SYNERGY Collaborating Project Management for High Performance Business Insight
Mar 2016, Issue 16
innovation
Image—By Kamalakanta777 - Own work, CC BY-SA 3.0
Message from the President
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From the editor’s desk
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Mind Mapping Opportunities along the Project Life Cycle
5
Project Portfolio Management: It is all about doing Right Projects at the
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By Maneesh Dutt
Right Time By Naveen Kataria and Ajaibir Singh
Behavioral Economics & Project Management
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Risk Management
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Crossword
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Chapter Events:
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By Sorabh Budget
By Jatinder Singh
By Le Roi
Lucknow Region 1st Meet Criticality of Stakeholder Management for Project Management Success AGM Program on Measurement of Productivity in Public Sector Projects Workshop on Social PM Agile Life Cycle & Estimation
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Message from the President Dear Chapter Members & Practitioners,
Pritam D. Gautam
Greetings, and wish you all enjoyed the festival of colors Holi! I would like to thank Mr. S. K. Sinha (PMI North India Chapter – RCA), who’s persistent efforts have given this opportunity to hold 2 region meeting at Lucknow, and Mr. BCK Mishra for successfully conducting two events in Dehradun. New Initiatives undertaken by chapter: 1. Chapter Event Videos on YouTube: We have started the process of recording and uploading chapter events videos on YouTube. Please visit https:// goo.gl/Rtysff to see these videos. More videos are being prepared, and it will be our endeavour to upload knowledge sessions of all the events conducted by chapter. 2. Revamping of Website: This year Vineet Sardana, our VP - Communications has taken the initiative to move chapter website to CMS based platform, and make it a responsive website. So, be ready for the surprise soon. We as Chapter Board strive on increasing member value, and would be glad to hear any new ideas, that you believe can help in increasing the member value of our chapter members. Please click http:// j.mp/1FjeyAp to share your ideas and suggestions for improvement. Also, if you think, you or your organization can help us in hosting an event of 70-100 ppl, please do so. Please visit http://j.mp/1FjeyAp to share your interest to host a chapter event in your organization. We are sure project management practitioners are gaining from the knowledge sharing sessions being conducted by the chapter. Warm Regards, Pritam D. Gautam President & CEO - PMI North India Chapter pritam@pminorthindia.org
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From the editor’s desk Hello PM Champions,
Prashant Malhotra
F
irstly wishing & hoping that everyone had a joyful & colorful Holi. Interesting aspect about Holi is that, it is now being celebrated by
different cultures across the world i.e. Russia, USA, South East Asia, South America, Germany, Holland to welcome Spring.
This issue of Synergy comprises of new trends in PM culture; understanding the connection of a project with a portfolio. It also comprises of one of the three part of how behaviors impact the projects. The chapter ran four events that was well attended by different PM experts & Subject Matter Experts across the industry. Apart from gaining knowledge, these events give a good opportunity for earning PDUs. One important factor for success in today’s world is dependent upon Networking and such events give you that opportunity to connect and leave an impact. Looking forward to meet you in next event.
With best regards Editor-in-Chief PMI North India Chapter
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By Maneesh Dutt Feedback: pminicmag@pminorthindia.org
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MIND MAPPING OPPORTUNITIES ALONG THE PROJECT LIFE CYCLE (Part 3)
(This is the final article in a three part series based on the book “Mind Maps for Effective Project Management” by Maneesh Dutt. In the last two articles we saw how Mind Maps could be effectively used during project initiation and execution. In this final part we explore how Mind Maps can help enable a better closure of the Project by using them for a Project pendency check. )
I
n previous two articles we have introduced a number of opportunities for Mind Mapping during project initiation and execution. In this final part of the article we look at Mind Mapping opportunities during project closure.
We are never the same person at the end of the project as we were at its beginning and being conscious about this change can magnify our learning manifold. Thus the focus of all the tools during this project closing phase is to enable a reflection on what went well and what could have been done better.
All projects are good as long as we have learnt something from it technical, soft skills or any other aspect. Thus irrespective of the reason for closing a project a formal exercise to capture the learnings from the project must be treated as a mandatory step at the end of every project. The Closure Meet is the cardinal meet for this phase of the project. However even before that the Project Manager needs to a bit of ground work to ensure a good Closure meet happens. Let’s see how a mind map can help better prepare a project manager for the closure meet.
The last phase of a project is similar to our sunset years. After the hectic phase of execution there is a Pre Closure Meet activities: The Project Manager slowdown followed with complete closure of all the pro- has the prime responsibility to ensure a good preparaject activities. The consumption, if any, of material re- tion before the closure meet. For unexpected project sources and the human effort is the least and eventually falling to zero on project closing. Few reasons why a formal closure to projects is a must:
a. The project resources, both human as well as material, need to be released for other projects. b. To formally capture what went well in the project. c. To understand from the team what can be improved further & release pent up feelings, if any. d. To capture creative ideas which need to be formally protected either through a Patent, trade secret or used for publicity through a publication.
