#303 – JOHN AYERS – FUTURE OF WORK – PROJECT MANAGEMENT – JAMES KLINE PH.D.

John Ayers has a BS in Mechanical Engineering and a MS in Engineering Management. He is a member of Project Management Institute. He has managed large highly technical development projects for the private sector and the Department of Defense.  Professionally he has held positions such as Director of Programs, Director of Operations, Project Engineer and Design Engineer. He writes a weekly column for CERM. He also writes a monthly blog for Association of Project Managers.  His book “Project Risk Management” is available on Amazon.

  1. Your book “Project Risk Management” is comprehensive. It takes the reader through all the steps involved in project management. What makes your book different from other project management books?

My book is a tutorial that not only explains what project risk management and project management are, but also how to implement them on a project. I do not think you can find another book like it.

It explains in a clear and logical manner how to implement project management, risk management, earned value management, risk mitigation, and subcontract management into a project with step by steps examples. Let me provide an example.

There are many books out there including the PMBOK Guide (Project Management Body of Knowledge) that explains what risk management is and how to follow the process. The process being: initiate, plan execute, control and close.  None explain what a risk mitigation plan is, how to generate one, and how to incorporate it into a project Integrated Master Schedule (IMS). My book shows how to develop an IMS.

The book contains other examples such as what Earned Value Management (EVM) is, how to implement it into a project, and how to use it with examples. It explains the phases of: construction project delivery systems (design-bid and design-bid-build); the DOD industry, the IT industry, and the PMBOK Guide. The advantages and disadvantages of each phase for each industry are also explained.

My book can be used in the Department of Defense (DOD), construction industry, the IT industry, and all other industries that use project management. It is easy to read and understand. Each chapter begins with a flow diagram identifying the topics in the chapter.  I highly recommend it for aspiring and experienced project managers.

  1. What are the two key points you hope the reader will take away from reading your book?

Key point # 1- Project risk management requires an understanding and knowledge about project management, earned value management., risk management, and subcontract management to be successful.  Each discipline addresses a specific type of project risk. Together they address virtually all types of risks that can be imposed on a project. Studies show that a majority of projects that fail are caused by poor project management.  Applying sound project management methods and techniques will increase the probability the of success.

Earned Value Management (EVM) is a very effective tool to measure project progress against the baseline plan. EVM identifies poorly performing work packages early allowing maximum time to resolve the problem. Risk management addresses the unknown risks that surround every project. Learning how to initiate, plan execute, control, and close these risks is important to the success of a project. Today most companies outsource a large majority of their work scope to be competitive. As a result, the subcontractor becomes a risk to a project.  Mitigating this risk by careful selection and management of the subcontractor will improve the probability of success on a project.

Key point # 2- The proposal phase is the most critical one on a project. The budget and schedule are established during this phase. Once the proposal is submitted to the customer, the only reason why the budget or schedule can change is during negotiations. Otherwise they are cast in concrete once the proposal is submitted. It is essential that a complete and thorough risk assessment be conducted during the proposal phase to ensure the budget and schedule for mitigating risks are included in the proposal. It is very important to work with the candidate subcontractors before the customer issues the RFP to provide maximum time for the subcontractors to prepare and submit their proposals.

  1. In your October 24, 2020 article in CERM Risk Insights entitled “Quality Risk is a Major Reason For Project Failure”, you provide a story about the Hubble Telescope. You indicate that originally the mirror on the Hubble was to be polished using a new process. However, management thought it was to big a risk. After the standard approach was used, engineers wanted to check the quality of the mirror. However, management opted not to perform the quality check because the Hubble project was behind schedule and over cost. Consequently, the Hubble was sent into orbit with a defective mirror. A mirror that had to be repaired, at a much higher cost, in space. In your article, you note that quality risk is a major reason for project failure. Would you expand on this idea?

Years ago, the QA Manger typically reported to the Director of Operations (DOO). This was a conflict of interest, since the DOO was incentivized to ship as much product as possible by the end of the year. Today, the quality assurance function is a main arm of the top management.  The conflict of interest has been eliminated. In spite of these changes, QA is still compromised in some cases.  I contend that management compromises QA to help mitigate the projects cost and schedule problems. The Hubble Telescope story is an example of this.  If the known risks on a project were managed well, chances are management would not have a need to comprise QA.

What are the known risks?  They are:

  1. Scope
  2. Schedule
  3. Cost
  4. Quality
  5. Technology

The challenge to the project manager is to perform to the scope of the contract but not more and not less. Sometimes the scope is not fully defined or mis-understood creating a serious risk situation which may not be known until late in project. The project manager is responsible to ensure that the scope is clear.  The schedule must have margin built into it. Ensure the subcontractors schedule also has a built-in margin.  If not, this can be a major risk to the project. The project’s cost risk begins with the proposal response time frame, often 60 days. The short time puts a lot of pressure on the proposal team to collect, review, and approve costs.  Subcontractor pricing is more of a challenge because they have a short time to prepare their proposal. This is a major risk for establishing the budget. The quality risk is management’s comprising quality to mitigate the projects schedule and cost issues.

Managing the known risks will mitigate the need for management to compromise on quality.

  1. What do you see as the future of project risk management?

Prior to COVID-19, two notable trends were taking place. They are: remote working; and projectized work.  The pandemic accelerated these trends greatly. A new trend that was initiated due to the virus is verbal commands. No more touching key pads with the fear of contracting COVID-19. New professions dealing with the systems requirements for better and more efficient video conferencing will emerge. Google and Microsoft are examples of large companies that are developing future office space for COVID protection and friendlier more relaxing work space for improved productivity.

What do these changes and trends mean to the future of risk management? These changes primarily address where and how we communicate for work. It does not change the skills and knowledge required for most professions, including project risk management. These changes will be a significant challenge to project managers because they will have to manage a diverse geographical and cultural team diversity. This challenge will pose a risk to every project. More and more work will be projectized because it is more efficient and gets faster results. I think this is true for smaller projects. I think these changes will be incorporated into large construction, DOD and IT projects in a limited way.

I believe the changes discussed above are valid for the next 5 years or so. When AI matures and comes on line in a meaningful way, it will have profound unknown changes to all industries. AI will change project risk management. It will reduce uncertainty and variations. It will improve project projections among other things.

 

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