10.8 Exercises

Background:

TechCity, a fictional mid-sized retailer specializing in electronics and home appliances, is expanding its online presence to stay competitive. The company has decided to develop a new e-commerce platform to increase revenue and improve customer experience. The project involves creating a user-friendly website and mobile application with features such as personalized recommendations, seamless payment integration, inventory management, and advanced analytics for sales forecasting.

The project is led by the IT department in collaboration with the marketing and sales teams, external vendors, and a third-party software development company. The project has a timeline of 12 months and a budget of $1.5 million. The following major activities have been identified:

Activities:

1. Requirement Gathering (2 months):
   • Conduct stakeholder interviews and surveys to finalize the list of platform features.
   • Document functional and non-functional requirements.
   • Identify compliance and security requirements.
2. System Design (1 month):
   • Design the architecture for the platform, including frontend, backend, and database.
   • Create wireframes and mockups for user interfaces.
3. Development (5 months):
   • Develop the website and mobile application.
   • Integrate payment gateways, inventory systems, and third-party APIs.
   • Conduct code reviews and unit testing.
4. Testing and Quality Assurance (2 months):
   • Perform functional, integration, and security testing.
   • Conduct usability tests with internal and external stakeholders.
   • Address bugs and defects identified during testing.
5. Deployment (1 month):
   • Set up the production environment and deploy the platform.
   • Train employees and customer service staff.
   • Roll out the platform in phases to minimize disruptions.
6. Post-Deployment Monitoring (1 month):
   • Monitor platform performance and fix critical issues.
   • Collect customer feedback and plan for future updates.

Stakeholders:

1. Internal Stakeholders:
   • Project Sponsor: Chief Technology Officer (CTO).
   • Project Manager: IT Project Manager from TechCity.
   • Project Team: Software developers, UI/UX designers, system analysts, and QA testers.
   • Marketing Team: Responsible for branding and promotional campaigns.
   • Sales Team: Provides input on customer preferences and sales strategies.
2. External Stakeholders:
   • Third-Party Vendor: Develops payment gateway and inventory management integration.
   • Software Development Company: Responsible for coding and system development.
   • Customers: Provide input during usability testing.

Tasks and Questions:

Part 1: Identifying and Categorizing Risks

1. Risk Identification:
   • Identify at least five risks based on the project activities, stakeholders, and other potential internal and external factors. Ensure that there is at least one positive risk (opportunity).
2. Categorization:
   • Categorize each identified risk as either individual risks (impacting specific activities) or overall project risks (impacting the entire project).

Part 2: Assessing Probability and Impact

1. Risk Assessment:
   • Based on the provided project details, assess each identified risk’s probability (see Table 10.4.1) and impact (see Table 10.4.2 and 10.4.3).
2. Risk Register:
   • Create a table with the columns “risk ID,” “risk description,” “probability,” “impact,” and “severity score” (see Table 10.4.4).

Part 3: Developing Risk Response Strategies

1. Response to Negative Risks:
   • For the two highest-priority negative risks, propose response strategies using one or more of the following approaches:
     • Escalation
     • Avoidance
     • Transfer
     • Mitigation
     • Acceptance
2. Response to Positive Risks:
   • For a positive risk, propose response strategies using one or more of the following approaches:
     • Escalation
     • Exploitation
     • Sharing
     • Enhancing
     • Acceptance

Part 4: Establishing Contingency Reserves

1. Contingency Reserve:
   • Based on the severity scores and response strategies of these three risks, allocate contingency reserves.

Part 5: Post-Project Issues and Benefits

1. Post-Project Uncertainties:
   • Identify two post-project uncertainties (e.g., customer adoption of the platform and long-term maintenance costs). Suggest strategies to address these uncertainties during the planning phase.
2. Project Benefits:
   • List three tangible benefits and two intangible benefits.

Background:

A fictional agricultural start-up is launching its first urban vertical farming facility in Chicago. The facility will use hydroponics and AI-driven systems to grow fresh vegetables year-round, targeting local restaurants and grocery stores. The project aims to create a sustainable and scalable farming model that reduces water usage, minimizes transportation costs, and provides fresh produce to urban consumers.

The total project budget is $1.5 million, and the timeline is 12 months. The project is split into three main phases:

1. Facility Setup (Months 1-6): Construction of the vertical farming structure, installation of hydroponic systems, and integration of AI-driven monitoring tools.
2. Crop Testing and Optimization (Months 7-9): Testing different crop types and optimizing growth cycles.
3. Market Launch (Months 10-12): Partnering with local businesses, setting up delivery logistics, and launching marketing campaigns.

Key Details:

• Stakeholders:
  • Internal: Project team (agronomists, engineers, marketing professionals), company executives
  • External: Construction contractors, hydroponics suppliers, AI solution vendors, restaurant and grocery partners
• Potential Issues and Opportunities:
  • Delays in acquiring construction permits.
  • Unforeseen weather conditions that may cause delays during the facility setup.
  • The hydroponic supplier offers early delivery with a discount.
  • Higher-than-expected crop yields during the testing phase.
  • Resistance from local businesses to adopt urban farming produce.
  • Potential to save 20% on water usage compared to initial estimates.

Tasks and Questions

Part 1: Identifying Positive and Negative Risks

1. Identify three negative risks (threats) and three positive risks (opportunities) from the case study.
2. For each identified risk:
   • Describe its potential impact on the project.
   • Explain why it is categorized as a risk, not an issue or uncertainty.

Part 2: Distinguishing Positive Risks from Benefits

1. Identify two positive risks in the case study and explain how they can be exploited or enhanced during the project lifecycle.
2. Identify two benefits that the project aims to achieve after completion. Compare them with the positive risks identified in Question 1, explaining why benefits are not classified as risks.