Figure 1: Project Pendency Checklist Using Mind Maps
closure he needs to have full clarity on the “why” of the e. To recognize the effort of the team members and closure. Organizations practicing formal project closure normally do so using a project closure checklists to aid celebrate. the Project Manager. There are essentially two aspects f. Finally, as the brain has a general tendency toto address during closure. First to re-asses that there wards completeness thus when a project is formally are no (or minimal) pending items which could, from a closed it gives a sense of satisfaction and fulfillproject management perspective, disqualify the project ment. from being formally closed. The second and possibly Given these reasons it is not difficult to see the benefits more important focus of the checklist is to identify of a formal project closure meet for enhancing the learning’s from the project. The usual approach is to team maturity for handling future projects. get these filled in the form of a linear checklist however Feedback: pminicmag@pminorthindia.org
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this could be done more creatively using a Mind Maps.
As an example for the pending items the Mind Map template as shown in figure 1 can be used. The first branch questions if there are any pending project requirements for fulfillment.
available in the book “Mind Map for Effective Project Management”. Project Managers would do well to start experimenting with these templates or develop their own. Soon you may develop an addiction to this wonderful tool and kick-start your journey of creativity discovering your brain’s full potential.
In case there are some pending requirements and asA project allows creation to happen, a Mind Map allows suming they do not hinder seriously the project clocreativity to flow; a project gives a vision, a Mind Map sure, then actions are identified with who-what-when helps enhance the engagement towards that vision; a for achieving the requirements. The next branch identiproject gets identified with “work” a Mind Map with fies pending activities with reference to the projects “engagement”; a project allows for a unique creation, documentation. The records and documents from the a Mind Map brings out your uniqueness; and finally project are archived logically & in line with the compawhile a project has boundaries the only boundaries ny standard operating procedures. Financial closure is that a Mind Map has are the shores of your thoughts. another important aspect to be checked for, both with Thus a marriage of these subrespect to the customer & Mind Map is a simple creativity enhancing jects results in an unbounded the supplier. Thus ques“thinking” tool which is based on principles creativity in creation. tions like is the invoicing which help our brain learn and create bet- Mind Maps, the deceptively complete or have all the ter. payments been made to simple creativity enhancing the supplier? The project tool, can help transform your metrics with respect to Time, cost and quality are cap- traditional Project Management approach! tured on the next branch. The metrics reflect how well the project was managed. Invariably during projects there are new ideas generated inside the organization To read sample pages from the book “ Mind Maps for but the project team may have overlooked the same Effective Project Management” please visit: during the thick and thin of the project execution. The https://notionpress.com/read/mind-maps-for-effectiveproject closing phase is a good time to revisit the intel- project-management lectual property and /or ideas generated and assess if any of them need protection through patenting, publication, trade secret etc. This important intellectual property generated and the strategy associated with it is outlined in the next branch. The last branch focuses on celebration which includes both team as well as individual recognition and who-what-when planning for it. These different items would broadly covers all the closure aspects of the project which are more factual in nature whereas the softer aspects such as project learnings are best captured on a separate Mind Map. About the Author As this Mind Map is based more on facts and figures, Maneesh Dutt for most part the Project manager can fill in the details A B.Tech from IIT-D and a MBA from ENI University, for further sharing and inputs from the project team. Italy. He is a certified PMP, Certified Scrum Master Any experienced project manager will confess that pro- (CSM), Think Buzan Licensed Instructor (TLI) for Mind ject closure is not purely a left brained or linear activity Maps and Lead Auditor for OHSAS 18001 standards. but has to deal a lot more with the emotional side of He is Founder, Inlighten Consultancy which focuses on an individual and the team. Mind Maps are the perfect providing high value add workshops around Project whole brain thinking tool for group collaboration as Management & Mind Mapping. He has 20 years of exthey allow for synergistic interaction, ignite the collec- perience in the industry working with various organisative intelligence and lets the team work with a group tions across sectors. In his last assignment he was minded attitude while tapping on the uniqueness of Head, Business Excellence & Innovation for STMicroeevery member. lectronics India operations. He is also an author of the In addition to the Mind Maps presented in these three book “Mind Maps for Effective Project Managearticles there are a number of Mind Map templates ment”
A
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It is all about doing
Right Projects at Right Time
By Naveen Kataria & Ajaibir Singh Feedback: pminicmag@pminorthindia.org
Synergy Mar 2016, Page 8
I
ntroduction
Project Portfolio management is an approach to achieving strategic goals by: selecting, prioritizing, assessing, and managing projects, programs, and other related work based upon their alignment and contribution to the organization’s strategies and objectives. PPfM complements project and program management. It aims the organization in the right direction by selecting the best projects to do. The selected projects are turned over to program and project management, which is the engine that initiates and completes them successfully. Doing projects right, doing projects together, and doing the right projects: Project organizations must excel at all three to have long-term success.
select only those projects that meet certain criteria and to say “no” to the others. The resulting collection of projects is a focused, coordinated, and executable portfolio of projects that will achieve the goals of the organization. Project portfolio management (PPfM) is fundamentally different from project and program management. Project and Program management are about execution and delivery---doing projects right. In contrast, PPfM focuses on doing the right projects at the right time by selecting and managing projects as a portfolio of investments. It requires completely different techniques and perspectives. This following steps summarizes current techniques for selecting, prioritizing, and coordinating projects as a portfolio to increase value to an organization.
