| Risk Management and the Photogrammetric Project Manager
By Stanley C. Budhram and J. Edward Kunz Introduction
Although risks can open up avenues of opportunity, most people focus on the potentially negative aspects of risk on a project's cost or schedule.
Throughout the 1950s and 1960s, and even into the 1970s, most photogrammetric mapping companies were quite small. This handful of instrument companies took on small projects ranging in cost from $1,000 to $50,000. It was rare indeed for a photogrammetric firm to receive a $100,000 contract. Small companies, servicing mostly the engineering market, maintained low overhead and were able to obtain work and manage projects while containing risk.
In the 1980s and 1990s, the industry expanded exponentially from small, professional organizations to large, high-tech companies. However, these larger photogrammetric firms often clung to the old-style management techniques they had employed in the past. Many of these firms failed to recognize that, as the dollar-volume of contracts increased, so did the risk.
In the aforementioned environment where risk is a highly visible element, limited amounts of risk management were introduced into projects by project managers (PMs). The PMs who were unaccustomed to dealing with risks were unable to effectively quantify and manage them. They tended to handle risks as "new crises" and consequently scrambled to look after them. This type of risk management can be classified as the "fire fighter approach." Instead of anticipating potential risks and preparing contingency plans, the PMs dealt with the consequences of each problem as they developed. This reactive form of management-crisis management-can be both inefficient and ineffective, potentially leading to project failure. As a result of this crisis mentality, risks may not be fully understood within project management.
In today's higher risk environment, alternatives to the "fire fighter approach" of project management are imperative in order to preserve a project's profitability and a client's level of satisfaction.
The authors hereby suggest an alternative approach, one that is based on the Project Management Body of Knowledge (PMBOK) and identifies the following elements of the risk management process:
• Risk Identification
• Risk Quantification
• Risk Response Development
• Risk Response Control
The aim of this article is to introduce project managers and senior management personnel to the broad concepts of project risk management, and to motivate them to employ the risk management process in evaluating project risks and minimizing the negative impacts thereof. Risk Identification
Risk identification is a systematic way of examining the work breakdown structure (WBS) by listing every possible risk that the project could encounter. Some examples of risk identification in a typical digital orthophoto photogrammetric mapping project include the following:
• Poor-quality project planning
• Misidentification of project boundaries
• Incorrect number of control points
• Incorrect number of flight lines
• Improper photography negative scale
• Incorrect assumptions of available resources versus project schedule
• Poor-quality geodetic control
• Incorrect values for ground control points
• Insufficient number of ground control points
• Improper placement and/or inadequate density of control points
• Poor-quality aerial photography
• Improper aerial photography negative scale
• Insufficient aerial photography coverage of the project area
• Unacceptable cloud cover or other environmental factors
• Unacceptable photographic blemishes
• Excessive crab
• Excessive tilt
• Poor-quality scans
• Scanning at the incorrect resolution
• Poor aerial triangulation (AT) solution
• Incorrect or insufficient digital terrain or digital elevation models (DTM/DEM)
• Poor-quality digital orthophoto imagery
• Poor tonal balance
• Visible seams
• Incorrect file delivery format
• Incorrect data projection
• Incorrect delivery media
At a minimum, risks must be identified, including where the risks originate-whether internal or external-at various key points in a project. At this stage, the PM is not yet attempting to quantify the risk or impose a dollar value on certain types of risk. He or she is only listing as many potential risk items as can be determined. It should be noted that many risk items affect other production steps that follow. For example, an incorrect number of flight lines generated in the project-planning phase will affect all phases that come later. Risk Quantification
Risk quantification is the most common technique used to assess potential risk. It involves assigning probability, cost and duration to risk. This technique is used because risk involves uncertainty. A simple probability model that may be employed is the normal distribution curve.
This can be illustrated as follows. Since PMs may state that there is a 98 percent chance that flight planning will be correct, or that there is a 95 percent chance of the flight being completed within a four-week window of opportunity, one can use an average of the two to assign a probability of risk.
After this probability of risk has been assigned, the project's cost and/or duration must be determined. For example, if the cost of the flight planning is $75,000-including by inference the cost of aerial photos, ground control and/or airborne GPS, and/or IMU-and there is a two percent probability that it may be incorrect, then the immediate risk is calculated to be $1,500. If the cost of the flight is $75,000 and there is a 95 percent probability that the schedule will be met, then the risk is $3,750.
The flight-planning risk example noted above assumes that the cost of an error in flight planning affects only those project tasks so listed. In reality, an incorrect flight plan can affect all succeeding tasks, including creation of digital elevation models, generation of planimetric features, and so on. It is important to note that, as tasks are added to a contract, risks are also likely to increase. Risk Response Development
After risks have been identified and quantified, the PM should engage in risk response development. It must be determined if risks are to be addressed immediately, or instead at a later time. In some cases, negative consequences from risks that are deferred until later will actually increase. For example, if the assumption is that a project area does not have full photographic coverage due to a missing flight line, the longer it takes to determine and correct this error, the higher is the risk for cost overrun, schedule slippage, and possible project failure.
