Risk Management-2 [1]

7/30/2019 Risk Management-2 [1]

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Itisafactoflifethatchanceeventswilloccurandaffecttheoutcomeofproject


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Overviewof

Organization

Risks

CulturalI

ShortageofResources

Lowmorale

mp

a

ct Project

SpecificDaytoday ProjectDecisions

Customerrequirements

Probability


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Project Management

Integrat ionManagement

ScopeManagement

TimeManagement

CostManagement

QualityManagement

HumanResource

Communications Risk Procurement

anagemen

Procurement

Management Management Management

ManagementManagement


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y

Riskis

everywhere

!!!

y Fromdrivingacartoparachuting,itsinherentinthe

activities

we

choose.

y Withinaproject,riskareunplannedeventsorconditions

a

can

aveapos ve

or

nega ve

e ec

on

ssuccess.


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un amenta s

y at s s

y Riskisanuncertaineventorconditionthat ifitoccurshasaneffectonatleastoneprojectobjective.

y Requirements

y Assumptions

y Conditions

y RiskandIssue


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ProjectRiskManagementy

Positivesrisks

are

called

opportunities.

y Forprojectmanagers,riskcanmeanfailure,butthe

rewardcanmeanatimeorcostsavings,aswellasother

benefits.y s management st eprocess nw c t epro ect

managerandprojectteam:

,y analyzeandrankthem,and

y determinewhatactions,ifan ,needtobetakentoavertthesethreats


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FundamentalsContd..y Riskandtheassociatedcosttoaddresstherisk,variesover

theprojectlifecycle ,

impacty Forfinalphasethereislowchanceofriskevents,butcostimpactis

hi h

y Identifyingandmanagingriskswillgreatlyaffectproject

success


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DecisionMaking

y I ea Decisionma ingy Based

on

all

relevant

Information

y Basedonenvironmentofcertainty

Confidence/

NoRisk

y RealityinDecisionmakingy Most

of

time

incom lete

information

RISK/

y DegreeofUncertainty Opportunity

OrganizationalsurvivalintodaysworldisachievedbypursuingopportunitywithinthisspectrumofuncertaintyandProjectsaretypicallylaunchedtotakeadvantageoftheseopportunities.


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ow

ec s ons

re

a e

Whatistherelationship?


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Example:SanFranciscoBayBridgey

Beginning

2005 Decision

to

stop

construction

y Later2005 Decisionofcontinueconstructionbased

on

original

project

y Result:$81Mcostoverrun.WillbepaidbyCalifornia


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Fundamentals

contd..

,

y

y LossofRevenue

y Extensionof

Time

to

contractors

y Increaseincostoftheproject

y Engagementofresourcesforlongerduration

y Implementationof

alternative

solution

on

additional

cost


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s

rocess

y CanweidentifyallRisks?Yes/No

KnownUnknownRisks Proactive Risk

Management

UnknownUnknownRisks Reactive Contingency


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ProjectRiskManagementProcesses1.PlanRiskManagement:decidinghowtoapproachandplantherisk

managementactivitiesfortheproject

2.Identify

Risks

:determining

which

risks

are

likely

to

affect

a

project

anddocumentingthecharacteristicsofeach

3 Riskanalysis:prioritizingrisksforfurtheranalysisoraction basedbyassessingandcombiningtheirprobabilityofoccurrenceandimpact

.reducethreatstomeetingprojectobjectives

5.MonitorandControlRisks:theprocessofimplementingriskresponse

plans

,monitoring

identified

and

residual

risks,

identifying

newrisks,andevaluatingtheeffectivenessofriskstrategiesthroughoutthelifeoftheproject


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1.PlanRiskManagementy RiskManagementPlanningisaboutmakingdecisions.like

contractselection

,acquisition

etc.

y ThePlanRiskManagementprocessisdependentonthe

scopeof

the

project,

the

priority

of

the

project

within

the

,deliverables.

y Itsimportant

to

complete

Risk

Management

Planning

in

ordertosuccessfullymanage,planfor,analyze,and


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PlanRiskManagementProjectScopeStatement

Brainstorming

CostManagementPlanScheduleManagementPlan

Communication

RISKMANAGEMENTPLAN

OrganizationalProcessAssets

INPUT

Techniques OutPut


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RiskManagement

Plan

Theriskmanagementplanisresponsiblefordetermining:

y Howriskwillbeidentified

y How Riskanalysiswillbecompleted

y ow an s esponsesw appen

y Howriskswillbemonitored

y Howongoingriskmanagementactivitieswillhappen


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s

anagement

an..