Project Management – “Do projects right”
The Portfolio Management Process
Program Management – “Do projects together”
Portfolio Management – “Do the right projects”.
Five primary steps of the portfolio management process. (Figure 3-3 in The Standard for Portfolio Management shows a more detailed breakdown of these steps (Project Management Institute, 2013, p. 34):
Good portfolio management increases business value by aligning projects with an organization’s strategic direction, making the best use of limited resources, and building synergies between projects. Unfortunately, organizations often do portfolio management poorly. As a result, they fail to deliver strategic results because they attempt the wrong projects or can’t say “no” to too many projects. Nearly all organizations have more project work to do than people and money to do the work. Often the management team has difficulty saying “no.” Instead, they try to do everything by cramming more work onto the calendars of already overworked project teams or by cutting corners during the project. Despite a heavy investment of people and money in projects, the organization still gets poor results because people are working on the wrong projects or on too many projects. Trying to do too much causes all projects to suffer from delays, cost overruns, or poor quality. Effective project organizations focus their limited resources on the best projects, declining to do projects that are good but not good enough. PPfM enables them to make and implement these tough project selection decisions. PPfM is a funnel (takes in all of the ideas for projects that the organization might do ) that connects strategic planning to the execution of projects, making the strategic objectives executable .These ideas may come from strategy, customer requests, regulatory requirements, or ideas from individual contributors. The purpose of the funnel is to Feedback: pminicmag@pminorthindia.org
1. Clarify business objectives 2. Capture and research requests and ideas 3. Select the best projects using defined differentiators that align, maximize, and balance
4. Validate portfolio feasibility and initiate projects 5.
Manage and monitor the portfolio
Above process identifies the most important differentiators between projects, such as Return On Investment, risk, efficiency, or strategic alignment. Then it uses these differentiators to select the high impact projects, clear out the clutter, and set priorities. Trade-offs are made in a disciplined way, rather than by allowing the loudest voice to win. The PPfM process accomplishes three things (Oltmann, 2006, p. 2): Aligns execution with strategy. Each selected project must play a role in carrying out the strategy of the organization. No more pet projects! . Maximizes the value of the entire portfolio of projects to get the “most bang for the buck.” Taken together, the projects must have a high return on the organization’s investment. This may be in terms of dollars or other measures that are important to the organization. Balances the portfolio. Makes sure that it is not lopsided---for example, by being too risky or too focused on short-term results
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The following sections describe each step in more de- 2001, p. 46). tail. Valuation by scoring takes a different approach. In PPfM Step 1: Clarify Business Objectives many fields, researchers understand which characteristics of projects correlate with success. Scoring uses First, Aim the in the Right Direction these predicting factors as the criteria for differentiatBefore selecting the right projects, you must know ing between candidate projects. For example, Cooper where you want to go! ( Cooper, Greenberg, & Zuk, 2002, p. 47) lists three Similarly, you must be able to clearly state your organ- factors in new product development that correlate well ization’s strategic objectives before starting portfolio with eventual product success: management. This is often the first obstacle people run into when trying to implement PPfM. If you can’t determine the strategic objectives, stop working on portfolio management and fix that problem first.
Decide What Value Means
Portfolio management requires a systematic method of differentiating between candidate projects to determine which ones are “best.” What does “best” mean? The definition is unique to every organization. For example, one company might value environmental stewardship most highly, while another places top priority on ROI. Select a critical few criteria that will measure each project’s true value to your unique organization. Rigorously limit the number of criteria to four to ten to keep the amount of data manageable.
Unique, differentiated product that offers superior value to customers Product is targeted at an attractive market Product and project leverages internal company strengths Regardless of theoretical superiority, use a valuation method that fits with the executive decision making style in your organization. Some companies are more comfortable with financial analysis, while others prefer the framework for voting and discussion that scoring brings. Yet others combine financial and scoring criteria into a single system. Most of my clients prefer at least some scoring criteria in their evaluation process. Using either approach is better than having no structured evaluation criteria at all!
The right criteria are critical, because poor criteria PPfM Step 2: Capture and Research will cause you to select the wrong projects. There are two primary approaches to defining valuation Step 1 of the PPfM process builds a foundation for creating a portfolio. It requires all of the decision criteria: financial and scoring. makers to agree on strategic objectives and the Financial vital few valuation criteria, so initially it can be diffi Payback period cult and time consuming. Fortunately, only periodic review and update is needed after that. Net present value (NPV)
Bang for Buck (BBI)• Market attractiveness
Scoring Alignment to strategy Product and competitive advantage Technical feasibility Leverage of core competencies
Step 2 builds on this foundation by starting to build a specific portfolio. The first two steps are research:
The financial approach to valuation uses quantitative monetary measures, such as net present value, to define the differences between projects. Unfortunately, a financial approach may mislead portfolio managers to mistake precision for accuracy.
