1. RMI Risk Masters, Inc.
PVRM - Project Value Risk Management
Focusing on making your most critical projects successful
June 2, 2013
© Copyright Risk Masters, Inc. 2013. All rights reserved.
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2. You have a very critical project
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• It is very visible…
– Within the firm
– To customers
• It is important to your company…
– To achieve its strategy
– To meet its financial goals
– To enhance its reputation
– To gain market share
– To maintain its lead over our competitors
• And it is important to you!
© Copyright Risk Masters, Inc. 2013. All rights reserved.
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3. Risks you face…
• Technology…
– You are using new
technologies for the first time
• Resources…
– Funding is limited
– Time is short
– Turnover is high
• Process…
– There are governance issues
– Requirements are difficult to
pin down
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• Internal Environment…
– Leadership is in transition
– Datacenters are being
consolidated
– Your network has been
hacked
• External Environment…
– A supplier’s network has been
hacked
– A supplier is struggling with
new technology
– A supplier has been acquired
And key opportunities may be overlooked
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4. Consequences you face…
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• Your company’s reputation will suffer
• Your customers will consider alternate suppliers
• Your company’s strategic and financial goals will not
be met
• An “OK solution” is just not good enough
• A “failed solution” just cannot happen
• Exceeding expectations is better than just meeting
them
• You are responsible for success, and anything less
than the best won’t do…
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5. RMI
Adding Value by Managing Risk
Expectations
• Success is more than simply achieving objectives – the baseline against
which managers are measured
• True success comes from a better product, ahead of schedule, below budget.
– This can only be achieved by anticipating the obstacles to success and
taking advantage of expected and unexpected opportunities
– Risk can never be eliminated but it can be managed to the benefit of the
project owners, the project team, and all who are involved
• Sooner
• Less costly
• Better
Managed Risk
Cost overrun
“Pay as you go” Risk Management
Resource
shortage
Predicted
project end
Delivery delay
Time
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6. For these critical projects…
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• Project Value Risk Management (“PVRM”) will…
– Enhance the quality of the product that is delivered
– Mitigate the risks that threaten the success of the project
– Reduce the overall actual duration and costs of the
project
– Empower you to be better informed about the real status
of the project, and therefore more able to influence its
outcome
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7. How PVRM Works…
RMI
• An experienced IT Leader is assigned
by the project’s Sponsors as the
“Project Value Risk Consultant”
(PVRC)
• The PVRC works with the project
team to jointly identify risks and
opportunities, develop plans to
mitigate the risks, and assess the value
and impact of the opportunities.
• Risks are tracked on a Risk View Spreadsheet that enumerates and
categorizes the risks, assesses their impact, tracks mitigation and status, and
calculates the chance of impact (Appendix A).
– With this, Risks can automatically be grouped, analyzed and studied
• The PVRC works with the project team throughout the lifecycle of the
project to develop and present to the Executive Sponsors a periodic report of
Risks, Opportunities and Actions Taken (Appendix B).
– The guidance of the Sponsors is then incorporated into the Project Plan
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8. More than Quality & Risk Management (QRM)
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• QRM is the systematic application
of quality management
policies, procedures and practices
to the tasks of
assessing, controlling, communicat
ing and reviewing risk
• QRM improves the project
throughout its lifecycle
• QRM involves four steps
– Risk Assessment
– Risk Control
– Risk Review
– Risk Communication
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9. More than project or risk management
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• Project Managers are tasked with managing risk, among other activities.