The PM's role in risk response development is generally that of an advisor. He or she may be asked by senior managers to answer such questions as, "Should the project proceed as is and the potential problem be dealt with at a later date?" or, "Should the project be stopped and the error corrected?"
The project manager must be equipped with the tools necessary to provide the sort of advice required by senior management. These would include the knowledge of scheduling software such as Microsoft Project, the ability to graphically illustrate the impact of re-flights on the project schedule, access to and knowledge of spreadsheet software, and the ability to numerically illustrate the potential financial impact of dealing with the problem at a later date. Risk Response Control
The next step in the risk management process is risk response control, of which there are three main goals:
• Elimination of Risks (Aerial photography example)
• Reduction of Risks (Vigorous quality control, traceable shipping)
• Passing on of Risks (Sub-contracting)
For example, the addition of a trusted sub-contractor to a proposal response can serve all three purposes of risk elimination, risk reduction, and the passing on of risks. A sub-contractor may be more efficient and effective at producing a specific piece of a product than is one's own organization, and may also assume the liability for producing that part of the product.
Some theoreticians believe that the ultimate goal of any organization should be to totally eliminate risk. However, total elimination of risk is only a theoretical concept. All business ventures have risk associated with them, no matter what precautions have been taken. It is dangerous to confuse the reduction of risk with the elimination of risk. For example, an organization's risk may appear to be eliminated in the production of aerial photography products because the aerial photography firm employed to capture aerial imagery has assumed liability for production of the final aerial photography product, the film. However, risk still exists based on the fact that one's organization has provided the aerial photography firm with the photography coverage area. This coverage area contains a certain amount of risk of being incorrect. This outside firm cannot be held liable for providing an incorrect photography coverage area. Risk also exists when the aerial photography firm fails to provide acceptable photography. Even though it is responsible for the quality of the end-product the fact remains that, without high-quality aerial photography, no work can be accomplished and both organizations suffer the consequences.
While many photogrammetry companies have excellent quality-control measures for reducing risk in their production processes, a PM should not automatically assume that the final product is error-free. Project managers should have the knowledge and resources available to complete quality-control checks on the products being produced for their clients. However, PMs cannot spend all of their time completing quality-control data checks.
Some methods of quality control might include the use of desktop mapping software such as ArcView or MapInfo to view selected imagery and mapping features for completeness and adherence to contract specifications. The PM may also wish to examine quantitative and qualitative aspects of the aerial-photo products before production begins.
This direct examination of mapping products by the PM provides an additional level of quality control that can enhance customer satisfaction with the final product, provide the PM with experience working directly with the data, and reduce risk.
The PM can provide quality-control reports directly to the client as a means of enhancing communication and building trust. PMs are also responsible for ensuring that all required products are received in good condition by the customer, and within the required timeframe.
To mitigate the risk of project products being misrouted, damaged in transit, lost by the customer, or delivered late, we recommend the following shipping procedures:
• Utilizing a traceable method such as UPS, FedEx, Airborne, etc.
• Including the letter of transmittal inside the shipping package, with a copy placed in the project folder
• Following up with the delivery service to ensure receipt of the item, with documentation of the receipt placed in the project folder
• Asking the client to provide written acknowledgment of the receipt of delivery, with copies of this acknowledgement placed in the project folder.
Another method of risk response control is the passing on of risks. A common example involves the sub-contracting of aerial photography survey control. Some mapping companies do not have the capital, expertise, required knowledge of the region to be mapped, or the willingness to accept the risk of competing in the aerial photography survey-control business. Thus they sub-contract collection of aerial photography survey control to firms whose exclusive business is the acquisition of survey data, including aerial photography survey control. In most instances, survey control is sub-contracted to a firm located in or near the region to be mapped. This serves a dual purpose of passing the risk of collecting data on to another firm, and also of instantly eliminating the risk of sending surveyors into the field who may not be knowledgeable of the geography of the region that is to be mapped.
It is important to note that a risk still exists where the surveying firm may fail to provide acceptable aerial photography survey-control data. Even though the surveying firm is responsible for the quality of the end-product - the control data - the fact remains that, without high-quality aerial photography survey-control data, no work can be accomplished and both organizations suffer the consequences. Summary
Risk surrounds all aspects of life, including business projects. One must therefore confront it, analyze it, quantify it, and determine whether to avoid it, pass it on, or minimize it. Use of a risk management model, including risk identification, quantification, response development and response control, is vitally important to a project's success.
Effective project managers may be in place within an organization, but they and their senior managers must ask themselves the question, "Do we, based upon the risk management model, have the skills and the necessary tools (including both hardware and software) to effectively perform all required risk management tasks?" About the Authors:
Stanley C. Budhram is a senior project manager with BAE SYSTEMS ADR. He may be contacted via e-mail at [email protected].
J. Edward Kunz is a proposal manager with BAE SYSTEMS ADR. He may be contacted via e-mail at [email protected]. Back |