Create an inventory of candidate projects for the portfolio. Include in-progress projects as well as ideas for new projects. Sources can include customer requests, initiatives from strategic planning, regulatory requirements, and good ideas from employees and project managers. Gather data for each candidate project on the inventory. These include data that will allow you to rate the projects against the criteria that you have developed. It may also include early estimates of dependencies and high-level resource requirements.
Robert Cooper says, inspite of the fact that financial methods are theoretically correct, the most rigorous of all methods, and the most popular of all tools, of all the methods we studied in a large sample survey of At first, identifying and gathering data on all of the practices versus results, they yielded the poorest re- candidate projects may be a major challenge, results on just about every portfolio performance metric. quiring much investigation and interviewing. As The sophistication of these methods far exceeds the your organization matures at PPfM, this step will quality of the data! (Cooper, Edgett, & Kleinschmidt, get faster and easier. Feedback: pminicmag@pminorthindia.org
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PPfM Step 3: Select the Best Projects
Maximize the Portfolio’s Value With project data from Step 2 in hand, determine which combination of projects creates the highest total value for the portfolio, given high-level resource constraints. This is called portfolio maximization. First, rate each candidate project against the valuation criteria to compute the value of each project. This will be either a weighted score or a financial value. Next, rank the candidates from highest to lowest value. Starting with the highest value projects, allocate available resources until they are exhausted. Draw the “cut line” at this point, creating a tentative portfolio. The portfolio is tentative because no valuation criteria, no matter how good, can capture all of the subtleties that must go into real-world funding decisions. The cut line becomes a starting point for vigorous discussion among the members of the portfolio management team, as they use their real- world experience and judgment to tune the tentative portfolio. The process, criteria, and data form a framework that guides this discussion, instead of selecting projects by “loudest voice wins.”
Balance the Portfolio A maximized portfolio may be out of balance in important ways. For example, it may have an inappropriate risk profile, subjecting the organization to either too much or too little risk. According to Cooper (Cooper, Edgett, & Kleinschmidt, 2001, p. 73), balance is the second weakest element in portfolio construction, after “too many projects.” Use balance displays to check the balance of a tentative portfolio across important dimensions. Prepare bubble chart that displays risk versus reward in a small portfolio, where each bubble represents a project. Some popular balance displays are: Risk versus reward Strategy---tactical range Market or product-line segmentation Distribution of time to completion or time to profit PPfM Step 4: Validate and Initiate
To keep the amount of data manageable, a portfolio is initially constructed at high level of abstraction. The resulting portfolio ignores some important constraints and details about its projects. For example, a portfolio’s demand for resources often appears feasible when analyzed at the FTE (full-time equivalents) level. Feedback: pminicmag@pminorthindia.org
However, this masks bottlenecks caused by limited availability of certain skill sets.Thus, a portfolio may not be feasible to execute even though it is maximized and balanced. Before starting execution, validate that a tentative portfolio appears to be feasible. Team up with the people who will run the projects and thus know them best---generally line and project managers, perhaps coordinated by the project management office (PMO). When looking at portfolio feasibility, consider the following: Inter-project dependencies Knowledge and capabilities of the performing
organizations
Time-phased resource demand and availability,
including considerations of key skill sets Budgetary constraints
PPfM Step 5: Manage and Monitor After validating the portfolio, put it into execution. Initiate the new projects and programs, inserting them into the project management system. Although the project manager is responsible for day-to-day execution of each project, the portfolio manager’s job continues. He or she monitors the execution of the portfolio and its component projects, ensuring that it continues to meet its original design objectives. In this step, the portfolio manager works closely with the project managers or the PMO to: Gather information to monitor the performance of the portfolio Identify and resolve issues within the portfolio, including reallocating resources Steer the portfolio, making changes when necessary to rescue, re-scope, cancel, or introduce new projects Manage escalations and midcycle requests for changes to portfolio composition---for example, adding new projects. Initiate a full portfolio review and reconstruction on a scheduled basis, such as quarterly or annually. Portfolio Governance This Article focuses on the process and tools for PPfM. However, knowing the process and tools is not enough. PPfM must have a governance framework. Governance specifies who has responsibilities in each process step and how these individuals will work together to make good decisions about proSynergy Mar 2016, Page
jects. PPfM is about sharing power and decision making at very senior management levels, so clear governance is vital. Conclusion
About the Author(s)
Naveen Kataria
Following are attributes of a good portfolio management system:
Naveen Kataria is retired from India Navy and currently work Encourages structured investment decision making ing as Transition & Transforbased on effective criteria mation Leader at IBM India for Helps decision makers make hard trade-offs, includ- over 5 years complimented by ing saying “no” to some projects M.Tech from IIT Kharagpur , PgDBA from IIFT Delhi & certification from PMI.. He has over 27 years of Ensures that strategy and execution are aligned professional experience of providing Leadership and Backed by strong, long-term executive participation Is an on-going process with frequent looks at the Excellence in Delivery. He has been instrumental in overall direction to the Transition teams & responsi“big picture” ble for execution of diverse range of large and com Favors process simplicity and transparency plex Transition projects for key outsourcing contracts Strongly tied to governance in.linkedin.com/pub/naveen-kataria/8/807/195/ Organizations that combine effective project portfolio management with good project management achieve these results:
Faster time to market
Higher productivity
Less chaos
Strategy that actually gets implemented
The next time that you hear the complaint “We’re spread too thin,” look below the surface. Are your projects unfocused and misaligned? Do too many “good” projects compete for too few resources? Combining project portfolio management with project management will help you “do the right projects and do them right.”
