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Program Semester Subject Code Subject Name Unit number Unit Title Lecture Number Lecture Title

: MBA : IV : PM0016 : Project Risk Management : 10 : Organisational Design and Project Risk : 10 : Organisational Design and Project Risk

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Unit-10 Organisational Design and Project Risk

Project Risk Audit


Objectives :
The objectives of this lecture are to:

Explain organisation design and its need. Identify and manage the needs and requirements of an organisation.

Assess all shortcomings in a project and plans.


Estimate the errors in the project and initiate rectification measures. Appreciate the importance and need for documentation.

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Unit-10 Organisational Design and Project Risk

Lecture Outline
Introduction

Organisational Design and Purpose


Organisational Design Services Management of Needs and Requirements Requirements Management Model

General Types of Requirements


Planning Shortcomings Estimation Errors Measures to Reduce Estimation Errors

Need for Documentation


Summary Check Your Learning Activity
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Unit-10 Organisational Design and Project Risk

Introduction
Organisational design is a formal guideline of development that brings together- people, information, and technology of an organisation. Organisational development matches the organisation structure as closely as possible to the organisation goal. With the help of design process, organisations aim to ensure that the collective efforts of the members lead to better handling of risks. Organisations adopt design process as an internal change under the guidance of an external channel.

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Unit-10 Organisational Design and Project Risk

Organisational Design and Purpose


Organisational design helps an organisation to enhance its processes and achieve the main goals successfully. Organisational design is implemented with the creation of a strategy. Organisational design strategy combines the objectives of the

organisation and motivates members to achieve desired outcomes.


The purpose of an organisations existence is the foundation for every act of its members.

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Unit-10 Organisational Design and Project Risk

Organisational Design Services


The organisational design services include: Understanding objectives of change and the environment in which it exists.

Understanding business activities of the organisation.


Suggesting new developmental models for processes and interfaces and utilising them for defining new structures, roles and relationships for offshore processes.

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Unit-10 Organisational Design and Project Risk

Management of Needs and Requirements


Requirement can be defined as a demand expressed and accepted by stakeholders of a project regarding the behaviour of the project. Requirements management is a process similar to risk management process. The benefits of using methods to manage requirements are as follows: Effectiveness and efficiency of the process increases. The ability to establish right goals for project organisation is established. The impact of changes required during the work is reduced. The consequences that these changes might have on the general design can be understood easily.
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Unit-10 Organisational Design and Project Risk

Requirements Management Model


Identifying stakeholders Gathering problems and needs Preparing and documenting requirements Checking requirements

Negotiating the requirements

Accepting the requirements


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Unit-10 Organisational Design and Project Risk

General Types of Requirements


The types of requirements that an organisation or a project could have are:

Business requirements.
Business user requirements. Functional requirements. System (Non-Functional) requirements.

Software requirements.

The characteristics of the requirements that are defined for the project or the organisation are:

Unambiguous.
Specific. Testable.
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Unit-10 Organisational Design and Project Risk

Planning Shortcomings
It is important to plan in advance for the shortcomings in a project. This reduces the project overheads.

The shortcomings that may occur in a project are: Change in project scope. Change in planning. Project visibility. Work environment. User involvement and management tools. Insufficient details on project strategy, project definition, value management, technology management. Linkage with programs and portfolios.

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Unit-10 Organisational Design and Project Risk

Estimation Errors
Estimation error is the error caused by observing a sample instead of the whole project.

Estimation is an important activity for projects.


The process of budgeting and planning is based on estimates. To reduce the risks arising from estimation errors, it is necessary to improve the systems and capacities of both project management and

quantitative estimation.
Project estimation can be carried out by either of the two estimations: Bottom-up estimation Top-down estimation

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Unit-10 Organisational Design and Project Risk

Measures to Reduce Estimation Errors


The following are the measures to reduce estimation errors: Keeping track of project uncertainty and risks.

Investing more in detailed planning.


Selecting estimators based on the number of projects that can be managed rather than on cumulative project management experience.

Tips to overcome the project estimation errors are: Confirm all assumptions. Do not expect trouble-free projects.

Specify exactly what estimates include.

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Unit-10 Organisational Design and Project Risk

Need for Documentation


Documentation helps to maintain the historic details of the project. Documentation helps to store the details of the methodologies followed

in a project, which can be used as a learning base for future projects.


In general, the following details of a project should be documented:

Basic usage of the project.


Listing all the techniques used in the project helps to achieve advance techniques. User interface.

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Unit-10 Organisational Design and Project Risk

Need for Documentation contd


Project documentation guides the project team and readers to:

Define the aim and background of the project.


Identify key deliverables and note milestone dates. Assess quality, scope, resources, risk, training, and cost. Document the technical parameters and technologies to be used.

Address the manner in which items are to be built or deployed.


Document any back-out or contingencies that could occur. Communicate progress and update stakeholders.

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Unit-10 Organisational Design and Project Risk

Summary
Organisational design provides guidelines to bring people, information and technology under a common base that is achieving a goal.

The requirements of a project are business requirements,


business user requirements, functional requirements, system requirements and software requirements.

Documentation serves as a source of knowledge for future projects.

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Unit-10 Organisational Design and Project Risk

Check Your Learning


1. What are the tips to overcome the project estimation errors? Ans: The tips to overcome the project estimation errors are: Confirm all assumptions.

Do not expect trouble-free projects.


Specify exactly what estimates include.

2. Mention any of the three shortcomings that may occur in a project. Ans: The shortcomings that may occur in a project are: Project visibility. Work environment. User involvement and management tools.

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Unit-10 Organisational Design and Project Risk

Activity
Assume that you are working for a Machine tools industry. Your industry has been offered a new project. You are appointed as

the project manager for this project. It is your responsibility


to prepare a project plan. What are the initial steps you would take to plan the project and what are the measures you would adopt to plan for possible risks?

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