W9_Piero_Anticona_Strategic/Tactical Response for Risk/Opportunities in Public Point Estimates

1)    Step 1- Problem or Opportunity Statement

Most of Public Projects do not allow to add contingency to their budgets. Public Projects processes and plans to design and execute future assets are not different from private enterprises. Therefore, Public Projects are not exempt from risk and opportunities when executing project activities. When a risk or opportunity occurs sometimes an impact needs the best as you could predict, a tactical or strategical response.

What are best practices to a Risk Management Process that can help to implement the best strategical or tactical response to an event and especially that can adapt to Public Projects if we want a high confidence level of probability to meet project point estimates?

2)    Step 2 – Feasible Alternatives

Most common best practices are:

1.    Project Management Body of Knowledge (PMBOK) from Project Management Institute

2.    Total Cost Management Framework (TCM) from AACE International

We are going to add:

3.    Compendium and Reference (CaR) from Guild of Project Controls

The three of them offer Risk Management Process Maps. See maps below:

1.    PMBOK – PMI

PMI- Risk Management Process Map

2.    TCM – AACE International

TCM - Risk Management Process Map

3.    Guild of Project Controls

GPC - Risk Management Process Map

3)    Step 3- Develop the outcomes for each alternative
                As explained above, we need to determine which of the three offers better tools or techniques to respond to impacts when events occur.

We will analyze risk/opportunities response on strategies and tactics to treat risk/opportunities. What are the steps to implement a plan to treat risk/opportunities? Let’s see following lists:

Comparison of Tools and Techniques 

   

        For an effective analyze, we are going to eliminate those tools or techniques that are similar in the three groups. The main reason is that as they are similar, results will be the same for the three groups. So, it will not produce a differentiator between them which might not add value to the analysis. Also, Expert Judgement can be eliminated because as shown in the table above an individual or group of experts will produce the same responses as described in another item that will go for further analysis. 

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Eliminated items

        Therefore, we only are going to analyze the following list. TCM as all of the tool and techniques are similar to PMBOK and GPC is eliminated for the analysis.

Final Tools and Techniques for Analysis

To facilitate the analysis we are going to list the outcomes alternatives as follows:

1	PMBOK – Data Gathering	PMBOK-DG
2	PMBOK – Interpersonal and Team Skills	PMBOK-I&TS
3	PMBOK – Strategies for Threats/Opportunities Escalate	PMBOK-Escalate
4	PMBOK – Contingent Response Strategies	PMBOK-Contingent
5	PMBOK - Data Analysis	PMBOK-DA
6	PMBOK – Decision Making	PMBOK-DM
7	GPC – Buffer vs. Contingency	GPC-BvsCont
8	GPC – Decision Trees using EMV	GC-EMV

4)    Step 4- Selection of the acceptable criteria.

The following attributes will be considered for the selection criteria:
- Mandatory to Produce a Quantitative response
- It is possible to be assigned to project budget accounts
- Increase Probability to Meeting Point Estimates

5)    Step 5- Compare the outcomes from each alternative analysis done in Step 3 against the minimum acceptable criteria from Step 4.

              Using Multiattribute Decision Making, we will analyze as follows:

              

              Non Compensatory Models

1.    Dominance

Conclusion

     We can see that alternative GPC – BvsCont dominate others

2.    Satisficing

Conclusion

So far, the only alternative that meets all requirements is GPC Buffer vs Contingency. Alternatives PMBOK-DG,PMBOK-I&TS,PMBOK-Escalate,PMBOK-Contingent can be discarded.

3.    Lexicography

Conclusion

GPC BvsCont is better than GPC - EMV

Compensatory Models

1.    Non-Dimensional Escaling

Conclusion

The best choice is GPC – BvsCont

2.    The additive weighting technique

Conclusion

                      The best choice is GPC – BvsCont

6)    Step 6- Selection of the “best”.

      It is important for Public Projects to avoid cost overruns. For that reason, the best choice that meet all of the attribute criteria is GPC – Buffer vs Contingency as shown in the previous step. 5 positive results out of 5. 
          As Contingency is not allowed it can be hidden or create a buffer so it still complies public policies. In addition, it will help to increase probabilities to meet point estimates. 

7)    Step 7- How to plan on tracking/reporting on the recommended choice. 

A good recommendation for further analysis is to identify which of the three best practices can help to track better this alternative as part of the change management process.

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8)    REFERENCES.

H. Lance Stephenson. (2015). Total cost management framework: An Integrated Approach to Portfolio, Program, and Project Management (2nd Ed.). Morgantown, WV: AACE International. Page 201.

Guild of Project Controls. (2016, January 05). 04.5 risk_opportunity_responses_strategies_and_tactics_-_rev1.00. Retrieved September 15, 2018, from http://www.planningplanet.com/guild/gpccar/risk_opportunity_responses_strategies_and_tactics

A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 6th ed. Newton Square, Pa: Project Management Institute, Inc. 2017. 

Sullivan, W. G., Wicks, E. M., & Koelling, C. P. (2012). Decision making Considering Multiattributes. In Engineering Economy (15th ed.). Harlow, England: Pearson Education Limited.