Ajaibir Singh Ajaibir Singh is working as Delivery Portfolio Manager in IBM India and has 23 years of experience . He has served as the catalyst for successful completion of Program, Project and Technical Services initiatives in IT / ITES /Construction Industry, complimented by PMI Certifications. in.linkedin.com/pub/ajaibir-singh/4/498/88
References 1. Carroll, L.
(1920 ed.). Alice’s Adventures in Wonderland. New York: The Macmillan Com-
pany. 2. Cooper, R., Edgett, S., & Kleinschmidt, E. (2001). Portfolio management for new products (2nd ed.). Cambridge, MA: Perseus Publishing. 3. Cooper, J., Greenberg, D., & Zuk, J. (2002).
Reshaping the funnel: Making innovation more profitable for high-tech manufacturers. 4. Oltmann, J. (2007, May). Portfolio management of projects. Class, Center for Profession-
al Development, Oregon Health and Science University, Portland, Oregon. 5. Project Management Institute. (2013). The standard for portfolio management. Newtown Square, PA: Project Management Institute.
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BEHAVIORAL ECONOMICS & PROJECT
MANAGEMENT By Sorabh Bajaj
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PART #1
PLANNING FALLACY A glance at the PMI’s annual publication- PMI Pulse indicates that % of Projects meetings their stated objectives has averaged around 63-64% for the last 5 years. With each edition of PMI Pulse, Project Managers are encouraged to implement Project Management methodology and its tools to manage projects better. But that has not helped move the needle forward on the % of Projects meeting their stated objectives.
So, I decided to explore literature outside of PMBoK to define the problem better. This research led me to learn more about cognitive psychology & behavioural economics and how research in this area can help us manage projects better. Through this section of Synergy, my endeavour is to share these concepts during various editions of 2016. For this edition I chose to discuss the concept of ‘Planning Fallacy” pioneered by Daniel Kahneman, Noble Laureate in Economics 2005. Projects running behind schedule can be found everywhere and one of the reasons could be overly optimistic forecast of the outcome of the project. Daniel Kahneman coined the term Feedback: pminicmag@pminorthindia.org
planning fallacy to describe plans and forecasts that
Are unrealistically close to best-case scenarios Could be improved by consulting statistics of similar cases Some of the examples of the planning fallacy from across the world: A 2005 study examined rail projects undertaken worldwide between 1969 and 1998. In more than 90% of the cases, the number of passengers projected to use the system was overestimated. Even though these passenger shortfalls were widely publicized, forecasts did not improve over thirty years; on average, planners overestimated how many people would use the new rail projects by 106%, and the average cost overrun was 45%. As more
evidence accumulated, the experts did not become more reliant on it. In 2002, a survey pf American homeowners who had remodelled their kitchens found that, on average, they had expected the job to cost USD 18,658; in fact, they ended up paying an average of USD 38, 769.
Errors in the initial plan are not always innocent. The authors of overly optimistic plans are often driven by the desire to get the plan approved by their seniors or client. The desire to make an optimistic plan is also supported by the knowledge that projects are rarely abandoned unfinished merely because of overruns in costs or completion times. In such cases, the greatest Synergy Mar 2016, Page
responsibility for avoiding planning fallacy lies with Project Sponsors. If they do not recognize the need for an outside view, they commit a planning fallacy.
The planning fallacy can be summarized as phenomenon in which predictions about how much time will be required to complete a task display an optimism bias i.e. underestimate the time needed. This phenomenon occurs regardless of individual’s knowledge that past tasks of a similar nature have taken longer to complete than generally planned. This bias not only affects predictions of one’s own tasks but also the predictions made for tasks to be completed by someone else. Equipped with this knowledge, we can reduce the bias in project plans by adopting an objective approach. In the next article we will learn more about mitigating the planning fallacy.
Just a thought…..
About the Author Sorabh Bajaj Sorabh Bajaj leads the Business Excellence function at TAS-AGT Systems Limited (A Tata Advanced Systems Company). Sorabh holds an MBA from Ohio University, USA. He is also a certified Project Management Professional (PMP®) and Lean Six Sigma Black Belt. He brings to table vast experience as a change agent devising innovative business strategies and process improvements from ideation to implementation for B2B technology companies and large financial services organisations.
