First Solar Plane Flight 19/04/2013

What is Project Risk? Project Risk is an uncertain event or condition that, if occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost and quality.

Some Risk ConditionsRisk conditions may include aspects of the projects or organizations environment that contributes to project risk:Immature project management practicesLack of integrated management systemsConcurrent multiple projectsDependency on external participants who are outside the direct project controlProject manager is too optimist

Positive RiskDefinition: Positive Risk Positive risk is the chance that your objectives will produce too much of a good thing. Positive risks are deemed as undesirable despite being positive at face valuePositive Risk As An Opportunity : Risk-taking is the process of accepting risk. Examples of risk-taking include investing, developing new products and changing business processes. Risk-taking is the basis of economic progress. It's often positive.

7*Risk Management ProcessRiskUncertain or chance events that planning can not overcome or control.Risk ManagementA proactive attempt to recognize and manage internal events and external threats that affect the likelihood of a projects success.What can go wrong (risk event).How to minimize the risk events impact (consequences).What can be done before an event occurs (anticipation).What to do when an event occurs (contingency plans).

7*The Risk Event GraphFIGURE 7.1

7*Risk Managements BenefitsA proactive rather than reactive approach.Reduces surprises and negative consequences.Prepares the project manager to take advantage of appropriate risks.Provides better control over the future.Improves chances of reaching project performance objectives within budget and on time.

7*The Risk Management ProcessFIGURE 7.2

7*Managing RiskStep 1: Risk IdentificationGenerate a list of possible risks through brainstorming, problem identification and risk profiling.Macro risks first, then specific eventsStep 2: Risk AssessmentScenario analysis for event probability and impactRisk assessment matrixFailure Mode and Effects Analysis (FMEA)Probability analysis Decision trees, NPV, and PERTSemiquantitative scenario analysis

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7*The Risk Breakdown Structure (RBS)FIGURE 7.3

7*Partial Risk Profile for Product Development ProjectFIGURE 7.4

7*Defined Conditions for Impact Scales of a Risk on Major Project Objectives (Examples for negative impacts only)FIGURE 7.5

7*Risk Assessment FormFIGURE 7.6Failure Mode and Effects Analysis (FMEA) Impact Probability Detection = Risk Value

7*Risk Severity MatrixFIGURE 7.7Failure Mode and Effects Analysis (FMEA) Impact Probability Detection = Risk Value

*RISK is an uncertain event or condition that could positively or negatively impact a project or its objectives. See chapter 11, page 310, of the PMBOK.

A positive risk is sometimes referred to as an opportunity.

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