Risk Management

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Risk Management
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Risks and Risk Management

• Risks are potential events that have negative
  impacts on safety or project technical
  performance, cost or schedule
• Risks are an inevitable fact of life risks can
  be reduced but never eliminated
• Risk Management comprises purposeful thought to
  the sources, magnitude, and mitigation of risk,
  and actions directed toward its balanced
  reduction
• Beneficial Risk - The same tools and perspectives
  that are used to discover, manage and reduce
  risks can be used to discover, manage and
  increase project opportunities (increased
  performance).

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• What if?

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IF

• Predict IF Identify
• Evaluate IF Analyze
• Plan for IF Plan
• Tracking IF Track
• Budget for IF Control

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Risk Management

• Laws
• Terms
• Types of Risk
• Risk Management

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Laws

• Murphys Law
• If something can go wrong it will go wrong
• Finagles Law of Dynamic Negatives (corollary to
  Murphys Law
• Things will go wrong at the worst possible time

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What is Risk Management?
Risk management is a continuous and iterative
decision making technique designed to improve the
probability of success. It is a proactive
approach that

• Seeks or identifies risks
• Assesses the likelihood and impact of these risks
• Develops mitigation options for all identified
  risks
• Identifies the most significant risks and chooses
  which mitigation options to implement
• Tracks progress to confirm that cumulative
  project risk is indeed declining
• Communicates and documents the project risk
  status
• Repeats this process throughout the project life

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Risk Matrix
Impact
Probability of Occurrence
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Risk Warning Signs

• TPMs
• Schedule Projections
• Cost Projections
• Supplier problems
• Late technology demonstrations

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Types of Risk

• Technical Risks
• Programmatic Risks
• Cost
• Schedule
• Supportability Risks
• Beneficial Risks

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Risk Analysis

• What Could Go Wrong
• What is the Probability
• What is the Magnitude of Impact
• Cost
• Schedule
• Performance
• Alternate Strategies (Off Ramps)

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Beneficial Risk

• High Risk High Payoff
• Mitigation Strategy
• Alternate Plans
• Criteria
• Schedule
• Budget

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Risk Handling

• Have a Plan
• Total Program
• Budget (Cost / Schedule) for Plan
• Get Buy-In
• Monitor Status
• Metrics
• Close out

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Risk In General

• Risk is Healthy
• Not Identifying Risk shows
• You dont understand the program
• AND/OR
• You are dishonest
• AND/OR
• You think the customer is stupid
• Identify all potential Risk
• Knock them down with Mitigation Plans

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Summary

• Its risky not to embrace risk.

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SE Technical Program Mgmt

• Key focus of systems engineering
• includes the direction of a totally integrated
  effort of system design, test and evaluation,
  production, and logistics support over the system
  life cycle
• The goal is timely deployment of an effective
  system, sustaining it, and satisfying the users
  need at an affordable cost.
• Involves balancing a systems cost, schedule, and
  performance while controlling risk.

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Technical Performance Measures

• TPMs are measures of the system technical
  performance that have been chosen because they
  are indicators of system success. They are based
  on the driving requirements or technical
  parameters of high risk or significance - e.g.,
  mass, power or data rate.
• TPMs are analogous to the programmatic measures
  of expected total cost or estimated
  time-to-completion (schedule).

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Technical Performance Measures

• Actual versus planned progress of TPMs are
  tracked so the systems engineer or project
  manager can assess progress and the risk
  associated with each TPM.
• The final, delivered system value can be
  estimated by extending the TPM trend line and
  using the recommended contingency values for each
  project phase.
• The project life trend-to-date, current value,
  and forecast of all TPMs are reviewed
  periodically (typically monthly) and at all major
  milestone reviews.

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TPMs Are Tools

• Technique of predicting the future value of a key
  technical performance parameter
• Continuous verification confirms progress and
  identifies variances
• Assessed values falling outside established
  tolerances indicate the need for management
  attention

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Why TPMs

• A well thought out TPM program provides
• Early warning of technical problems
• Supports assessments of the extent to which
  operational requirements will be met
• Assesses the impacts of proposed changes made to
  lower-level elements in the system hierarchy on
  system performance.

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Balancing Cost, Sked, Performance
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Selecting TPMs

• Parameters to be tracked are typically based on
  the combined needs of the customer and the
  contractor
• Contractor may track more items than are reported
  to the customer, as the contractor needs
  information at a more detailed level than does
  the customer program office.
• Customer requires visibility into the technical
  performance of key elements of the work breakdown
  structure
• Especially those which are needed to meet system
  key performance parameters (KPPs), are cost
  drives, lie on critical path or high risk items

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Example TPM
Shipboard Fire Control System
Power Density Detection Range Slew Time Tx Ant
Side lobes CW Ant Side lobes Tx Track Acc AM
Noise FM Noise Pointing Acc Weight Radiated
Power MTBF MTTR Range Res Angle Res
CW Transmitter
Data Processor
Antenna
Slew Time MTTR Side Lobes Beam Width
AM/FM Noise Radiated Pwr MTBF
MTBF Memory Proc Speed MTTR
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TPM Selection

• The level of the system at which parameters are
  selected is based on how readily the information
  supports timely design decisions.
• For example, the timely identification and
  neutralization of targets and threats are
  essential to both the operational effectiveness
  and survivability of a ship.
• If there is a risk associated with meeting the
  detection range requirement allocated to the
  ships fire control system, then the technical
  manager will want to have data that supports
  design decisions related to achieving both the
  system and subsystem performance during the
  design process, such as predicted (and actual)
  radiated power and data processor speed.

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TPM Selection

• These are metrics that can be measured under
  laboratory conditions before costly and
  time-consuming fabrication, integration, and
  conformance testing of higher assemblies and
  continued monitoring assures that required values
  are met under actual environmental conditions and
  system loading.
• Thoughtful selection of the parameters to measure
  can minimize unpleasant surprises in formal
  developmental and operational testing.

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Conceptual TPM Graphic
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Team Project

• Make sure you have at least 4-5 TPMs for your
  project. They must be presented in graphical
  form like previous slide