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Session 4
THE PMP® EXAMPREP COURSE
PMI, PMP and PMBOK are registered marks of the Project Management Institute, Inc.
Agenda
2
9:00 – 10:15 Practice the PMP Questions
10:15 – 10:30 Break
10:30 – 12:00 Human Resource Mangmnt (Pass the PMP® Exam, Ch. 7)
12:00 – 12:45 Lunch
12:45 – 2:15 Communications Mangmnt (Pass the PMP® Exam, Ch. 8)
2:15 – 2:30 Break
2:30 – 4:00 Risk Management (Pass the PMP® Exam, Ch. 9)
Practice the PMP Exam…
Chapters 7-8 the PMBOK® Guide (5 & 6 of the Pass
the PMP® Exam)
You have 50 questions
Mark each one as A, B, C, or D
You have 50 minutes to answer as many as possible –
in the exam you would have 1 hour
Good luck!
3
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HUMAN RESOURCE
MANAGEMENT
Chapter 7 of Pass the PMP® Exam
Chapter 9 of the PMBOK® Guide
Human Resource Management
One of the easier and shorter chapters in the PMBOK®
Guide
Define a role for everyone on the project
Define the responsibilities for each role
Develop a high performing team
6
Human Resource Management
Initiating Planning ExecutingMonitoring &
ControllingClosing
Project Management Process GroupsKnowledge
Area
Processes
• Plan Human
Resource
Management
• Acquire
Project Team
• Develop
Project Team
• Manage
Project Team
Project
Human
Resource
Management
7
Table 3-1. Project Management Process Groups and Knowledge Area MappingA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
8
.1 Inputs
.1 Project management plan
.2 Activity resource requirements
.3 Enterprise environmental factors
.4 Organisational process assets
.2 Tools and Techniques
.1 Organisation charts and position
descriptions
.2 Networking
.3 Organisational theory
.4 Expert judgment
.5 Meetings
.3 Outputs
.1 Human resource management plan
.1 Inputs
.1 Human resource management plan
.2 Enterprise environmental factors
.3 Organisational process assets
.2 Tools and Techniques
.1 Pre-assignment
.2 Negotiation
.3 Acquisition
.4 Virtual teams
.5 Multi-criteria decision analysis
.3 Outputs
.1 Project staff assignments
.2 Resource calendars
.3 Project management plan updates
Project Human Resource Management
9.1 Plan Human Resource Management 9.2 Acquire Project Team
.1 Inputs
.1 Human resource management plan
.2 Project staff assignments
.3 Resource calendars
.2 Tools and Techniques
.1 Interpersonal skills
.2 Training
.3 Team-building activities
.4 Ground rules
.5 Colocation
.6 Recognition and rewards
.7 Personnel assessment tools
.3 Outputs
.1 Team performance assessments
.2 Enterprise environmental factor updates
9.3 Develop Project Team
.1 Inputs
.1 Human resource management plan
.2 Project staff assignments
.3 Team performance assessments
.4 Issue log
.5 Work performance reports
.6 Organisational process assets
9.4 Manage Project Team
.2 Tools and Techniques
.1 Observation and
conversation
.2 Project performance
appraisals
.3 Conflict management
.4 Interpersonal skills
.3 Outputs
.1 Change requests
.2 Project management plan updates
.3 Project document updates
.4 Enterprise environmental factors
updates
.5 Organisational process assets
updates
Figure 9-1. Project Human Resource Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Plan Human Resource Management
9
Inputs Tools and Techniques Outputs
.1 Project management plan
.2 Activity resource
requirements
.3 Enterprise environmental
factors
.4 Organisational process
assets
.1 Organisation charts and
position descriptions
.2 Networking
.3 Organisational theory
.4 Expert judgment
.5 Meetings
.1 Human resource
management plan
Figure 9-1. Project Human Resource Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Human Resource Planning
Same as the others – start with planning!
