Applying Contingency Reserves for Managing Uncertainties of Information Technology Projects

Abstract

Projects in modern days have a short duration and smaller number of project members because Project Managers tend to follow Rapid Application Development, Agile Development, and other methodologies. With this, risks such as inadequate planning of contingency reserve may be realized. In applying contingency reserve, a Project manager should determine Project Uncertainty profiles first, through quantification of Variance and Risks, before applying specific contingency reserve. This paper presents the types and sources of Project Uncertainty and how to manage them using Reserve Analysis methodology which includes Contingency Reserve for Variance and Risk. The Contingency Reserve provides funds for dealing with Risk Realization and Variance changes.