Blog: Project Management and Project Risk Analysis

January 12, 2018
Agile Project Management and Quantitative Analysis

Quantitative risk analysis is a valuable component of the project risk management process for any project managed by traditional methods, for example, in the construction industry. What about projects managed by agile methods, for example in software development? Agile approach has a number of principles. Some of these principles are directly related to project scheduling and risk management:

  • The project is performed iteratively where the next iteration is planned based on results of previous iteration.
  • The project plan is defined on a high level usually as a set of sequential iterations with their deliverables.
  • Detailed Risk register with probabilities and impact often are not explicitly defined; instead there is a backlog of issues which need to be resolved in each iteration.

We believe that even for agile project management quantitative risk analysis would be a valuable project planning tool.

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January 8, 2018
Mexican Vacations and Value of Qualitative Risk Analysis

Is there any value in qualitative risk analysis or is it just a burden? Qualitative risk ananlysis is mostly a mental exercise. Risk identification, assessment of risk probabilities and impact makes you think about about three main questions:

  • What can happen?
  • How will it impact what i’m doing?
  • What do I do about it?

People make wrong choices simply because they don’t ask themselves these questions or if they do, they don’t allocate adequate mental effort in to thinking through these questions. For example, people tend to forget something or are overoptimistic in assessing future risks. The value of formal qualitative risk analysis is to help people to understand the implications of what they are going.

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December 15, 2017
Taxation and Adaptive Project Management

The US government is currently in the process of changing the federal tax framework. There is a lot of discussion about the content of these changes, how it will affect business environments, personal finances, and government departments. The bottom line is that taxation is a complex issue and that nobody will know its exact impacts until it is actually implemented and in place for some time. For example, the new tax bill is will reduce corporate taxes in an attempt to increase economic growth. What is unknown is how companies will employ this additional revenue. Will they reinvest it in US economy or just pay dividends to shareholders of which a significant portion of them are outside the US? Our opinion is that tax regulation, as well as many other complex government regulations should be implemented based on Adaptive Project Management principles.

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December 14, 2017
Uncertainties in Project Risk Analysis

“Pirates of the Caribbean: On Stranger Tides” by Disney released in May 2011 is the most expensive movie in history at a cost of  $410.6 million. Despite the significant cost, the movie was profitable with revenue over $1,054 million worldwide, half of which went to movie theatres. According to financial statements, this huge cost was not due to overspending.  The largest cost were incurred paying actors and production staff, Johnny Depp received $55 million. Movie production is a creative process with a very large number of uncertainties that can affect the movie budget and completion date of the project. A few risk events combined, can result in massive cost overruns.

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