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By Jatinder Singh
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RISK MANAGEMENT From the beginning of civilization, human is associated with the risk. We always tried to find out the different ways to cope with the existing risk. Earlier, risk management was mostly used by the Process and Chemical industries. These industries try to eliminate the worse impact of the process design on environment, men, machine and other material. Till today these industries do the HASOP analysis to get rid of process related risk. As times changed, human became wiser. We are heading towards more sophisticated world. Everyday we are facing bigger challenges than the day before. Simultaneously, the businesses are becoming more complicated to keep up with changes & competition. The days are gone when handling projects was so easy. Today it is a need of time to look into our ways of working and become more professional. That is the reason, almost all of us are taking about risk and probable solutions to get rid of them. Project Management is the process of dealing with complex situations and coming out with most economical and optimum solution. To reduce the uncertainty of the success of the project, almost all organizations are putting extra effort on finding out the various risks involved in particular project and ways to eliminate them. Today risk management has become an important and integral part of project management. Before discussing about the “RISK MANAGEMENT” let us understand what is the meaning of RISK. As per ISO 31000 (2009) / ISO Guide 73:2002, RISK means the effect of uncertainty on the objectives. Here uncertainties include the events which may or may not happen, and uncertainties caused by ignorance or lack of information. It also includes both negative and positive impacts on the objectives. PMBOK Guide (5th Edition) defines Project Risk as an
uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost, quality, customer Satisfaction and time. So, RISK statement is having three important key words, UNCERTAIN EVENTS, IF THEY OCCUR and POSITIVE or NEGATIVE EFFECT. Any event (RISK) whose impact is positive, is recognized as an Opportunity and those which impact negatively are called Threats. The third key part “IF IT OCCURS”, tells that if a risk that has been forecasted / anticipated actually occurs, it is no longer a risk, it is an ISSUE. Proper risk management will not only allow us to identify the weaknesses and threats to the project but it also provides the information about Project’s strength and opportunities. Today it is already recognized by most of the successful project managers that the RISK MANAGEMENT is most important tool to handle risks so that they can identify, mitigate or avoid problems when occurred. The reason for the increased importance and interest is very obvious. Today, virtually all of the risk events impacting projects are foreseeable and thus manageable. For many organizations, the investment in enterprise risk management is the direct result of experiencing one or more avoidable significant business / project failures. So, today project success depends on striking a balance between enhancing profits and managing risk and the investment for risk management is now top of mind for most of the business leaders. Project risk management has been practiced for years as an important activity. Unfortunately, examples of enterprise risk management failures exist in large numbers. Most of these failures occur when risk management is done for defensive purposes as their comprehensive risk management focus on cost savings and efficiencies and thus fail to make a compelling case for adding value.
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Synergy Mar 2016, Page
of the other companies). Techniques used includes for identification and forecasting of emerging risks (96% of leaders vs. 59% non leaders), horizon scanning and early warning indicators (81% of leaders vs. 33% non leaders), scenario planning (77% of leaders vs. 33% non leaders), stress testing (75% of leaders vs. 30% non leaders) and building organizational resilience to risk (88% of leaders vs. 42% non leaders).
As said earlier, projects are getting complicated with every single day passing by, and accordingly the risk too. It is assumed that putting emphasis on risk management slow downs your project but a new report from PwC says that the Organizations who put a premium on risk management are seeing better growth and increased profit margins. [PricewaterhouseCoopers (PwC) is
a multinational professional services network. It is the largest professional services firm in the world, and is one of the Big Four auditors, along with Deloitte, EY and KPMG.]
Financial service organizations lead bushiness in other sectors by using various risk management tools and techniques. More than 60% of the organizations today, identify and forecast risk.
According to the latest survey done by PwC (2015), it found that the organizations / companies that were involving risk management in the business at the strategic level for past three years 55% recorded increased profit margins compared to 43% of Today, organizations have other organizations (not pracfocus: ticing risk management) and 41% achieved an annual profit margin of more than 10% over 31% of other organizations.
Risk Management Leaders have a strategic understanding of their risk appetite and are willing to take risks: According to the report, with a thorough understanding of potential risks, risk management leaders actually have a very high appetite for risk and are more confident about being able to manage risks. About 90% of the risk leaders say that they are increasingly taking a risk enabled approach to growth and success of the project. Based on their confidence, risk management leaders organizations are more likely to have a high or very high risk appetite in several areas.
a renewed
“Manage the Risk”.
PwC identifies four key strengths that distinguished Risk management Leaders: Risk Management Leaders understand how risks are interconnected and impact the Projects / Business: The study shows that more than 70% of the Risk management Leaders says that they can figure out how risks are interconnected and cascade, as compared with less than 23% of non leaders in risk management. This provides them a clear and realistic understanding for execution, operational and The PwC report recommended five strategies to better market opportunists for that project. anticipate and prepare for risk events, identify acceptable risks, and generate higher returns:
Risk Management Leaders are more aligned across business units: 90% of the risk management leaders (compared with 36% of non leaders) have risk management program that are highly aligned with the organization’s strategic planning process. The report says that Risk Leaders also demonstrate greater cross functional alignment and are much more likely involved to risk analysis in the decision making process. This provides them great speed, accuracy and agility in neutralizing threats and seizing opportunities.