Sets out how you will
– Staff
– Manage
– Team build
– Assess and
– Improve the project team
10
Terms You Need to Know
Types of organisation charts
Responsibility Assignment Matrix (RAM)
– RACI (a type of RAM)
Resource Histogram
11
Types of Organisation Charts
PM
Hierarchical-type
organisation chart
Matrix-based
responsibility chart
Text-oriented
format
RAMRole
Responsibilities
Authority
12
Responsibility Assignment Matrix
(RAM)
PersonRACI Chart
Ann Ben Carlos Betty TedActivity
A R I I IDefine
I A R C CDesign
I A R C CDevelop
A I I R ITest
R = Responsible A = Accountable C = Consult I = Inform
13
Resource Histogram
0
25
50
75
100
125
150
175
200
225
250
275
300
9 16 23 30 6 13 20 27 6 13 20 27 3 10 17 24 1 8 15 22
Staff Hours
for Senior
Designers
Jan Feb Mar Apr May
14
Resource Levelling?
Human Resource Management Plan
Roles and responsibilities of team members and key
stakeholders
Organisation and resource charts
Staffing management plan
– Where staff will come from and how you will release them
– Resource calendars
– Training needs
– Health and Safety requirements
– Motivation and reward methods
15
Acquire Project Team
16
Inputs Tools and Techniques Outputs
.1 Human resource
management plan
.2 Enterprise environmental
factors
.3 Organisational process assets
.1 Pre-assignment
.2 Negotiation
.3 Acquisition
.4 Virtual teams
.5 Multi-criteria decision analysis
.1 Project staff assignments
.2 Resource calendars
.3 Project management plan
updates
Figure 9-1. Project Human Resource Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Acquire Project Team
An executing process
Carries out the staffing management plan
Gets the right people working on the project
You may have to negotiate for your resources
Think back to types of organisations we have already covered and the challenges in getting your staff
17
Pre-Assignment
Normal for roles to be defined before resources
HOWEVER, sometimes specific resources are pre-assigned to fill a role
Can happen even before a project begins
– E.g. the Project Charter
18
Negotiation
Method to determine how scarce resources will be allocated
PM’s may have to negotiate both inside and outside the organisation
19
Acquisition
Do not confuse with ‘Acquire Project Team’
Refers to looking outside the organisation for resources i.e. advertising, recruitment, head hunting etc.
20
Types of project teams
Dedicated
– Full time, Projectised organisations, Good for the project
Part-time
– Functional or matrix organisations, focus is split
Partnership
– Team members from different organisations partnering for greater power
Virtual…
21
Virtual Teams
Group of people who may or may not see each other in person
Becoming more and more popular with evolution of technology
A good project manager must recognise the benefits and challenges of virtual teams
22
Multi-criteria decision analysis
The process of acquiring project team members can
take into account a variety of criteria to choose the right
people for the team
Criteria can include things like experience, expertise,
location, aptitude and aspirations
23
Project Staff Assignments
All team members should have a clear assignment, and
defined roles and responsibilities
24
Develop Project Team
25
Inputs Tools and Techniques Outputs
.1 Human resource
management plan
.2 Project staff assignments
.3 Resource calendars
.1 Interpersonal skills
.2 Training
.3 Team-building activities
.4 Ground rules
.5 Colocation
.6 Recognition and rewards
.7 Personnel assessment tools
.1 Team performance
assessments
.2 Enterprise environmental
factor updates
Figure 9-1. Project Human Resource Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Develop Project Team
It is the responsibility of the project manager to lead and
develop a high performing team
Building a sense of team and improving performance
Providing all the necessary training
Get the team to establish ground rules
Should be done early and often
26
Interpersonal Skills
1. Leadership
2. Ability to build teams
3. Motivate people
4. Communication skills
5. Influencing
6. Decision making
27
7. Political & cultural awareness
8. Negotiation skills
9. Trust
10.Conflict management
11.Coaching
Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Fifth Edition, Project
Management Institute Inc., 2013, Page 513.
Leadership Styles
What is your natural style of leadership?
