Internal Information Services

1. Risk Management Team Gay Infanti Northrop Grumman 8 February 2005 Internal Information Services

2. Agenda • Review team core members/contributors and accomplishments of RM Working Group • Review the RM working group’s conclusions/recommendations • Recommend where we should go from here

3. Core Membership, RM Team #1 - Government • David Bachman, Defense Acquisition University • Ivan Bembers, NGA • Gary Christle, Center for Naval Analysis • James Gordon, NRO • Jim Henderson, NAVAIR and NASA • John Hogrebe, NAVAIR • Dr. Steve Van Drew, NAVAIR • Kathy Llewellyn, USN • Deborah Tomsic, OUSD (AT&L)/ARA/AM • Wilma Uribe, DCMA Headquarters

4. Core Membership, RM Team #1 - Industry • Gay Infanti, Northrop Grumman, Team Leader • Gene Adams, Northrop Grumman Corporation • Wayne Abba, Abba Consulting • Dick Coleman, Northrop Grumman Corporation • John Driessnack, MCR • Craig Peterson, The Mitre Corporation

5. Summary of Accomplishments • Shared theories/best practices among the team and with NDIA PMSC • Conducted survey to determine current state of process integration among industry and Government program management, business management, and risk management communities • Results briefed at April 2004 NDIA PMSC • Results also presented in three IPM conference workshops (Fall 2003, Spring and Fall 2004) • Published paper summarizing results, conclusions, recommendations and a business case for change • NDIA Website • Acquisition Community Connection, Risk Management CoP, at http://acc.dau.mil/simplify/ev.php?ID=62735_201&ID2=DO_TOPIC

6. Conclusions • Programs will benefit from the integration of RM with EVM • While some PMs already integrate these processes, there are improvement opportunities • There are many barriers to effective process integration that must first be overcome

7. The Business Case • Spending a little extra on integrating processes and tools will save a lot in replanning and rework, which drive up product cost and extend program schedules • Anticipated savings will also result from identification of opportunities, allowing management to take advantage of them to offset cost impacts and late deliveries • Customer goodwill will increase as result of improved program visibility/insight, communications, and credibility (no surprises) • Downside of non-integration would be: • Management reserves insufficient to cover risks • Budget and responsibility for risk handling not built into B/L • Risks missed or incorrectly handled • Risks, newly identified through the variance analysis process, not addressed in the RM process • Risk reserves allocated without regard to severity of risk or, worse, for scope creep resulting in poor ROI • Understated EACs

8. Recommendations • Recommendations arising from team discussions and survey results fell into three categories: • Training • Policy • Process • Recommendations comprise a candidate list of topics for action by the RM working group during its next phase • Follow-on team should develop its charter, for the next phase of this effort, from this candidate list and present it to the NDIA PMSC at a subsequent meeting

9. Training • Training improvement required to overcome • Barriers associated with lack of process maturity and lack of knowledge/skills needed to achieve process integration • Perception that EVM is a financial tool, rather than a PM tool; when properly used EVM provides realistic information for management decision-making • Training needed to improve understanding of the benefits available from RM and EVM integration • Training curriculum should address both EVM and RM training, as core PM processes, and both should reside in the PM curriculum • Training should also include techniques and tools for achieving process integration • NDIA PMSC should consider partnering with DAU to cooperatively develop solutions in response to team recommendations

10. Policy • Policy changes, along with implementing guidance will help remove several barriers to integration once benefits of policy-driven changes are realized • Lack of management commitment • Internal/external culture • Emotional • A candidate list of existing policies and guidelines that could be modified to address process integration, as well as potential new policy/guidance, is presented for potential consideration and action in further phases of this effort

11. Process • A major barrier to process integration is organizational – RM and EVM usually have different process owners and different process champions • Organizational boundaries must be overcome to achieve successful integration • Recommend that NDIA PMSC, representing the EVM community, reach out and partner with other communities to create the demand for process integration through cross-functional cooperation

12. Proposed Next Steps • NDIA PMSC establish a follow-on team (working group) while interest/momentum are high • Sign up members for follow-on team - see next slide for those already committed to participate • NDIA PMSC task the follow-on team to develop a charter, execution plan and schedule for the next phase of this effort and report to NDIA PMSC at Spring meeting • NDIA continue to promote integrated program management through activities like this RM WG, e.g., chartering other process integration teams (cost estimating, system engineering, have been suggested)

13. Team #2 Membership • Team #1 members who have already committed to membership in team #2 • Gay Infanti, Northrop Grumman (Team Lead) • Wayne Abba, Abba Consulting • Gene Adams, Northrop Grumman • Ivan Bembers, NGA • Dick Coleman, Northrop Grumman • John Driessnack, MCR (Co-Lead) • Craig Peterson, MITRE and PMI Risk SIG • Deborah Tomsic, OUSD (AT&L)/ARA/AM • Wilma Uribe, HQ DCMA • Dr. Steve Van Drew, NAVAIR • Other members are needed; anyone else wishing to join the new team would be welcome and should contact Gay Infanti to sign up • Email: gay.infanti@ngc.com • Phone: (714) 840-6078