Uncertainty Performance Domain (PMBOK)

Negative Risk Strategies

(ATE.MA) Avoid: project team acts to eliminate the threat or protect the project from it's impact Escalate: appropriate for when the project team or sponsor agrees that a threat is outside the scope of the project or that the proposed response would exceed the project manager's authority Transfer: involves shifting ownership of a threat to a third party to manage the risk and bear the impact if the threat occurs Mitigate: action is taken to reduce the probability of occurrence and/or impact of a threat. Early mitigation action is often more effective than trying to repair the damage after the threat has occurred Accept: acknowledges the existence of a threat, but no action is planned. - active acceptance: a risk can include developing a contingency plan that would be triggered if the event occurred - passive acceptance: doing nothing (123)

Solutions for Ambiguity exploration

(PEP) Progressive Elaboration Experiments - a well-designed set of experiments can help identify cause-and-effect relationships or at least can reduce the amt of ambiguity Prototypes - can help distinguish the relationships between different variables (120)

Positive Risk Strategies

(SEEEA) Share - involves allocating ownership of an opportunity to a third party who is best able to capture the benefit of that opportunity Exploit - a response strategy whereby the project team, acts to ensure an opportunity occurs Escalate - appropriate for when the project team or sponsor agrees that a threat is outside the scope of the project or that the proposed response would exceed the project manager's authority (same response strategy for threats/negative risk) Enhance - project team reacts to increase the probability of occurrence or impact of an opportunity - early enhancement action is often more effective than trying to improve the opportunity after it has occurred Accept - acknowledges the existence of a threat, but no action is planned (same response strategy for threats/negative risk)

Alternatives Analysis

A technique used to find and evaluate identified options in order to select which options or approaches to use to execute and perform the work of the project. - looking at different ways to meet an objective (using a different mix of skills, resequencing work, or outsourcing work)

Ways of addressing volatility

Alternatives Analysis Cost or Schedule Reserve

Roll Wave Planning

An iterative planning technique in which the near-term work is planned in great detail while the future work is planned at a higher level

Risk

An uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives. - negative risk = threats - positive risk = opportunities All projects have risks *refer to module 3 quizlet to review risk threshold, appetite, and attitude

What are the two categories of ambiguity and what is the difference?

Conceptual ambiguity - the lack of effective understanding - occurs when people use similar terms or arguments in different ways - e.g. "the schedule was reported on track last week" - unclear if schedule was on track last week or reported on last week Situational ambiguity - arises when more than one outcome is possible - having multiple options to solve a problem

What does a cost reserve cover vs a schedule reserve?

Cost reserve - can be used to cover budget overruns due to price volatility Schedule Reserve - can be used to address delays due to volatility associated with resource availability

What are some different meetings used to review risk?

Daily standup meetings Meetings to demonstrate increments of the proof or service, interim designs or proof of concepts Weekly status meetings retrospectives and lessons learned meetings (page 127 for more details)

Ways of working with system-based complexity

Decoupling - entails disconnecting parts of the system to both simplify the system and reduce the # of connected variables - determining how a piece of a system works on its own reduces the overall size of the problem Simulation - There may be similar though unrelated scenarios that can be used to simulate components of a system

Ways of working with complexity that entails reframing

Diversity - complex system require viewing the system from diverse perspectives - can include brainstorming and/or delphi-like processes to move from divergent to convergent thinking Balance - balancing the type of data used rather than only using forecasting data or data that report on the past or lagging indicators

Responding to Uncertainty

Gather Info - conducting research, engaging experts, or performing market analysis - important to recognize when further info collection and analysis exceeds the benefit Prepare for multiple outcomes - project team should prep for each outcome by having a primary solution available and having a backup solution or contingency plans in the case that the initial solution isn't viable - if there is a large set of potential outcomes, the project team can rate which ones are most likely to happen and prioritize Set-based design - multiple designs or alternatives can be investigated early in the project to reduce uncertainty and project teams should look at tradeoffs (time vs cost, quality vs cost, risk vs schedule or schedule vs quality) Build in resilience - if initial approach to product design or prototype is not effective, the project team and org need to learn, adapt, and respond quickly

Ways of working with process complexity

Iterate - build iteratively or incrementally - add features one at a time - after each iteration, identify what worked, what didn't, customer reaction, and what the project team learned Engage - build in opportunities to get stakeholder engagement to reduce the # of assumptions and build learning and engagement into the process Fail Safe - for elements of a system that are critical, build in redundancy or elements that can provide a graceful degradation of functionality in the event of critical component failure

Uncertainty can lead to _____, _____, and _____

Risk - associated with not knowing future events Ambiguity - associated with not being aware of current or future conditions Complexity - associated with dynamic systems having unpredictable outcomes

Ways to work with complexity:

Systems-Based Reframing Process-Based

Overall Project Risk

The effect of uncertainty on the project as a whole, arising from all sources of uncertainty including individual risks, representing the exposure of stakeholders to the implications of variations in project outcome, both positive and negative. - often a function of complexity, ambiguity, and volatility - if overall risk of the project is too high, the org may choose to cancel the project

Progressive Elaboration

The iterative process of increasing the level of detail in a project management plan as greater amounts of information and more accurate estimates become available.

Volatility

The possibility for rapid and unpredictable change. - can occur when there are ongoing fluctuations in available skill sets or materials - usually impacts cost and schedule

Risk Review

The process of analyzing the status of existing risks and identifying new risks - also be known as risk reassessment

What is a budget category used for unknown events such as unplanned, in-scope work?

a Management Reserve

Complexity

a characteristic of a program or project or its environment that is difficult to manage due to human behavior, system behavior, and ambiguity - exists when there are many interconnected influences that behave and interact in diverse ways - the effect of complexity is that there is no way of making accurate predictions about the likelihood of any potential outcome or even of knowing what outcomes might emerge

What is set aside to address identified risks should they occur?

a contingency reserve

Uncertainty

a lack of understanding and awareness of issues, events, paths to follow or solutions to pursue - presents threats and opportunities that project teams explore, assess, and decide how to handle - a state of not knowing or unpredictability (117)

Ambiguity

a state of being unclear, having difficulty in identifying the cause of events, or having multiple options from which to choose

Reserve

an amount of time or budget set aside to account for handling risks

Threats

an event or condition that, if it occurs, has a negative effect on one or more project objectives - also known as a negative risk - a response to a specific threat may include multiple strategies (e.g. if threat cant be avoided, mitigate it to a level at which it becomes viable to transfer or accept)

Opportunities

an event or condition that, if it occurs, has a positive impact on one or more project objectives - also known as a positive risk - e.g. a time and materials-based subcontractor who finishes work early, resulting in lower costs and schedule savings

Environmental factors that contribute to uncertainty:

economic factors - volatility in prices, availability of resources, ability to borrow funds, and inflation/deflation technical considerations - new or emerging tech, complexity associated with systems and interfaces legal or legislative constraints or requirements physical environment - safety, weather, and working conditions ambiguity (future and current conditions) social and market influences - shaped by opinion and media political influences - external or internal to the org

Resilience

the ability to adapt and respond quickly to unexpected changes

Residual Risk

the risk that remains after management implements internal controls or other risk responses - response planning should be repeated until residual risk is compatible with the org's risk appetite

What does the acronym VUCA stand for?

volatility uncertainty complexity ambiguity