– Directing
– Coaching
– Facilitating
– Supporting
28
Leadership Styles
Leadership
Style
Project Timeline
Autocratic
Participative
Early
Phases
Late
Phases
Directing Leader
Coaching Leader
Facilitating Leader
Supporting Leader
29
Forms of Power
Reward: The ability to give rewards and recognition
Expert: Increased credibility because of subject matter
expertise
These are considered the two most effective forms of
power according to the PMBOK® Guide
31
Forms of Power
Legitimate: Power based on position
Referent: Based on personal power of individual or
alignment with a more powerful individual
Punishment: Also known as coercive; the ability to
punish an employee. Considered by the PMBOK® Guide
to be the least effective form of power
32
Recognition and Rewards:
Theories of Motivation
Maslow’s Hierarchy of Needs
– Humans will want to fulfil the bottom needs first and
cannot fulfil higher needs until lower ones are fulfilled
Self-actualisation
Esteem
Acceptance
Security
Physiological
33
Self-fulfilment, growth, learning
Accomplishment, respect, appreciation
Love, affection, approval, association
Security, stability, safe
Need for air, water, food,
shelter, clothing
More on Maslow
The current need will always be the strongest motivator
Self-actualisation
Esteem
Acceptance
Security
Physiological
34
McGregor Theory X and Y
Assumes Managers see employees as either:
THEORY X
– Need constant supervision
– Don’t want to work
– Selfish
Tip to remember the difference: X has a cross face, Y has a happy face
THEORY Y
– Naturally motivated to do good
work
– Need little external motivation
– Trustworthy
35
Ouchi Theory Z
Focuses on increasing employee loyalty to the company
by providing a job for life with a strong focus on the well-
being of the employee, both on and off the job.
Theory Z management tends to promote stable
employment, high productivity, and high employee
morale and satisfaction
36
Fiedler’s Contingency Theory
Leader’s effectiveness contingent on two sets of factors
– Whether he or she is task-oriented or relationship-
oriented
– Whether the environment is stressful or calm
A task-oriented leader is more effective in stressful
situations
A relationship-oriented leader is more effective in calm
situations
37
Herzberg's Motivation-Hygiene Theory
Similar to Maslow
Hygiene Factors will not motivate, but their absence will
make staff unsatisfied
– E.g. Company policy, supervision, working conditions
Motivation Factors will motivate, but only if Hygiene
Factors are in place
– E.g. Achievement, work, responsibility, advancement
38
Vroom’s Expectancy Theory
The expectation of receiving a reward for a certain
accomplishment will motivate people to work harder
Only works if the accomplishment is perceived to be
achievable
39
McClelland's Human Motivation,
Achievement or Three Needs Theory
People need three things:
– Achievement
– Power
– Affiliation
Use these three needs to motivate employees
40
Tuckman 5 Stage Model of Team
Development
41
Time
Performance
Performing
Norming
Storming
Forming
Adjourning
Morris and Sashkin 6 step
decision making model
Did you read Appendix X3 of the PMBOK® Guide?
1. Problem definition
2. Problem solution generation
3. Ideas to action
4. Solution action planning
5. Solution evaluation planning
6. Evaluations of the outcome and process
NB: This slide is also here to show you we can’t cover
every possible topic but we do try.
42
Co-location rules!
If possible always put people within sight of each other.
Virtual teams challenge this
A war room is an example of co-location
43
Manage Project Team
44
Inputs Tools and Techniques Outputs
.1 Human resource
management plan
.2 Project staff assignments
.3 Team performance
assessments
.4 Issue log
.5 Work performance reports
.6 Organisational process
assets
.1 Observation and
conversation
.2 Project performance
appraisals
.3 Conflict management
.4 Interpersonal skills
.1 Change requests
.2 Project management plan
updates
.3 Project document updates
.4 Enterprise environmental
factors updates
.5 Organisational process
assets updates
Figure 9-1. Project Human Resource Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Manage Project Team
Executing process
Uses the Staffing Management Plan
Compares planned vs. actual
Proactively controls change
45
Observation & Conversation
What better way to manage the project team than by
observing them individually and as a team, and by
talking with them about how it is going?
46
Project Performance Appraisals
Give team members regular feedback about individual,
team and project performance.
47
Conflict Management
At least one exam question requires you to know these:
1. Problem Solving/Collaborate
2. Compromise/Reconcile
3. Force/Direct
4. Smoothing/Accommodate
5. Withdrawal/Avoiding
48
Problem Solving/Collaboration
Solve the actual problem
Incorporating multiple viewpoints if necessary
Best method according to the PMBOK® Guide
Confront the PROBLEM, not the PERSON
49
Compromise/Reconcile
Getting participants to search for solutions
Can be win-win
Can also be lose-lose
50
Force/Direct
Pushing one viewpoint on others
Worst method according to the PMBOK® Guide
Doesn’t help underlying problems; reduces team morale
51
Constructive Team Roles
Clarifiers
Harmonisers
Summarisers
Gate keepers
Initiators
Information seekers
Information givers
Encouragers
55
Destructive Team Roles
Topic jumpers
Dominators
Devil’s Advocates
Aggressors
Blockers
Withdrawers
Recognition seekers
56
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COMMUNICATIONS MANAGEMENT
Chapter 8 of Pass the PMP® Exam
Chapter 10 of the PMBOK® Guide
Communications Management
Project Management is all about
communication, communication,
communication!
