"Risk in Project Management"

2001-10-10

"Risk in Project Management" was a subject of already the second international conference organized by Management Training & Development Center. It took place on 10 October in Warsaw's Sheraton Hotel (October meetings of Project Management world in Warsaw are gradually becoming a tradition), accompanied by the motto: "Risk is not a problem, a problem is a risk whose time has come."

The conference room accommodated over 100 participants involved in very different industries, ranging from companies representing traditional lines of industry (Polskie Sieci Energetyczne, ZEPAK or Elektrociepłownie Warszawskie S.A.), through telecom companies (Polkomtel, PTC Era, TP S.A.) to IT corporations and Internet companies (2SI, Lanex, Kopernik.pl). We also had representatives of the financial sector (PKO BP, AIG Credit, and Amplico Life), consulting companies (Andersen, InfoVide), and FMCG (Philip Morris, Polski Handel Spożywczy).

MT&DC's choice of risk in project management as a subject was by no means accidental. Uncertainty is our inveterate companion, not only in our professional life. To quote Robert Butzke, who gave a presentation at last year's conference on "Managing Projects in Industry", "Murphy's laws are ruthless to Project Managers; if anything can go wrong in the project, it certainly will." Many of Project Management Academy students indicate risk as the major challenge and the most uncontrollable area of project management. Hence the decision to take up the subject at the conference and invitation to share the experiences extended to specialists. The number of participants and the wide variety of industries they represented implies strong interest in the topic of Risk Management.

This time the conference guests that moderated the discussions were:
Raed Haddad - Conference Chairman, Vice-President of ESI International (Educational Services Institute International from Washington), Project Manager with over 20 years of experience, a member of PMI® (Project Management Institute) Program Board, a lecturer at George Washington University, a holder of PMP® (Project Management Professional) certificate.

George Sifri - Project Manager with 15 years of experience in running IT projects, currently a consultant, ESI International lecturer, and the Director of Software Department in Consolidated Contractors Company, one of 30 largest construction companies in the world.

Paweł Żak - the Director of Siemens Business Services Office in Siemens Ltd.
His educational background is information technology; he graduated from the Department of Electronics at Warsaw Polytechnic. He has been associated with teleinfo industry for over 10 years. He has gained his professional experience in the following companies: Unisys, Compaq, and IBM. He worked for almost 5 years at IBM Poland, where he was responsible for selling IT products and services to the public and telecom sectors.
Since April 2000 he has managed an over 130-people Siemens Business Services Office, whose offer includes implementation of management support systems based on mySAP.com, CRM systems, IT outsourcing, security of information systems, as well as a country-wide service for teleinformation infrastructure.

Damon Morrison - Project Manager who started his career in 1984 as an analyst in the US Department of Defense (DOD), where for more than 10 years he explored risks connected with projects run by DOD. The author of many analyses and publications on this subject. Currently a member of George Sifri's team in Consolidated Contractors Company, responsible for the analysis of risks connected with projects carried out by CCC.

Just like in 2000, the conference began with Raed Haddad's "Risk involved in projects: avoid...reduce...delegate..., or perhaps make use of it?!". The dynamic presentation introduced the participants to the topics of project risk in the new light. Raed spoke about risk not only in terms of threats, but also opportunities that project managers should seize. Skillful management of uncertainty is not limited to minimizing threats; it's also maximizing the outcomes of positive events that we were not able to predict beforehand. He presented the results of statistical surveys that indicate frequent budget and schedule overruns caused, among others, by inadequate approach towards risk. He emphasized negative connotations of the very word "risk" and their consequences (people don't like doing things that call up negative associations.) With a simple exercise he proved that everyone views risk from his own perspective and what may seem risky to some people, may leave others unimpressed.

"Risk Management, or STOP! to failed IT projects" is the title of the second speech prepared by George Sifri. For 90 minutes the author presented the risks that typically lie in wait for project managers in the IT world. Naturally, it didn't go without some pessimistic yet very real statistics concerning costs and timeliness of IT projects. George gave examples of specific risks that call for special concern in IT projects because, as he argued, "We can't manage all risks because we don't have all the resources in the world available. We have to define those that may have the biggest impact on our project and focus primarily on them." George also presented the Matrix QFD A-1 tool that supports project management on projects related to the development and implementation of software.
His presentation met with great interest of the audience, who asked questions not only immediately after the presentation but also during the breaks.

The third presentation, "Risk connected with IT outsourcing projects", was developed by the Director of the Polish Office of Siemens SBS, Mr. Paweł Żak. SBS is one of the most energetic companies on the outsourcing services market in Poland. In his 30-minute presentation Mr. Paweł Żak shared his experience with risk in projects run by SBS. The conference participants had an opportunity to get familiar with both a complete list of risks that a client is exposed to in this type of projects, and the risks that a supplier of this type of services should take into account. The number of questions and the people interested, who continued the discussion with Paweł after the presentation, prove that it is a very hot subject nowadays.

The last but one person to take the floor was Damon Morrison. Damon, as an experienced specialist in project cost estimates and managing project cost-related risks, presented several practical solution under the common heading of "The philosophy of risk - how to assess uncertainty in the process of estimating project costs?" The lecturer began with a provocative comparison between two statements: "According to our predictions, the project will cost $500,000." and "With 67% probability we can determine that the project will cost less than $500,000." The next step was to present different methods for risk assessment, with emphasis on determining the probability of occurrence in intervals. Damon introduced the audience to ACEIT (Automated Cost Estimator), a program developed and used by the US Department of Defense (DOD) for cost estimation and risk assessment.

The conference was closed with the second appearance of Raed Haddad, who recapitulated all the presentations and invited the audience to take part in the lottery for the chance to attend the Managing Projects in Organizations training. This year we decided to distribute by lot 2 invitations to the opening module of Project Management Academy among the conference participants. The winners turned out to be Mr. Piotr Górny from InfoVide company and Mr. Sebastian Konkol representing PTC Era. We will meet them again in November, but this time in the training.

It is worth mentioning that the conference witnessed the Polish premiere of the first Polish edition of the fundamental book on project management, "Managing Projects in Organizations" by J. Davidson Frame. More information about the book.

October conferences organized under the auspices of Project Management Academy are enjoying increasing popularity. Please, feel invited to visit our website, where we will publish information about the next conference.

 

“PMI”- is registered mark of Project Management Institute, Inc.
“PMP”- is registered certification mark of Project Management Institute, Inc.

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