Risk Management Leaders apply more sophisticated techniques: PwC report found that 46% of Risk Management Leaders spend more time in calculating and preparing for risk than reacting to it (21% Feedback: pminicmag@pminorthindia.org
Create a risk-appetite framework and take an aggregated view of risk. Monitor key business risks through dashboards and a common governance, risk, and compliance technology platform. Build a programme around expanding and emerging business risk, such as third-party risk and the digital frontier. Continuously strengthen your second and third lines of defense. Partner with a risk-management provider to close the gap on internal competencies. Synergy Mar 2016, Page
ority base.
Due to the instability of world economy, most of the businesses have transformed into risk averse organizations. Organizations that were operating smoothly with the help of forecasts and projections now refrain from making business judgments. Today, organizations have a renewed focus: “Manage the Risk”.
RESPONSIBILITY AND ACCOUNTABILITY: The last step is assigning an owner for each risk on the master risk list by using responsibility assignment matrix. At the end, the project manager is solely accountable to the project sponsor for all the plans and actions related to the risks and project.
Risk is the main cause of uncertainty for any project or organization. So, it is the need of time to focus more on identifying risks and managing them in a more effective way. The ability to manage risk, will help organizations and Project managers act more confidently on future strategic decisions.
Risk Management plan plays very critical role in reducing down the unexpected project risks. A good Risk management plan decreases more than 80% problems on a project. Combined with a world class project management methodology, a good risk management plan Risk Management is becoming an important tool for can be essential in diminishing unexpected project organization it helps by possibly defining organization’s risks. objectives for the future. Recently, many businesses have added risk management departments. The role of this department is to identify risks, come up with strateCONCLUSION: Project Managers work is not to focus gies to guard these risks, to execute these strategies, on dealing with problems and RISK but he should focus and to motivate all members of the organization to coon preventing them. Risk management process helps operate in these strategies. to prevent many problems and make other problems Most of these Risk management departments are using less likely to occur or to reduce their impact. Efficient Risk management also helps to increase the probability following six steps to create Risk management plan. and / or impact of opportunities (Positive Risk). Risk RISK IDENTIFICTION AND RISK REGISTER: All Management activities are an integral part of Project stakeholders are assembled and all possible project manager’s daily work. It can affect the efficiency and risks are identified. Further various historical data, effectiveness of the project. Up to 90% of the threats reports, project documents are also referred. All identified and investigated can be eliminated. possible risks are than registered in the Risk Register. References: RISK ANALYSIS METHODS: Every project is faced with various risks. There is no 100% certainty that PwC Survey “Risk in review: Decoding uncertainty. risks will not occur. The risks that are identified in Delivering value. step 1, have to be analyzed for their probability and CGMA magazine at CGMA.org impact using various tools and techniques.
IDENTIFY RISK TRIGGERS: Divide the risk management planning team into subgroup and assign segments of the master risk list to each subgroup. The job of these subgroups is to identify and register triggers and warning signs, for each risk on its segment of the master risk list.
RISK RESOLUTION IDEAS: Here, individual subgroup identifies and document preventive proactive actions for the THREATS and enhancement steps for the OPPORTUNITIES.
RISK RESOLUTION ACTION PLAN: Based on the data of step 4, project manager makes decision for plan of action for the individual risk. The Risk having high Probability- Impact value is handled on priFeedback: pminicmag@pminorthindia.org
About the Author Jatinder Singh is an Electrical Engineer from Punjab University, obtained PGDOM and MBA while in job. Having more than 2 decade PMC experience with worldwide multinational organizations (SAUKEM-India, PDO-Oman, JGC-Qatar, STATOILHYDRO-Iran, NOC-Libya) in Oil & Gas sector. Presently working as Lead Electrical Engineer and Group leader for PMC at Petro Energy E&C co. Ltd., Sudan. Won several prizes in Painting, Photography and Safety. Synergy Mar 2016, Page
By Le Roi Feedback: pminicmag@pminorthindia.org
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ACROSS 2
Unhappy before Indian perhaps finds a strategy to capture uncontested market space (4,5)
5
Innovative method of project completion using iterations with leg crossed in Air India (5)
6
Natural liking for drawing leads to a business tool to organize data and ideas (8,7) Confused singed lean ruler discovers innovative problem solving strategy based on cognitive activities (6,8) Cyclo-genetic holy elf undergoes mutation to describe the commercial gain of a product (10,9)
10 11 12 13 14
Noah Mamet transformed to find a moment of sudden discovery (3,6) Build-up revolution for Gartner’s methodology to present maturity, adoption and application of technologies (4,5) Premature publicity choosers to reach people who use a new technology as soon as it is available (5,8)
DOWN 1 3 4
Spear pierces poor confused scared orc to generate a performance measure in strategic planning (8,9) Sufi if on curved design is able to define spread of new ideas (9,5)
7 8
Amphibian in convoluted gape devoured by ling yielding process to skip less efficient technologies to new ones (12) Bar applause for revolution (10) Hide at 10 North Avenue to conceal a method of idea generation (8)
9
Draw connection query following mental balance to obtain a technique to organize information (4,7)
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Lucknow Region 1st Meet 1/2 day professional meet conducted by PMI North India Chapter-Lucknow Region
Chapter Event (1/6) 7th Nov 2015 Project Management Institute (PMI) Lucknow Region 1st meeting was held on 7th Nov 2015, for approximate 2 hours. Nine participants from different domain such as IT, Manufacturing, Medical, Accounting profession were present. Participants from IIFCO, HCL, HAL, TTK and PCF were enthusiastic to join the meeting. Some of the participants were PMP certified. Meeting started with Welcome Address of President & CEO of PMI North India Chapter. Networking among PMI Professionals in this region was a refreshing experience. Overview of Project Management along with PMI and its role was discussed by S.K.Sinha,RCA, UP. who helped us organized this meet. PMI membership special offer given by PMI, USA and Knowledge Modules was also discussed among PM professionals.
