9

ASSESSMENT 1

BSB61218
Course Name
Advanced Diploma of Program Management

Subject/module Program Risk

Part A: Written Assessment

Assessment method
Part B: Written or Oral Questions

Weighting 50%

BSBPMG616
Units of Competency
Manage program risk

Instructions
1. Assessments should be completed as per your trainer’s instructions.
2. Assessments must be submitted by the due date to avoid a late
submission penalty.
3. Plagiarism is copying someone else’s work and submitting it as your
own. You must write your answers in your own words and include a
reference list. A mark of zero will be given for any assessment or part of
an assessment that has been plagiarised.
4. You may discuss your assessments with other students, but submitting
identical answers to other students will result in a failing grade. Your
answers must be yours alone.
5. Your trainer will advise whether the assessment should be digitally
uploaded or submitted in hard copy. Assessments that are digitally
uploaded should be saved in pdf format.
6. You must attempt all questions.
7. You must pass all assessments in order to pass the subject.
8. All assessments are to be completed in accordance with WHS regulatory
requirements.

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BSB61218 ADVANCED DIPLOMA OF PROGRAM MANAGEMENT | PROGRAM RISK_V1.4
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Assessment 1 – Case Study

Read the case study title :”Standardised Program Risk Management” (overleaf)
1. Discuss the standard risk management methodology of the Program AB-99
from the case study and suggest what the Program Manager should do to
improve this standard methodology. (20 marks)
2. Determine which stakeholders would need to be consulted. (10 marks)
3. Describe the process you would use to mentor Project Managers involved
with the Program in the case study. (10 marks)
Assessment 1 total: 40 marks
Notes:

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BSB61218 ADVANCED DIPLOMA OF PROGRAM MANAGEMENT | PROGRAM RISK_V1.4
 11

Standardized Program
Risk Management
Peerasit Patanakul

Rose Martin, a senior program manager of the AB-99 program, sits at her desk and
looks at the risk management framework her team currently uses. This framework
has been developed over the years and is adopted by her organization as a stand-
ard framework. Rose is wondering whether this standard methodology should be
revised to address the challenges of future programs. “Our organization is taking
more risks these days. If our risk management framework cannot handle this, one
day we will be on the front page, which may not necessarily be good.”

THE COMPANY AND THE AB-99 PROGRAM

Rose works for a multinational aerospace manufacturer, global security, and
advanced technology company. The company is the world’s largest defense con-
tractor by revenue and offers a variety of products and services. Systems integration
is among these services.
Rose’s program, AB-99, is one of the programs under the Systems Integration
business unit. The company is the prime systems integration contractor for AB-99
with the total responsibility of overseeing all systems integration efforts. It is a
multiyear contract to integrate advanced electronic systems into 99 multimission
helicopters to improve their communications capabilities.

STANDARD RISK MANAGEMENT METHODOLOGY

For AB-99, Rose creates the environment that promotes a positive attitude toward
risk management. Risk management is considered as an important part of program
management. In fact, risk management is ingrained in the company culture. It is
practiced in every program by everyone. Since it is typical that a major defense
program consists of extended teams, it is important that the program stakeholders
are involved in risk management on at least two different levels—the team level
and the program level (see Figure 20.1). Each level forms its own risk manage-
ment board. At the team level, the team takes responsibility for the program risk

391
Milosevic, D. Z., Patanakul, P., & Srivannaboon, S. (2007). <i>Case studies in project, program, and organizational project
management</i>. Retrieved from http://ebookcentral.proquest.com
Created from uow on 2017-11-01 15:34:45.

ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE

BSB61218 ADVANCED DIPLOMA OF PROGRAM MANAGEMENT | PROGRAM RISK_V1.4
 Created from uow on 2017-11-01 15:34:45.

Milosevic, D. Z., Patanakul, P., & Srivannaboon, S. (2007). <i>Case studies in project, program, and organizational project
management</i>. Retrieved from http://ebookcentral.proquest.com
BSB61218 ADVANCED DIPLOMA OF PROGRAM MANAGEMENT | PROGRAM RISK_V1.4

Figure 20.1 Standard Risk Management Process

392
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Program
Potential risks
level
Assesses risks Risk - Program risk
Response plans identification, reviews
assessment, - Periodical
Risk Data base and handling program
management
Online data repository Risk tracking data
reviews
Risk status data
Facilitating real-time program risk management Risk
- Ongoing
monitoring via
surveillance data base
Potential risks Assessment tools and Response plans - Etc.
Risk tracking data

12
techniques
Assessed risks Risk status data

Potential Assessed Response

risks risks plans
Team Risk Risk
Risk handling
Risk
identification assessment surveillance
level
Escalation

Assignment
- Risk meeting - Risk factor: probability - Develop risk - Periodical project
- Technical reviews and impact response plans reviews
- Subcontractor reviews - Quantitative risk - Approval of risk - Periodical status
- Ongoing program analysis response plans by reviews
monitoring - Assignment of e.g., team lead - Periodical technical
- Technical performance ownership for risk performance
measurements handling, e.g., team lead reviews
- Cost and schedule
analysis
- Periodical program
management reviews
- Etc.
 13

