The City of New Westminster and Zyler Public Safety Solutions are collaborating to develop a system called FAVIM (Fire, Access, Video, Intrusion and Monitoring) systems. The Mayor and councilors strongly believe that FAVIM capabilities will provide the solution required for achieving its health, safety and wellness priorities. The capabilities include:

• Increasing safety with instant access to information
• Streamline operations with native (or free of charge) Integration
• Improve communication and collaboration
• Decreasing response time of protective services

The system can be installed in any building - public, commercial and residential.

Zyler Public Safety Solutions uses a project management practice for all multifunctional and collaborative projects. The practice has six phases:

1.Preliminary planning

2.Detailed Planning

3.Execution/Design selection

4.Prototyping

5.Testing/buyoff

6.Production

At the end of each life cycle phase, a phase review meeting will be held. Phase review meetings are formal meetings where the project team has demonstrated success following this methodology for managing projects. At the end of the second life cycle stage of this project, a meeting was held with the project manager (Juan) who is new to the project manager's role and sponsor (Frank).

The purpose of the meeting was to review and make the necessary adjustments to the detailed plan and identify any future problem areas that will require involvement by appropriate stakeholders. The following took place at the meeting.

The meeting

Sponsor: "I simply do not understand this document you sent me entitled "Risk Management Plan." All I see is work breakdown structures with work packages at level 5 of the WBS accompanied by almost 100 risk events. Why am I looking at more than 100 risks events? Furthermore, they are not categorized in any manner. Doesn't our project management methodology provide any guidance on how to do this?"

PM: "All of the risk events listed will impact the design of the final product. We must be sure we select the right design at the lowest risk. Unfortunately our project management methodology does not include any provisions or guidance on how to develop a risk management plan. Perhaps it should."

Sponsor: "I see no reason for an in-depth analysis of 100 or so risk events. That's too many. Where are the probabilities and expected outcomes or damages?"

PM:"My team will not be assigning probabilities or damages until we get closer to the prototype development. Some of these risk events may go away all together."

Sponsor:"Why spend all this time and money on risk identification if the risks can go away next month? You've spent too much money doing this. If you spend the same amount of money on all of the risk management steps, then we'll be way over budget."

PM:"We haven't looked at the other risk management steps yet, but I believe all of the remaining steps will require less than 10 percent of the budget we used for risk identification. We'll stay on the budget."

Answer the following questions:

1. What concerns you about the meeting
2. Assuming your team focused on three risks with probabilities of 10%, 50%, and 35%. If the first two risks occur, they will cost you $5,000 and $8,000; however, the third risk will give the company $10,000 if it occurs. What is the expected monetary value of these risk events and what does the figure mean to you