Risk Assessment Tools and Techniques

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Course
Time
8 hours 25 minutes
Difficulty
Advanced
CEU/CPE
9
Video Transcription
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>> Let us talk about some assessment tools and techniques.
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We've talked about the fact that we
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need to identify our risks and
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we do that by looking
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at assets, threats, vulnerabilities.
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Once we know what our risks are,
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then the assessment piece as we've been
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talking about requires us to then
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analyze which basically use
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qualitative and/or quantitative analysis
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to determine a risk value,
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but let's talk about some of the tools that we
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can use that will help us along our way.
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A couple of different diagram types
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or facilitation techniques that we're going to look at,
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I'm going to just go ahead and jump right into
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them but you can see we've got a bowtie,
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decision tree, cause and effect.
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I do want to stress
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the importance of a business impact analysis;
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we'll do it when we get there,
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and then a SWOT and BCG analysis,
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all kinds of tools we can use.
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Let's start off with the bowtie analysis.
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You can see why this is called a bowtie.
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We've got five categories and right in
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the middle is the risk or the hazard,
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so we're going to call it the risk.
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In this case, we're worried about
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the potential for data corruption.
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Now, data corruption can
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come from a lot of different directions;
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a lot of different causes,
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so they've just listed three.
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The possibility is a malicious insider,
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accidental compromise,
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malicious external user,
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and there would be others: unreliable links,
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interference package dropped at route.
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There are all sorts of potential causes,
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but let's look at these three.
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We've got our data corruption in the middle and we
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spin off of that to give us the bowtie look,
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but you'll notice that the lines
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connecting data corruption to their causes
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under the category of
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control measures that's where
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we documents some mitigating strategies.
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Notice the mitigation is proactive on this side.
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We have reactive on
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the right side and then the consequences.
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Consequences are impact,
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the consequences equal impact.
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This is great to use when you're conducting
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your risk meetings, your brainstorming,
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your looking for risk scenarios to play out,
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maybe you're not thinking of the causes,
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or the consequences,
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or the various measures.
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This is a great way to bring your team together
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and look at risks and then brainstorm off of this,
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and that's really what a lot of
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these tools are going to be used for.
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Decision tree analysis for
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expected monetary value of risk.
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We've already talked about
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this idea of expected monetary value,
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and we talked about it back in
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the quantitative analysis piece.
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This is using a decision tree so that we can get the EMV.
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Now I want to remind you that expected monetary value;
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EMV, is a risk value.
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When I say I have an EMV of $51,500,
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that's the risk associated
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with activity or with endeavor A.
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B's expected monetary value is 26,000.
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C's expected monetary value is actually saving money,
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it looks like going with a description or
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opportunity C is going to save me $600.
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We take the expected monetary value
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and we look at that in relation
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to the costs of the contract.
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If you look at contract A it looks like
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contract A is only going to cost us
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$100,000, that's great.
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I'm going with contract A,
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it's cheaper than the others.
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Not so fast,
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we have to look at the value of risk associated.
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If I add the EMV to
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the cost already associated
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with doing business with vendor A,
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now I've got $151,500 that I'm likely to be paying them.
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I'm not going into this because we did talk about it
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with qualitative and quantitative analysis,
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what this decision tree does is it takes
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probability times impact of certain types of risks.
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If we look up at vendor A,
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there's a 70 percent chance that
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a negative event is going to happen costing $56,000.
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There's a 30 percent chance something good is
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going to happen where we save this 15,000.
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I'm just helping you
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interpret what's going on in this chart.
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This really shouldn't be something
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that you spend a ton of time on,
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it just wants you to understand what we're looking at.
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We're looking at the cost of
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the contract and then the risks
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associated with that particular vendor.
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If you look at the expected monetary value
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of all the risks,
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we're actually going to do better
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doing business with vendor C
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because vendor C even though
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they bid highest for the contract,
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their risk is negative meaning
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that we have an opportunity to gain some money;
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just 600 bucks, but the other two are going to have
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contracts over $150,000 by the time we factor in risk.
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Seeing this is a great graphic to help us
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visualize and help us
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look at the choices we have in relation to risk.
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Another tool that's really good with brainstorming,
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with facilitation of discussions,
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is cause-and-effect diagram.
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It's also called either a fishbone and you can see
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why the fishbone we see the backbone running through,
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and it can also be called an Ishikawa diagram.
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You could hear it called any of those.
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I'll tell you the truth, in my head
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I call it a fisherkawa.
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That way I can remember
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that the Ishikawa is the fishbone,
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and then if I picture the fishbone it
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makes sense that it's cause and effect.
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This is a great tool to
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get to the root cause of the problem.
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It's very easy to say, "Hey,
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we've got the threat of defects in
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our application," okay fair enough,
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"But let's go a little deeper."
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What's going to cause those defects? User error.
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Sure.
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The user not knowing how to use the software or the user
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having misconceptions or perceptions that are inaccurate.
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In our group we look at each defect,
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we talk about some root causes,
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and then we go even deeper.
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It's easy to say user error.
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Well, what types of user error?
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This is good to get to the root of the problem.
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As a matter of fact, they always associate this
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with root cause analysis.
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Now the SWOT.
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Strengths,
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weaknesses, opportunities, and threats.
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This is excellent to use at
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the beginning of projects when we're trying to
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do some high-level risk management
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and ultimately what we're
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trying to do is just figure out,
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is this a good project for us?
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Can we be successful? I don't know.
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Let's sit down, let's put pen to paper,
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and let's figure out what
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our strengths are as an organization.
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Here's what we do well.
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We have highly skilled technical team,
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we have deep resources,
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we have certified processes in place;
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those are our strengths,
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but now what are our weaknesses?
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Well, even though we're skilled
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in most technical realms,
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maybe we don't have a huge depth
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of experience in software development.
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What are the opportunities?
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Sometimes you'll hear people define
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opportunities as positive risks.
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I don't want you to think of that
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for this class because in
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this class risks are always going to be negative,
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but in a lot of project management areas
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risks can be positive or negative.
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If we're trying to
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estimate costs associated with the project,
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we just can't look at all the bad things that could
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happen because then our estimates are going to be skewed.
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We also want to consider opportunities.
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Opportunities, how would this project help us?
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Maybe it will help us increase our market share,
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it will enable business processes,
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and then of course the threats, what could go wrong.
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The idea is for risk analysis,
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for determination of what projects I'm going to take on,
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where I'm going to direct my money, my time,
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my efforts, a SWOT analysis is a great tool.
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The SWOT analysis goes with
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the BCG matrix which came to us from
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Boston Consulting Group and ultimately what this does is
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this allows us to look at
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our portfolio and look at the endeavors,
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the projects, the programs we've invested in,
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and to try to get a sense of how to move forward.
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There are some projects that we're going to drop,
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there are some that we're going to let sit on hold,
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there some that were going to invest a lot more money on.
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You don't need to memorize this for the exam,
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but you can see that if we look
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at this we're looking at it based on risk.
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What's their growth rate in the market?
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Do we have a market share,
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a high market share in relation to
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this particular project process.
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Whatever that we own in relation to this chart.
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You don't need to memorize star, question mark,
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cash cow, or dog. I love those terms.
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I do dislike the fact that the dog is
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a negative place to be in your portfolio.
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That poor sad dog just looks so unhappy, but man,
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the cash cow over here on the left,
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that cow is rolling in money.
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That's as happy a cow you're going to see,
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but ultimately what they help you do is look,
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how do we categorize our projects and
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programs in relation to these four categories?
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That will help us figure out how to move forward.
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