– PVRM supports this role through skill, experience, and having the
time/ability to focus on risk as a dedicated task
• A Project Manager is responsible for everything but is rarely expert in all
aspects of a project…including Risk Management
– PVRM empowers the Project Manager, as do Subject Matter Experts
• PVRM looks beyond organizational constraints to provide Senior
Management with a perspective independent of accountability for delivery
• PVRM gives the project customer and Senior Management a surrogate to
ensure their satisfaction, and more
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10. PVRM integrates QRM with Project Management
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• The skills and techniques of managing risk and opportunity…
– Become core competencies of the project team
– Enhance communications, escalation and awareness of risks and
opportunities
– Leverage the benefits of project management to perform the project
effectively
– Leverage the benefits of QRM to make the project better
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11. PVRM is a continuous and integral part of a project
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RMI
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12. PVRM helps anticipate problems
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• Adds risk identification, management and mitigation to the project workstream
• Changes how project risks and opportunities are managed
– The entire project team is engaged in actively identifying, managing
risks and opportunities
– Risks and opportunities are identified and assessed early, tracked
effectively and resources are focused efficiently and effectively
mitigating the risks and realizing the opportunities
– Senior Management and the project team become aware of key risks
before the risks become self-evident or otherwise impact the project
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12

13. PVRM transforms how the project is delivered
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• The project can be more focused on opportunities…
– Addressing activities to make the project more successful
– Mitigating or even avoiding risks that might lead to significant time and
cost overruns
• While spending less time on obstacles
– Reacting to the unexpected
– Invoking contingency plans, time and budget
• Senior Management is better informed of these opportunities and roadblocks
– Enabling you to bring experience and appropriate resources to improve
the outcomes
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14. RMI
PVRM can help eliminate cost overruns
• Every project has a planned contingency
• But there are also hidden and unplanned contingencies that PVRM can
manage in order to reduce your costs, eliminate duplicative efforts, and
mitigate the chance overruns
Opportunity Area
Typical Cost, as
“% of Project”
Opportunity
Planned Contingency
20%
Cost/Time avoidance
Hidden contingency embedded in
schedules, resource plans and budget
20%
Cost/Time recovery
Unplanned Rework, Overruns and Delays
20%
Cost/Time avoidance
Total
60%
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15. PVRM can help reduce project duration
RMI
• Projects that fall behind schedule usually do so because of
– Inexperience and lack of qualified staff
– Staff turnover
– Insufficient lead time for critical resources
– Overly optimistic estimates of costs, workloads and task durations
– Poor internal and external communications and escalation
– A lack of understanding of the customer’s actual requirements
• These are all risks that can be anticipated and dealt with
– If senior, experienced leadership is engaged on an on-going basis
throughout the project life cycle
– PVRM leverages retained experience and seniority to extend the reach
of Senior Managers who cannot or will not give their time and energy to
the project
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16. PVRM can lead to higher quality project deliverables
RMI
• PVRM applies the engineering disciplines of Quality Management to major
projects
– Understanding buyer needs, beyond written specifications
– Bridging the communications gap between customers and developers
– Reducing – or eliminating – seemingly endless rounds of
disappointment and revisions
– Fostering collaboration internally within the project team and externally
with Subject Matter Experts
– Ensuring the polish, professionalism and “surprise and delight” of each
interim and final project deliverable
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17. RMI
PVRM can be used in many levels of a project
PVRM activities can be focused on areas of
greatest risk or opportunity, as needed
Relocate
Datacenter
• At the program level
• At the project level
Build New
Datacenter
Staff the
Datacenter
Migrate to
Datacenter
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Design, Permits
& Contracts
Relocate Staff
Consolidation
Build & Certify
• At the work-stream or
activity level
Hire Staff
Migration
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18. PVRM can be tailored to meet Management’s needs
RMI
The scope of a PVRM engagement can be…
• Limited to Senior Management Reporting
• Expanded to include Risk and Opportunity Monitoring
• Further expanded to include workshops to pro-actively improve the project
and its outcome
PVRM
Effort
Low
PVRM Scope
Reporting
Reporting and
Monitoring
Reporting, Monitoring
and Improvement
Periodic Reporting of Risks and Opportunities to Senior Management
Medium
High
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Risk Monitoring and Tracking for the Project
Workshops to Identify
Opportunities,
Eliminate Roadblocks,
and Enhance Value
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19. RMI
Typical PVRM involvement
PVRM Scope
PVRM Activities
Reporting
•
•
•
•
•
•
Conduct preliminary meetings with leadership and project team
Develop preliminary assessment