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Criticality of Stakeholder Management for Project Management Success 1/2 day Practitioner’s event by BRIDGE School of Management and PMI North India Chapter
Chapter Event (2/6) 11th Dec 2015 CRITICAL CATALYST TO TRANSFORMING INDIA: PROJECT MANAGEMENT Stakeholder management is a critical factor for pro ject success across all sectors, especially in today’s challenging business environments. To evangelize and create a sustained conversation around the need for project management skills, Bridge School partners with PMI North India for a symposium on Stakeholder Management.
Rohin Kapoor Director, Education Sector, Deloitte Vijay KR – Director Infrastructure & Real Estate, PWC
On December 11, 2015, Bridge School and PMI North India held a joint edition of BRIDGE Briefings on the Criticality of Stakeholder Management for Project Management Success. Here are some glimpses and learnings from the event Panelists:
Moderator: Soumen Chatterjee – Global Lead, Strategic People Initiatives, HCL
Ajay Ranjan Mishra – Director Technology & IR, Ericsson
Anil Gupta – President & Head Cornerstone, (Former Country Head, Honeywell, Reliance ADAG)
Arun Bharadwaj –Director Engineering ,Kohler India
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PMI North India Chapter — AGM 1/2 day Annual General Meet conducted by PMI North India Chapter
Chapter Event (3/6) 19th Dec 2015 The AGM of OMI North India Chapter was held on 19th Dec 2016 at Clarens Hotel in Gurgaon. The PMI North India Chapter Board felicited the chapter members who had been PMI North India Chapter member since last 7 year without any break. The day was concluded by networking lunch. Agenda
Activity
11:30 - 11:45
High Tea
11:45 - 14:00
AGM
11:45 - 11:55 11:55 - 12:05 12:05 - 13:15
Volunteer Team
The Momento
Welcome by PMI NIC President Introduction of the board and Organisation structure - Secretary, NIC Presentations by VPs of respective portfolios Membership Portfolio Professional Development Portfolio
Synergy Team
Communications Portfolio Volunteer Management Portfolio Marketing and Outreach Portfolio Governance and Policy Portfolio Finance Portfolio Felicitation of members with continuous mem13:15 - 13:25
Networking
bership of 7 years or more - PMI NIC Past President
13:25 - 13:55
Open House - Moderated by PMI NIC President
13:55 - 14:00
Vote of Thanks - PMI NIC Past President
14:00 - 14:45
Lunch
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Program on Measurement of Productivity in Public Sector Projects Full day event in collaboration with PMO-ADB, Uttarakhand Energy Department
Chapter Event (4/6) 21st Jan 2015 This event was organized by our Dehradun Region Connect Ambassador, Mr. B C K Mishra, PMP. Project Engineers from UJNVL, UPCL, PTCUL, PWD, ONGC & other Govt. departments, total about hundred in numbers participated
Lecture and feedback
Explaining the Objective
Handing over of mementos
Participants, Speakers & Dignitaries Feedback: pminicmag@pminorthindia.org
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Workshop on Social PM Full day event in collaboration with Vistara
Chapter Event (5/6) 30th Jan 2015 This event was organized in coordination with Vistara. It started off with explaining of concepts, and respective case studies. This was followed by creating & participating group activities. Such activity made the event alive and left a mesmerizing experience for participants .
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Agile Life Cycle & Estimation Full day event in collaboration with Hughes Systique
Chapter Event (6/6) 30th Jan 2015 PMI - North India Chapter in collaboration with Hughes Systique organized a full day Event on Agile -Life Cycle & Estimation with strategic view as per PMI New talent triangle approach.
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L E A N - CROSSWORD By Le Roi
Solution
Rangarajan Ramanujam is an SoC FE Group Manager at STMicroelectronics. An aluminus of BITS Pilani and IIM Lucknow, he has a passion for solving cryptic crosswords from The Hindu and The Guardian. He is also an amateur setter and has set crosswords for the Hindu Crossword Corner under the pen name Le Roi.
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Ajay Bhargove
Nirmallya Kar
Pooja Kapoor
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Hemant Seigell
Parul Choudhary
Shashank Neppalli
Neelima Chakara
Prashant Malhotra
Lt. Col. Manu Chaudhary,(retd)
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