7.1 Do you agree with the following statement: “With proper planning, it is possible to eliminate most/all risks from a project”? Why or why not?
7.2 In evaluating projects across industries, it is sometimes possible to detect patterns in terms of the more common types of risks they routinely face. Consider the development of a new software product and compare it to coordinating an event, such as a school dance. What likely forms of risk would your project team face in either of these circumstances?
7.3 Analyze Figure 7.2 (degree of risk over the project life cycle). What is the practical significance of this model? What implications does it suggest for managing risk?
7.4 What are the benefits and drawbacks of using the various forms of risk identification mentioned in the chapter (e.g., brainstorming meetings, expert opinion, etc.)?
7.5 What are the benefits and drawbacks of using a qualitative risk impact matrix for classifying the types of project risk?
7.6 What are the benefits and drawbacks of using a quantitative risk assessment tool such as the one shown in the chapter?
7.7 Give some examples of projects using each of the risk mitigation strategies (accept, minimize, share, or transfer). How successful were these strategies? In hindsight, would another approach have been better?
7.8 Explain the difference between managerial contingency and task contingency.
7.9 What are the advantages of developing and using a systematic risk management approach such as the PRAM methodology? Do you perceive any disadvantages of the approach?
7.10 Consider the following observation: “The problem with risk analysis is that it is possible to imagine virtually anything going wrong on a project. Where do you draw the line? In other words, how far do you take risk analysis before it becomes overkill?” How would you respond
7.11 Assessing Risk Factors. Consider the planned construction of a new office building in downtown Houston at a time when office space is in surplus demand (more office space than users). Construct a risk analysis that examines the various forms of risk (technical, commercial, financial, etc.) related to the creation of this office building. How would your analysis change if office space were in high demand?
7.12 Qualitative Risk Assessment. Imagine that you are a member of a project team that has been charged with developing a new product for the residential building industry. Using a qualitative risk analysis matrix, develop a risk assessment for a project based on the following information: Identified Risk Factors Likelihood
1. Key team members pulled off project 1. High
2. Chance of economic downturn 2. Low
3. Project funding cut 3. Medium
4. Project scope changes 4. High
5. Poor spec. performance 5. Low
Based on this information, how would you rate the consequences of each of the identified risk factors? Why? Construct the risk matrix and classify each of the risk factors in the matrix.
7.13 Developing Risk Mitigation Strategies. Develop a preliminary risk mitigation strategy for each of the risk factors identified in Problem 2. If you were to prioritize your efforts, which risk factors would you address first? Why?
7.14 Quantitative Risk Assessment. Assume the following information: Probability of Failure Consequences of Failure
Maturity = .3 Cost = .1
Complexity = .3 Schedule = .7
Dependency = .5 Performance = .5
Calculate the overall risk factor for this project. Would you assess this level of risk as low, moderate, or high? Why?
7.15 Quantitative Risk Assessment. Assume the following information for an IT project: Probability of Failure Consequences of Failure
Maturity = .7 Cost = .9
Complexity = .7 Schedule = .7
Dependency = .5
Client Concerns = .5
Programmer Skill = .3
Performance = .3
Future Business = .5
Calculate the overall risk factor for this project. Would you assess this level of risk as low, moderate, or high? Why?
7.16 Developing Risk Mitigation Strategies. Assume that you are a project team member for a highly complex project based on a new technology that has never been directly proven in the marketplace. Further, you require the services of several subcontractors to complete the design and development of
this project. Because you are facing severe penalties in the event the project is late to market, your boss has asked you and your project team to develop risk mitigation strategies to minimize your company’s exposure. Discuss the types of risk that you are likely to encounter. How should your company deal with them (accept them, share them, transfer them, or minimize them)? Justify your answers.
7.17 Assessing Risk and Benefits. Suppose you are a member of a project team that is evaluating the bids of potential contractors for developing some subassemblies for your project. Your boss makes it clear that any successful bid must demonstrate a balance between risk and price. Explain how
this is so; specifically, why are price and risk seen as equally important but opposite issues in determining the winner of the contract? Is a low-price/high-risk bid acceptable? Is a high-price/low-risk bid acceptable? Why or why not?