It is the project manager’s most important skill
60
Communication
90% of a project manager’s time is spent
communicating
50% of that time is spent communicating with
the team
61
Communication
Project manager should not be in control of
every communication
Project manager should control the
communication process
62
Communications Management
Initiating Planning ExecutingMonitoring &
ControllingClosing
Project Management Process GroupsKnowledge
Area
Processes
• Plan
communications
management
• Manage
communications
• Control
communicationsProject
Communications
Management
63
Table 3-1. Project Management Process Groups and Knowledge Area MappingA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
64
Project Communications Management
.1 Inputs
.1 Project management plan
.2 Stakeholder register
.3 Enterprise environmental factors
.4 Organisational process assets
.2 Tools and Techniques
.1 Communication requirements analysis
.2 Communication technology
.3 Communication models
.4 Communication methods
.5 Meetings
.3 Outputs
.1 Communications management plan
.2 Project document updates
10.1 Plan Communications Management
.1 Inputs
.1 Communications management plan
.2 Work performance reports
.3 Enterprise environmental factors
.4 Organisational process assets
.2 Tools and Techniques
.1 Communication technology
.2 Communication models
.3 Communication methods
.4 Information management systems
.5 Performance reporting
.3 Outputs
.1 Project communications
.2 Project management plan updates
.3 Project documents updates
.4 Organisational process assets updates
10.2 Manage Communications
.1 Inputs
.1 Project management plan
.2 Project communications
.3 Issues log
.3 Work performance data
.4 Organisational process assets
.2 Tools and Techniques
.1 Information management systems
.2 Expert judgment
.3 Meetings
.3 Outputs
.1 Work performance information
.2 Change requests
.3 Project management plan updates
.4 Project documents updates
.5 Organisational process assets updates
10.3 Control Communications
Figure 10-1. Project Communications Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Plan Communication Management
65
Inputs Tools and Techniques Outputs
.1 Project management plan
.2 Stakeholder register
.3 Enterprise environmental
factors
.4 Organisational process assets
.1 Communication requirements
analysis
.2 Communication technology
.3 Communication models
.4 Communication methods
.5 Meetings
.1 Communications
management plan
.2 Project document updates
Figure 10-1. Project Communications Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Plan Communications
All about creating the communications management
plan
– How often and in what format communications will be
distributed and updated
– What information will be included
– Which stakeholders will receive them
66
Tools and techniques
.1 Communication requirements analysis
– Creating the communications register which guides all communications
.2 Communication technology
– Making appropriate choices to maximize the efficiency of communications
.3 Communication models
– Being aware of how communications works
.4 Communication methods
– Choosing the best method
67
Figure 10-1. Project Communications Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Communications technology
The particular type of communication technology you
choose to use to facilitate project communication is an
important consideration because each stakeholder will
respond differently to the technology chosen.
Remember that what works well for one stakeholder
may not work for another stakeholder.
68
Communications Channels
𝑛(𝑛 − 1)
2
4(4-1)/2
= 4*3/2
= 12/2
= 6
1
4 2
3
5 6
5(5-1)/2
= 5*4/2
= 20/2
= 10
21
5 3
4
6
8
7
9
10
69
Another Formula to Know
Number of communication channels
= 𝑛(𝑛−1)
2
i.e. 12 people (including yourself)
= 12(12−1)
2= 12(11)
2= 132
2= 66
There will be exam questions on this!