y ItIncludesfollowings:

y

Methodology Approach

,

tools,

data

sources

y RolesandResponsibilitieslead,supportandteammembers

y Budgeting estimatesfunds,protocolforcontingency

reserve

y RiskCategories

y DefinitionofriskProbabilityandImpact

y RevisedStakeholders

tolerances.

y Reportingformats

y Tracking


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DefinitionofRiskProbabilityandImpact


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IdentifyRisk RISKREGISTER

y

Identify

Risks

is

the

process

of

identifying

the

risks

and

then

documentinghowtheirpresencecanaffecttheproject.

y Riskidentificationisaniterativeprocessandcanbe

completedbytheprojectmanager,theprojectteam,anda

.

y Insomeinstances,stakeholdersandevenpeopleoutsideof

theprojectcancompleteadditionalwavesofrisk

identification


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RiskIdentificationBasedonbutnotlimitedto:

y Scopestatement

y Budget

y

y Workbreakdownstructure

y

y Responsibilityassignmentmatrix


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RiskIdentification

Techniques

y

Reviewing

Project

Documentsy Gatherin Techni ues

y Interviewing

y DelhiTechnique

y

y Riskidentificationchecklists.

y Assumptionanalysis


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y Processforassessingeachriskeventtoestimatethe

,

interms

of

cost,

schedule

and

performance.

y Resultsinaprioritizedlistofidentifiedrisks,andadecisionto

furtheranalyze

high

priority

risks.

y ActivityDurationEstimates (PERTandCPM)

D=O+4m+P/6

D=duration,O=Optimistic,P=Pessimistic,m=MostLikely


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y Notallrisksneedtobesubjecttomonitoringandcontrol

y UseaScenarioAnalysis toassesstheriskeventimpact

y Determineallconsequencesandtheirseverityiftheeventhappens

y Identifywhen,duringtheproject,willtheeventlikelyhappen

y Determinehowdifficultitwillbetodetecttheeventoccurrence


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Rankrisksfromthosethatcanbe

elevatedvigilance

ARiskSeverityMatrixcanbePlotofeventprobabilityversusimpact

Redzoneidentifiesthemost

Yellowzonelistsrisksthataremoderatelyimportant

safelyignored

Notethatthezonesarenots mmetricalacrossthematrix

Highimpactlowprobabilityeventsmuchmoreimportantthanlikely

lowimpact

events


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s

esponse

ann ng

y Processofdevelopingoptions,anddeterminingactionsto

reducethreatstotheprojectsobjectives.

y Conductedbasedonresultsofriskanalysis

y Assignsriskstoriskowners

y Appliesresources

and

inserts

activities

into

Risk

Management

Plan.


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StrategiesforRisksy StrategyforNegativeRisks

y Avoid

y Transfer

y Mitigate

ra egy or os ve s s

y Exploit

y Enhance

y Acce t


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RiskMonitoring

and

Control

y Toconfirmriskresponsesareimplementedasplanned

y Todetermineifriskresponsesareeffectiveorifnewresponsesareneeded

y Todetermine

the

validity

of

the

project

assumptions

y Todetermineifriskexposurehaschanged,evolved,ordeclinedduetotrendsintheprojectprogression

y Tomonitorrisktriggers

y Tomonitortheprojectfornewrisks


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y Risksassociatedwiththetechnicalaspectsofaprojectcanhavet emostseveroutcomesy Can

be

mitigatedby

design

reviews

and

specifications

review

of

critical

components

y Risksassociatedwiththescheduleusuallyrequireatradeoffy

Manage

slack/float

time

to

provide

resources

for

delayed

components

y Risksassociatedwithcostsusuallyresultfromestimateerrorsandomissions

y Descopeoptions

that

remove

components

of

the

project,

but

still

allow

theprimarymissiontoproceed

y Allbud ets mass ower schedule cost shouldincludeareservepercentagethatcanbeexpendedasriskeventsoccur


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SuccessFactorsforRiskManagement

y EstablishaProjectmanagementmethodology.

y EstablishaformalRiskmanagementmethodology

y Assigntrainedriskmanagers.

yDevelop

trained

cross

functional

teams.

y Earlyinvolvementinfunctionalprocess


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