Standardized Methodologies 393

in their areas. The team is also responsible for highlighting risks that warrant
elevation to the Program Risk Management Board. Risk management at the pro-
gram level is performed to facilitate the coordination and oversight of the overall
program risks.
The company practices a standard risk management process which is aligned
with the Department of Defense policy. The typical steps in the risk management
process include risk identification, risk assessment, risk handling, risk surveil-
lance, and risk closure.
Risk Identification: Risks are identified at all levels and throughout the entire
program life cycle. For AB-99, Rose recalls that, during the early stage of the
program, they identified risks by examining the contract requirements, Statement of
Work (SOW), specification and other Request for Proposal (RFP) materials, as well
as the internally developed work breakdown structure (WBS), Integrated Master
Schedule (IMS), and program plans. This initial assessment led to areas where the
team focused on improving the performance position to meet technical requirements,
cost targets, and schedule goals, while balancing all three elements. The risk iden-
tification process also includes the review of the WBS against the internal risk
taxonomy matrix. This matrix, in fact, serves as a checklist for risk categories,
which include requirements, design, integration and test, management processes,
program constraints, production, and logistics (including obsolescence).
Risk Assessment:To identify risk priority, risks were assessed by using both
qualitative and quantitative approaches. For the qualitative risk assessment,
risks were classified by likelihood and impact levels. The likelihood represents
the probability of risk occurrence. For the impact level, the adverse trends in
performance-measuring parameters from the impact or risks are measured and
predicted. These parameters are the technical, cost, and schedule dimensions. In
terms of assessment scales, the AB-99 team uses a scale of 1 to 5 to assess likeli-
hood (remote to near certain) and impact (high to low). The explicit operational
definitions for both likelihood and impact were used to facilitate a consistent
evaluation standard. After the assessment, risks were added to a matrix. This
risk matrix helped facilitate the risk prioritization and the group review and
discussion of the risk and corresponding step-by-step mitigation schemes. Rose
remembers that the cumulative effect of all of the risks on program cost in dollars
was provided by a summation of the individual factored cost exposures. Cost
exposure is reviewed on a premitigation and a postmitigation basis, enabling the
program to review the predicted reduction of cost exposure.
In addition to the qualitative risk assessment, the AB-99 team also employed
the quantitative risk assessment. In particular, the risk likelihood was evaluated in
terms of percent and the impact level was identified in terms of dollars (cost) or
days (schedule). Factored cost or schedule exposure was defined as the product
of the likelihood and impact in dollars or days. Rose recalls that each risk analy-
sis included the determination of a root cause. By categorizing the root cause,
potential mitigation actions became more evident and more effective.

Milosevic, D. Z., Patanakul, P., & Srivannaboon, S. (2007). <i>Case studies in project, program, and organizational project
management</i>. Retrieved from http://ebookcentral.proquest.com
Created from uow on 2017-11-01 15:34:45.

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BSB61218 ADVANCED DIPLOMA OF PROGRAM MANAGEMENT | PROGRAM RISK_V1.4
 14

394 CASE STUDIES

Risk Handling: After the program risks were evaluated and prioritized,
the action plans were developed for responding to the moderate and high risks.
Avoidance, mitigation, and the use of contingency (acceptance) were the com-
mon action plans. Low risks were maintained on a watch list, reviewed quarterly
for changes, and closed when no longer applicable.
Risk Surveillance: At the team level, the risk management board of each
team continually tracked high- or moderate-risk items. On a particular risk item,
once the board agreed that the risk level changed from moderate or high to low,
that risk item was placed on the watch list and monitored for changes. The board
also monitored whether any risk items needed possible additional funding from
the management reserve, whether any risks warranted elevation to the program
risk management board, and whether there were any newly identified risks. At the
program level, the program risk management board met regularly to review and
discuss new potential risks and to manage existing risk mitigation efforts.
Risk Closure: Closure criteria were developed to evaluate risk items.
According to the criteria, if risks (especially the ones on the watch list) are
assessed as no longer a factor, they are closed and removed from the list.

THE USE OF A RISK MANAGEMENT DATA BASE

To make this risk management activity possible, the AB-99 team uses a risk man-
agement data base. In the data base, risks are described, catalogued, updated,
tracked, and so forth. Rose believes fully that the use of the data base helps them
manage risks effectively. The team uses the data base to support (1) the integrated
risk management, (2) the risk verification by risk management boards, (3) the risk
scoring system, and (4) the establishment of metrics and closure criteria for miti-
gation tracking. The data base also (1) is the central location for obtaining risk
assessment data for the program, (2) provides for the team to respond quickly to
emerging risks, (3) facilitates shared monitoring of risks affecting multiple sub-
systems, and (4) is the tool used to communicate risk areas and status to the chief
engineers and program leadership council. Rose loves the automated notification
feature of her data base because it gives any team member the ability to enter or
update risks and the owner/auctioneer receives an immediate notification so they
are aware of the changes and can access the information directly.

Milosevic, D. Z., Patanakul, P., & Srivannaboon, S. (2007). <i>Case studies in project, program, and organizational project
management</i>. Retrieved from http://ebookcentral.proquest.com
Created from uow on 2017-11-01 15:34:45.

ADDENDUM | © 2019 YOUNG RABBIT PTY LTD, AUSTRALIAN PACIFIC COLLEGE

BSB61218 ADVANCED DIPLOMA OF PROGRAM MANAGEMENT | PROGRAM RISK_V1.4