70
71
Inputs Tools and Techniques Outputs
.1 Communications
management plan
.2 Work performance reports
.3 Enterprise environmental
factors
.4 Organisational process
assets
.1 Communication technology
.2 Communication models
.3 Communication methods
.4 Information management
systems
.5 Performance reporting
.1 Project communications
.2 Project management plan
updates
.3 Project documents updates
.4 Organisational process
assets updates
Manage Communications
Figure 10-1. Project Communications Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Manage Communications
Execution of the communications management plan
Process where the bulk of the project communications
takes place
Updates stakeholders on project progress
72
Tools and techniques
.1 Communication technology
.2 Communication models
.3 Communication methods
.4 Information management systems
.5 Performance reporting
73
A Model for Communication
Encode
Decode
Sender
Message
Medium
Feedback - Message
Noise
Noise
Decode
Encode
Receiver
74
Terms to Know
Active Listening: taking active steps to ensure the
message was understood. Provides feedback to
indicate whether or not the message has been
understood
Effective Listening: similar to active listening, also
includes monitoring non-verbal and physical
communication
75
Terms to Know
Non-verbal: body language, posture, etc. Most
communication is non-verbal
Paralingual: vocal but not verbal, includes tone of voice,
pitch and volume – how the words are said rather than
what words are said
76
Methods of Communication
Method Examples
Informal written Emails, memoranda
Formal written Contracts, legal notices, project
documents
Informal verbal Meetings, discussions, phone calls,
conversations
Formal verbal Speeches, mass communications,
presentations
78
Other forms of communication
Effective meetings
Kick-off meeting
Wherever possible, face-to-face meetings are the best
choice for communicating with stakeholders
79
Performance reporting
Reports to the stakeholders how the project is
progressing against the plan
Uses a variety of methods and formats – must be
appropriate!
Includes text based, numerical, RAG, graphical, or
Gantt charts etc.
80
Control Communications
81
Inputs Tools and Techniques Outputs
.1 Project management plan
.2 Project communications
.3 Issues log
.4 Work performance data
.5 Organisational process assets
.1 Information management
systems
.2 Expert judgment
.3 Meetings
.1 Work performance information
.2 Change requests
.3 Project management plan
updates
.4 Project documents updates
.5 Organisational process assets
updates
Figure 10-1. Project Communications Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Control Communications
Work performance data: covers practically all aspects of
the project
Work performance information: variances and indices
(CV, SV, CPI, CPIC, and SPI) from last week
Budget forecasts: EAC or ETC from last week
83
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RISK MANAGEMENT
Chapter 9 of Pass the PMP® Exam
Chapter 11 of the PMBOK® Guide
Risk Management
Can be tough to get your head around
Will feature on the exam in a few different ways
All about planning and being proactive
Give this section extra attention
87
Some Tips
There are bad risks that negatively affect a project
There are good risks that positively affect the project
Risk is related to uncertainty
88
Risk Management
89
Initiating Planning ExecutingMonitoring &
ControllingClosing
Project Management Process GroupsKnowledge
Area
Processes
• Plan Risk
Management
• Identify Risks
• Perform
Qualitative
Risk Analysis
• Perform
Quantitative
Risk Analysis
• Plan Risk
Responses
• Control Risks
Project Risk
Management
Table 3-1. Project Management Process Groups and Knowledge Area MappingA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
90
Project Risk Management
.1 Inputs
.1 Project management plan
.2 Project charter
.3 Stakeholder register
.4 Enterprise environmental factors
.5 Organisational process assets
.2 Tools and Techniques
.1 Analytical techniques
.2 Expert judgment
.3 Meetings
.3 Outputs
.1 Risk management plan
11.1 Plan Risk Management
.1 Inputs
.1 Risk management plan
.2 Cost management plan
.3 Schedule management plan
.4 Quality management plan
.5 Human resource management plan
.6 Scope baseline
.7 Activity cost estimates
.8 Activity duration estimates
.9 Stakeholder register
.10 Project documents
.11 Procurement documents
.12 Enterprise environmental factors
.13 Organisational process assets
.2 Tools and Techniques
.1 Documentation reviews
.2 Information gathering techniques
.3 Checklist analysis
.4 Assumptions analysis
.5 Diagramming techniques
.6 SWOT analysis
.7 Expert judgment
.3 Outputs
.1 Risk register
11.2 Identify Risks
.1 Inputs
.1 Risk management plan
.2 Scope baseline
.3 Risk register
.4 Enterprise environmental factors
.5 Organisational process assets
.2 Tools and Techniques
.1 Risk probability and impact assessment
.2 Probability and impact matrix
.3 Risk data quality assessment
.4 Risk categorization
.5 Risk urgency assessment
.6 Expert judgment
.3 Outputs
.1 Project document updates
11.3 Perform Qualitative Risk Analysis
.1 Inputs
.1 Project management plan
.2 Risk register
.3 Work performance data
.5 Work performance reports
.2 Tools and Techniques
