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IS 425

IS 425. Enterprise Information I LECTURE 9 Autumn 2004-2005 2004 Norma Sutcliffe. Sourcing Decisions & Risk Management. Exercise Quiz Lecture. Each team is given Leadership Effectiveness tasks For each task: Give one example of the wording of the task in:

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IS 425

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  1. IS 425 Enterprise Information ILECTURE 9 Autumn 2004-20052004 Norma Sutcliffe

  2. Sourcing Decisions & Risk Management • Exercise • Quiz • Lecture Session 9

  3. Each team is given Leadership Effectivenesstasks For each task: Give one example of the wording of the task in: Directive Style and who is the appropriate audience Interactive Style and who is the appropriate audience Nondirective Style and who is the appropriate audience Exercise Session 9

  4. Quiz • DL students have homework assignment on COL Session 9

  5. Risk Management • DefinitionThe process in which potential risks to a business are identified, analyzed and mitigated, along with the process of balancing the cost of protecting the company against a risk          vs. the cost of exposure to that risk. • Or, "What imperils getting benefits from effort?" Session 9

  6. General Categories of Risks: Economic Risks Technical Risks Organizational Risks Legal Risks Terrorist Risks Session 9

  7. General Categories of Risks: Economic Risksapplies to risks that can potentially impact the business. These risks could result to failure or loss of business. • business environment changes • vendor survival Session 9

  8. General Categories of Risks: Technical Risksapplies to the risks that can impact the development, implementation, and the operation of a system. Sources of these risks can come from the project team’s degree of familiarity with the technology, familiarity with the application, security and project size.  • integrating technology with existing portfolio • poor training • poor monitor/control  Session 9

  9. General Categories of Risks: Organizational Risks applies to the risks that could potentially impact the acceptance of the project. Problems arise when there is potential reduction of manpower, changing the way business process is performed, and when there is increase of workload. Consequences to these risks are defined below: • resistance to the system • low morale of personnel • lack of political support • possible rejection of the system • poor procedures • lack of trained support • lack of trainers • ineffective use by users • poor help desk Session 9

  10. General Categories of Risks: Legal Risksapplies to risks arising from potential lawsuits and liabilities associated with the implementation of a project. • fiduciary responsibility of managers • laws and regulations inappropriately administered • personal financial and criminal liability (from shareholder lawsuits and FCPA) Session 9

  11. General Categories of Risks: Terrorist Risks applies to risks arising from intentional destruction or malevolent modification of the  • physical equipment • data and information files • communication links • software Session 9

  12. Sources of Project Risks • Project Work • Project Team and Leader • Management • Business Situation • Other Projects • External Factors • Technology • Vendors and Contractors • Business Processes • Business Units • Customers and Suppliers Session 9

  13. Sources of Project Risks • Project Work – quality and completeness of the work • Project Team and Leader – personality issuesallocation of resourcestrust issues • Management – poor or no decision makinglack of attention • Business Situation -- assumptions change-- conditions change Session 9

  14. Sources of Project Risks • Other Projects-- Changes in priorities • External Factors-- regulatory changes, -- union pressures, -- consumer groups-- various special interest groups • Technology-- changes that can make project irrelevant Session 9

  15. Sources of Project Risks • Vendors and Contractors-- reliability -- quality-- sustainability • Business Processes-- reengineering changes power bases • Business Units-- management changes-- organization changes-- staffing changing • Customers and Suppliers-- changes in mix Session 9

  16. Keeping Track of Risks Keep a count of the OPEN RISKS by type for each project –Update regularly Keep track of your progress in mitigating / resolving risksREMEMBER – MANY RISKS WILL COME TOWARDS THE END OF THE PROJECT – SO THINK / PLAN AHEAD Session 9

  17. Constraints on Taking Actions • Before taking actions to resolve/mitigate risks keep in mind— • Symptoms seen as Problems symptoms can be treated leaving the underlying problem unresolved & growing • Seen as panicking If you constantly bring the risks to management’s attention – may be seen as crying wolf • Look before you leap – get enough facts first Session 9

  18. Risk Strategies • Deal only with critical factors – need to monitor all problems and catch those before they balloon • React quickly to issues – need to know enough about what causes issues • Proactive but still conservative – use a method that will help you know you have enough to act and then act Session 9

  19. Preferred Project Risk Strategy Method • Group issues by • Impact if not solved • Time pressure to do something • Use your judgment and experience on positioning issues Session 9

  20. Issues to be Addressed • Issues 23 and 27 must be addressed • Issue 10 has time pressure so investigate Session 9

  21. Time Marches on • Some issues go away • Some issues emerge • Some get more troublesome Session 9

  22. Risk Issue Management Process • Create project risk issue database200+ commonly known problems • Identify 20-30 most likely based on experience • Present potential issues to management with project proposal • In estimating project tasks – more issues may emerge • All issues relate to tasks – if not find the missing tasks Session 9

  23. Risk Issue Management Process • Phase beginning -- team meetings on near term issues-- discuss impact of issues-- track the issues-- develop issues resolution table-- use 1-page project summary to Mgt. • Create table of issues versus projectsCreate GANTT chart (major tasks / issues)-- follow-up on resolved issues (no reappearance)-- implement actions when known or appropriate • When resolved -- celebrate Session 9

  24. Management Communications • Focus on informal communications with management on risk issues • Focus on getting management slowly on board with knowledge of problem growing • Then on presenting alternatives • Then on getting approval for actions Session 9

  25. Project Risk Portfolio Approach • Same issues database for all major projects • Common issues reporting method • Periodically prepare new table of issues versus projects • Support / facilitate • Meetings • Analysis on issues • When issue resolved -- take the decisions, then-- identify action items for each impacted project-- follow up on action items across project-- report to management Session 9

  26. AFTER PROJECT DEPLOYMENT RISKS CONTINUE andMUST BE HANDLED Session 9

  27. OTHER RISK APPROACHES • For IT investments – not project management • Portfolio approach – manage risks by treating IT resources such as hardware, software, services and personnel as collection of investments. Decisions are made based from the potential return of investment or payoff against the level of risks. • Interdisciplinary Approach – applies an integrated assessment of the risks from various groups in a company to determine and assess all dimensions of risks. Session 9

  28. NEXT WEEK • REVIEW • DEBATE WORKSHOP Session 9

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