Review preliminary assessment with project team
Develop consensus
Document findings, consensus, issues and recommendations
Present to leadership and project team
Monitoring
•
•
•
•
Participate in project team meetings
Document tasks, timelines, contingencies, commitments, issues
Assess all items and provide feedback to project team
Update “living documents” and report periodically
Improvement
•
•
•
•
•
Work with project team to identify issues, opportunities and obstacles
Conduct meetings and facilitate dialogues to address identified items
Consult with leadership on findings and strategies
Document findings, conclusion and agreed upon actions
Incorporate into monitoring and reporting materials, above
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19

20. RMI
Appendix A: Risk Review Worksheet
Table 1: Risk Summary Report
This report quantifies the Fatal and High Risks and the probability of at least
one of each occurring
(The data below is calculated automatically from the Risk View shown in Table
2 on the next page)
Risk Severity
Risks that would have a FATAL impact
Risks that would have a HIGH impact
Total for Risks with a FATAL or HIGH impact
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Number of Risks Probability at Least
1 Open Risk Item
Closed Open
Occurs
0
0
0
2
1
3
91.0%
25.0%
93.3%
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21. RMI
Appendix A: Risk Review Worksheet
Table 2: Risk View of Project
Section 1 Enumerates and Categorizes Project Risks
#
1
2
3
4
5
6
7
8
Description of Risk (text)
Risk
Category
(Table)
Cause of Risk (text)
q
q
q
Requirements may be late
Teams unable to meet on a timely basis due to conflicts Process
Requirements may not reflect business needs
User team is junior and lacks leadership presence
Process
Hosting servers may be late
Vendor is back-ordered
Environmental
Development may complete late
One developer just resigned
Resource
Design may complete late
Team is new to designing for Tablets rather than PCs Technology
Tablet version may not deliver all functionality
First time team is using Tablet toolset
Technology
Screens may not render exactly as in requirements Tools for requirements are Generic
Technology
Business may cease to be viable
Pending legislation may obviate business need
Other
Businnes
Process or
Channel
(Table)
q
Requirements
Requirements
Deployment
Development
Design/Usability
Architecture
Design/Usability
Governance
Date
Added
mm/dd/yy
q
Owner
(name)
q
Date Last
Update
mm/dd/yy
q
Section 2 Assesses Impact and Tracks Mitigation and Status
Magnitude
#
Description of Risk (text)
q
Likelihood Liklihood
(Table)
Chance
Impact
(Table)
Cost Time Qual Fit
q
q
q
1 Requirements may be late
Medium
50%
Medium
Y
Y
2 Requirements may not reflect business needs
Very High
90%
Fatal
3 Hosting servers may be late
Low
25%
High
4 Development may complete late
Low
25%
Low
Y
Y
7 Screens may not render exactly as in requirements
8 Business may cease to be viable
q
Other (text)
Strategy (text)
Status (text)
q
q
q
Open
Close
Y
6 Tablet version may not deliver all functionality
q
Mitigation
Y
5 Design may complete late
q
Impact on Project Outcome
q
Open
Y
Y
Open
Open
Nil
0%
Low
Certain
100%
Medium
Y
Y
Open
Low
25%
Nil
Y
Y
Open
Very Low
10%
Fatal
Y
Open
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21

22. Appendix B: Periodic Risk Report (Example)
Risk Area Current Status and Assessment
Development
Progress
Development team has made good progress
and developed and launched into production
System 1.0. Team is preparing for production
release of System 1.1 with client-critical
enhancements
Program
Delivery
Status of program of this size and magnitude is
on track as if it were being delivered to a
client, with appropriate mitigation of risks,
knowledge of issues, and team maturity.
System
Operations &
Support
The solution will present deployment, adoption
and operational challenges to all Departments.
Procedures, instructions and Help Desk support
need to be further developed and discussed with
each Department. This is time critical for the
first Departments to deploy.
Nomenclature
& Branding
Confusion
Nomenclature and branding confusion exists
between new System and legacy one in use.
Need for greater clarity around how
methodology, behavior changes, and
technology deliver transformation.
© Copyright Risk Masters, Inc. 2013. All rights reserved.
RMI
Risk Assessment
Team turnover has been increasing. Risk Team is working on
mitigation strategies.
QA Tools for acceptance of System 1.1 require a vendor upgrade.
Some risk regarding stability and effectiveness of the upgraded
tools. Mitigation plan being developed
While a program of this size and magnitude will have a significant
number of challenges, issues, and risks, the program is being
professionally managed with good mitigation and management of
issues and risks. All of these issues and risks are normal for a
project at this stage of development. The team should continue to
manage as it has in the past and professionally execute as if the
products were being delivered to an external client.
The team has developed good documentation to support the
implementation from a technical infrastructure perspective, along
with high-level plans for an appropriate support structure. Given the
complexities of implementing a new system, the team should further
refine these plans, working with each Department to understand the
complications and intricacies of deployment. The team should
anticipate an increase in support needs following rollout
Continue reinforcing messages around the scope including
methodology, technology, and technology. Departments need to
recognize the broad scope to understand how each of the core
components work together to reinforce ongoing transformation of
business. Renaming of the transformation initiative will help avoid
the branding confusion.
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