|Forum Home > Program Management Professional (PgMP) > About Program risk analysis (ref. SPM V3 page 98) what is the role of project objectives in this stage ?|
First of all, it's a very good example to see how PMBOk best practices comes into picture in the program management. Its very important for PgMP certification aspirants to connect SPM with PMBok. In reality, project managers may have a direct / dotted line reporting relationship with program managers. Hence its important for program managers to understand the challenges involved in project level and analyse it within the program management context. This thought process will be tested in the exam also. So, it is expected every PgMP aspirant should read PMBok in the program management context.
Also, in SPM there are lots of direct references to PMBok in summary wherever the term "Component projects / projects" present in SPM then directly PMBok best practices comes into picture there hence one should know clearly how to link PMBOk, SPM clearly.
Basically there are several factors / concepts we have to see in a coordinated way when we discuss about this statement:
At a minimum below points to be taken into consideration:
1. Project Objectives - The reason why that project was undertaken by that organization.
2. Project Cost estimation - Basically "cost estimates" in project are performed by activitiy based estimates.
Project estimated cost + Reserves (Contingency reserves + management reserves) = Project budget
3. Role of Cost estimation in project objectives
The success of project is measured based on the project meeting its objectives. This will be done by certain acceptance criteria which are related to the objectives.
Some of which could be meeting the requirements, within schedule, within cost etc.
4. Risks & its involvement in cost estimates
During quantitative Risks analysis process the "known risks" are used to measure "Contingency reserves". This will be done through Expected monetary value (EMV) process by doing cost of risk = Impact X Probability.
Once contingency reserves are identified then management reserves "unknown risks" are calculated.
So overall cost of risks = Contingency reserves + Management reserves
5. Program risks with respect to program cost estimates
Project risks are identified within the respective projects & respective cost factors are also calculated.
Similarly, When it comes to program level risks, there will be risks which span across multiple component projects due to interdependency factors etc. and those risks are treated as "program risks" and the associated contingency & management reserves are also identified in program level to respond those risks in program level.
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