.1 Risk reassessment
.2 Risk audits
.3 Variance and trend analysis
.4 Technical performance measurement
.5 Reserve analysis
.6 Meetings
.3 Outputs
.1 Work performance information
.2 Change requests
.3 Project management plan updates
.4 Project document updates
.5 Organisational process assets updates
11.6 Control Risks
.1 Inputs
.1 Risk management plan
.2 Risk register
.2 Tools and Techniques
.1 Strategies for negative risks or threats
.2 Strategies for positive risks or opportunities
.3 Contingent response strategies
.4 Expert judgment
.3 Outputs
.1 Project management plan updates
.2 Project document updates
11.5 Plan Risk Responses
.1 Inputs
.1 Risk management plan
.2 Cost management plan
.3 Schedule management plan
.4 Risk register
.5 Enterprise environmental factors
.6 Organisational process assets
.2 Tools and Techniques
.1 Data gathering and representation techniques
.2 Quantitative risk analysis and modeling
techniques
.3 Expert judgment
.3 Outputs
.1 Project document updates
11.4 Perform Quantitative Risk Analysis
Figure 11-1. Project Risk Management
OverviewA Guide to the Project Management Body of Knowledge
(PMBOK® Guide) – Fifth Edition. ©2013 Project Management
Institute, Inc. All rights reserved
91
Inputs Tools and Techniques Outputs
.1 Project management
plan
.2 Project charter
.3 Stakeholder register
.4 Enterprise environmental
factors
.5 Organisational process
assets
.1 Analytical techniques
.2 Expert judgment
.3 Meetings
.1 Risk management plan
Plan Risk Management
Figure 11-1. Project Risk Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Plan Risk Management
Creation of risk management plan: the sole output
Output from here becomes input into the next processes
92
Risk Management Plan
May include a Risk Breakdown Structure (RBS)
At this stage, RBS does not identify specific risks! It
identifies categories of risks that will be evaluated
93
94
Project
Technical
Requirements
Technology
Complexity and
interfaces
Performances
and reliability
Quality
External
Subcontractors
and suppliers
Regulatory
Market
Customer
Weather
Organisational
Project
dependencies
Resources
Funding
Prioritisation
Project
Management
Estimating
Planning
Controlling
Communication
Risk Breakdown Structure
Risk Breakdown Structure
Lists the categories and sub-categories of potential risks
At this stage, may include references to specific
identified risks
Functions as a reminder of the many sources from
which risks may arise
Don't confuse this with the other RBS – the Resource
Breakdown Structure
95
Identify Risks
96
Inputs Tools and Techniques Outputs
.1 Risk management plan
.2 Cost management plan
.3 Schedule management plan
.4 Quality management plan
.5 Human resource management
plan
.6 Scope baseline
.7 Activity cost estimates
.8 Activity duration estimates
.9 Stakeholder register
.10 Project documents
.11 Procurement documents
.12 Enterprise environmental
factors
.13 Organisational process
assets
.1 Documentation reviews
.2 Information gathering
techniques
.3 Checklist analysis
.4 Assumptions analysis
.5 Diagramming techniques
.6 SWOT analysis
.7 Expert judgment
.1 Risk register
Figure 11-1. Project Risk Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Identify Risks
Identifying the risks that could impact the project
Identifying the nature and consequence of these risks
Just the one output – the risk register
Updates to the risk register feature as outputs for the
next three processes
97
The Watch List
The watch list is used for low order risks
If things change they may escalate to the risk register
98
Information Gathering Techniques
Diagramming techniques
– Ishikawa/fishbone/
cause-and-effect
– Influence diagrams
Show how one set
of factors may
influence another
– Flow charts
SWOT analysis
Delphi
Brainstorming
Expert interviews
Root cause identification
99
Perform Qualitative Risk Analysis
100
Inputs Tools and Techniques Outputs
.1 Risk management plan
.2 Scope baseline
.3 Risk register
.4 Enterprise environmental
factors
.5 Organisational process
assets
.1 Risk probability and impact
assessment
.2 Probability and impact matrix
.3 Risk data quality assessment
.4 Risk categorization
.5 Risk urgency assessment
.6 Expert judgment
.1 Project document updates
Figure 11-1. Project Risk Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Perform Qualitative Risk Analysis
Usually done rapidly on the project in order to determine
which risks are the highest priority
Takes each risk from the risk register and analyses
Probability (P) and Impact (I)
The risks with the highest combination of probability and
impact are the most important ones
101
Standardizing Qualitative
Assessments
102
Very low or 1 Low or 2 Moderate or 3 High or 4 Very High or 5
ScopeNo noticeable
change to scope
Minor changes to scope
Significant change to scope
Changes to scope
unacceptable to sponsor or
client
Changes the complete purpose
of the project
Time No noticeable change to time
Less than 10% increase in
time
10-20% increase in time
20-30% increase in
time
Great than 30% increase in time
Cost No noticeable change to cost
Less than 10% increase in
cost
10-20% increase in cost
20-30% increase in
cost
Great than 30% increase in cost
Probability and Impact Matrix
Shows the impact (ratio scale) on an objective (e.g.
