Management Challenges - Case Study on an External-Unpredictable Risk

Abstract

GRAMMAR coordinated by DLR represents a highly innovative EU-funded research project aiming at developing a prototype Global Navigation Satellite Systems receiver using a single chip dual frequency front-end. The prototype is targeted at mass market applications, with the widest potential exploitation. Within the two year project duration and a firm fixed budget, we planned to manufacture three chips to mitigate the risks involved in developing a chip (quality, time, costs). Unfortunately, the project was hit by the financial crisis in an unexpected way: The dates for chip manufacturing were delayed for several months by the external manufacturer. This was an external-unpredictable risk. At the same time, the identified risk of a non-functional chip occurred. What next? First, the project management team investigated the impact of the two risks on the project goals and constraints and updated the risk register. Second, we developed alternative solutions which are reduced scope to accept risk, change scope to mitigate risk, or change schedule to mitigate risk. Third, we evaluated the consequences of the alternative solutions. Our conclusion was that the most favorable solution is a project extension. Fourth, we prewired with the sponsor and stakeholders on the solutions and discussed further steps. We reached consensus with the stakeholders to go for a project extension. This resulted in executing a formal change process as a fifth step. Outcome: The project extension by six months was approved by the sponsor without change of scope, budget, and quality but significantly reducing the risks.