Risks

Evaluation of Projects

View of Managers

• compare Cost / Benefit / Risks

• flexibility: change direction or stuck with decision?

Evaluation of Projects

Overrun

Reasons for failures

projects are rarely failing because of Technology

Project Management Triple Constraints:

three “levers” to adapt project on the fly

• time (when do we want it?)

• cost (how much does it cost?)

• scope (what do we want?)

Problems of large projects:

Problems of projects with multiple stakeholders:

• "scope creep"
  • req. from one group incentivize req. from others
  • if cost is split, you don't want to pay an equal share if you receive less
  • they don’t challenge req. so they are not challenged back
  • from assumptions that req. are clear (i.e. everyone knows the req.)

Business Operational Risks

Example: UBS

• IPO (Initial Public Offering) of Facebook had UBS send requests again if no ACK came in

• bought more shares than planned

• drove up price as there was a "huge interest"

• sold back shares after noticing, driving prices down

• resulted in a 356$ million loss

Example: Goldman Sachs

• invested a lot in back-up infrastructure

• operating during Hurricane Sandy while other traders were down

• gained lots of money & customers

Example: Cyber Security

Cyber-Security

• Attacks will happen, you can only prepare for them

• reduce the attack surface
  • especially challenge convenience: wireless connections, …

• What are motives?
  • stealing valuable information
  • demanding ransom
  • indirect benefits (insider trading, disrupt stock moves, disrupt competitor sales)

Ramification Post-Breach

• company falling victim of a Cyber-Attack:
  • public relation worse
  • cost of legal fees & technical investigation
  • service disruption costs
  • hidden costs (i.e. increase in insurance fees)
  • …

Be Safe & Not Sorry, Prepare for them

Strategic Flexibility

Key inhibitors for technology

Vendor Dependency

• understand strategic relevance

• understand intent of supplier

• aim for partnership or vendor independence

• make smart make & buy decisions

• standardize processes & interfaces to allow easy swaps

• monitor performance

IT Complexity

• proactively manage tech landscape

• avoid business requirements of marginal value

• review software before sign-off

• invest in architecture clean-up project (reduce technical debt)

Lack of Skills

• encourage & support staff to build skills in strategic areas

• hire talent in relevant fields & let them learn about company & industry

Make | Buy

Supplier Strategy

Forward-Integration (grow into direction of customer)

Disintermediation (cut out middle-man)

Example: Cisco

Antitrust-Circumvention

Essential Facilities Doctrine

monopoly owning “a facility essential to competitors” needs to grant reasonable access to facility.

• You can't use the strong control to become strong in other markets

to evade the law, big players often allow small competitors to compete

• if they become too large, they go against it

Be Like Google & Facebook

Things Google Can Do

• Trends: what topis is researched in which community

• Analytics: which communities visit which sites

• Maps: where are traffic jams

• Where are people throughout day and night

• where do they work (by location data)

• analyze business of retailer

Things Facebook Can Do

• Who interacts how often with a certain person?

• Which topis trigger people to communicate with each other?

• how much time do users spend on which topic?

• Where are users using their mobile devices?