cost, time, scope, quality)
Each risk is rated on probability and impact
Risk is scored as high, moderate or low according to
organisation's thresholds
103
Probability and Impact Matrix
104
0.90
0.70
0.50
0.30
0.10
0.045
0.035
0.025
0.015
0.005
0.05
0.09
0.07
0.05
0.03
0.01
0.10
0.18
.014
0.10
0.06
0.02
0.20
0.36
0.28
0.20
0.12
0.04
0.40
0.72
0.56
0.40
0.24
0.08
0.80
0.72
0.56
0.40
0.24
0.08
0.80
0.36
0.28
0.20
0.12
0.04
0.40
0.18
0.14
0.10
0.06
0.02
0.20
0.09
0.07
0.05
0.03
0.01
0.10
0.045
0.035
0.025
0.015
0.005
0.05Impact
Probability
Threats Opportunities
Some Other Tools & Techniques
Risk Data Quality Assessment: how accurate is your data?
Risk Urgency Assessment: how urgent is this risk?
105
Perform Quantitative Risk Analysis
106
Inputs Tools and Techniques Outputs
.1 Risk management plan
.2 Cost management plan
.3 Schedule management plan
.4 Risk register
.5 Enterprise environmental
factors
.6 Organisational process
assets
.1 Data gathering and
representation techniques
.2 Quantitative risk analysis and
modeling techniques
.3 Expert judgment
.1 Project document updates
Figure 11-1. Project Risk Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Perform Quantitative Risk Analysis
Make sure you know the difference!
Qualitative ranks them
Quantitative assigns a value (quantity) to them using
mathematical modelling and statistics
– Requires the prioritised list of risks from Qualitative,
so must be done second
107
Data Gathering & Representation
Interviewing: structured format for soliciting information
from experts
Expert Judgement: any form of input from experts
108
Quantitative Risk Analysis &
ModellingSensitivity Analysis: how sensitive is the project to risk?
Tornado Diagrams: which area of the project is most
sensitive to a given factor?
109
Quantitative Risk Analysis &
Modeling
Expected Monetary Value analysis: cost of event X
likelihood of event
– Often calculated with Decision Trees
Make sure you understand
how the diagrams on slide 126
and p.254 of the Pass the
PMP® Exam!
110
Decision Tree
Shows how to make a decision between alternative
strategies (decision nodes) when the environment
(chance nodes) is not known with certainty
You must understand the logic behind decision trees!
111
Example Decision Tree
112
Decision Definition
Decision to be made
Net Path Value
Computed:
(Payoffs minus Costs)
along Path
Decision Node
Input: Cost of each option
Output: Decision made (True, False)
Chance Node
Input: Scenario probability, reward if it occurs
Output: Expected monetary value (EMV)
Build or upgrade?
Build new plant
Upgrade
existing plant
EMV of the Decision Node
$49M
Strong demand
Weak demand
EMV of the Chance Node
$41.5M
Strong demand
Weak demand
EMV of the Chance Node
$49.0M
False
-$120
True
-$50
$10M
$70M
-$30M
$80M65%
$200
35%
$90
65%
$120
35%
$60
The organization chooses to upgrade the existing plant because that alternative has an Expected
Monetary Value (EMV) of $49M vs. the EMV of the build new plant option of $41.5M
Example Decision Tree
113
Build or upgrade?
