with the lack of detailed information.
Explain the difference between budget reserves and management reserves.
I’ve seen different terms used depending on who you read. I use contingency reserves and management reserves. A contingency reserve is a time or money allocation assigned to an identified risk. The project manager typically has control over the contingency reserve. A management reserve is a separate fund set aside to address the unknown unknowns. The management reserve is typically controlled by the management team or the project sponsor.
How are the work breakdown structure and change control connected?
Assuming the project has an actual change control process in place, any approved changes trigger updates to the project management documents. This includes the scope of work, the project schedule (which can be build from the WBS), the project budget, communications documents, risk management plan, so on and so forth. However, if the project team does not follow a formal change control process there might be no connection between the two.
What are the likely outcomes if a change control process is not used? Why?
I think it depends on the project. For a simple project that will only take a few days and only involve a couple of people, the lack of a change control process might be irrelevant. However, for a larger project that has a longer duration and many people involved, the project could quickly spin out of control without some form of change control. I am just finishing a project in LA for a new showroom we just built for my company. We established a change process early and used it about 6 times through the project. Each time when we received a scope change request we evaluated the impact on the other areas of the project and provides that information for the sponsor to review. This gives the decision makers the information they need to make solid (or at least better informed) decisions. All six of the change requests were accepted. However, the key advantage to me as the PM and the team is that we were able to handle the changes in a structured manner.
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