Build new plant
-$120m
Upgrade
existing plant
-$50m
Strong demand
$200m
Weak demand
$90m
Strong demand
$120m
Weak demand
$60m
$200 - $120 = $80m65%
65%
35%
35%
$80m x 0.65 = $52m
$90 - $120 = -$30m
-$30m x 0.35 = -$10.5m
EMV = $52m + -$10.5m = $41.5m
EMV = $45.5m + $3.5m = $49m
$120 - $50 = $70M
$70m x 0.65 = $45.5m
$60 - $50 = $10M
$10m x 0.35 = $3.5m
The organization chooses to upgrade the existing plant because that alternative has an
Expected Monetary Value (EMV) of $49M vs. the EMV of the build new plant option of $41.5M
Decision Definition
Decision to be made
Net Path Value
Computed:
(Payoffs minus Costs)
along Path
Decision Node
Input: Cost of each option
Output: Decision made (True, False)
Chance Node
Input: Scenario probability, reward if it occurs
Output: Expected monetary value (EMV)
Plan Risk Responses
115
Inputs Tools and Techniques Outputs
.1 Risk management plan
.2 Risk register
.1 Strategies for negative risks
or threats
.2 Strategies for positive risks or
opportunities
.3 Contingent response
strategies
.4 Expert judgment
.1 Project management plan
updates
.2 Project document updates
Figure 11-1. Project Risk Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Plan Risk Responses
You have identified the risks, prioritised them, and
assigned a value to them
What do you do next logically?
116
Plan Risk Responses
You have identified the risks, prioritised them, and
assigned a value to them
What do you do next logically?
Proactively plan your response to each one
REMEMBER: Work to be done as part of risk responses
must be added to your project scope!
117
Risk Strategies
For Positive Risks
– Exploit
– Share
– Enhance
– Accept
For Negative Risks
– Avoid
– Transfer
– Mitigate
– Accept
Know the differences and when to use which
one
118
Strategies for Negative Risks
Avoid:
– Don't engage in the activity that could lead to the risk
– Avoidance is bad in communications, but not
necessarily in risk management
– Avoid risk of traffic on motorway by taking back roads
119
Strategies for Negative Risks
Mitigate:
– Lessen either the impact or the likelihood of the risk
– Hold an outdoor event in summer for less chance of
a snowstorm
– Build a house to certain specifications to lessen the
impact of a hurricane
121
Strategies for Positive Risks
Exploit:
– Attempt to remove uncertainty and make sure event
will happen
– If there's a risk that the project will be more profitable
than anticipated, make sure contributing factors are
identified and continued
122
Strategies for Positive Risks
Share:
– Improve chances of risk occurring by working with
another party
– Partner with a complementary vendor to respond to
an RFP
123
Strategies for Positive Risks
Enhance:
– Increase either the impact or the likelihood of the risk
– Increase risk of winning Lotto by buying more tickets
124
Strategy for Both
Accept:
– If cost or impact of response is greater than cost or
impact of risk, best strategy may be to accept it
– Cost of buying enough Lotto tickets to guarantee a
win is greater than the prize – don't buy Lotto tickets!
125
Contingencies and Workarounds
Workaround – temporary solution to get you through the
risk
Contingency plan, or Fallback plan – your plan to deal
with unforeseen risks triggered by pre-set conditions
126
127
Inputs Tools and Techniques Outputs
.1 Project management plan
.2 Risk register
.3 Work performance data
.4 Work performance reports
.1 Risk reassessment
.2 Risk audits
.3 Variance and trend analysis
.4 Technical performance
measurement
.5 Reserve analysis
.6 Meetings
.1 Work performance
information
.2 Change requests
.3 Project management plan
updates
.4 Project document updates
.5 Organisational process
assets updates
Control Risks
Figure 11-1. Project Risk Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved
Tools & Techniques
Risk Reassessment: reassess as often as necessary for
your project
Risk Audits: about Risk Management, not about
individual risks!
Variance and Trend Analysis: can highlight increasing or
decreasing likelihood of risk
129
Tools & Techniques
Technical Performance Measurement
– Looking at technical measures and understand variations – i.;
weight, transaction times, escaped defects, storage capacity.
Reserve Analysis
Meetings
130