IT-301 Project Management I: Unit 8: Risk Management

Agenda

• Unit 8 Risk Management

• Assignment Discussion

“Project Risk Management includes the processes of conducting risk management planning, identification, analysis, response planning, and monitoring and control on a project.

“The objectives of Project Risk Management are to increase the probability and impact of positive events, and decrease the probability and impact of negative events in the project.”

Project Management Institute (PMI) PMBOK, Project Management Body of Knowledge

Definition of Project Risk Management

One of the Biggest impediments to Risk Management:Some Stakeholders Think They Don’t Have Risks!

5 | Presentation Title | Month 2006

Risk Management in Application

• “For risk to happen once is understandable, since uncertain events can occur even on the best-managed projects.

• If the same risk occurs twice, that is unfortunate, because the chances should be less than the first time.

• But for a risk to happen a third time is unacceptable, as it exposes a lack of learning from the past.”

– Dr. David Hillson, Risk Doctor Limited www.risk-doctor.com

Unit 8: Risk Management• Planning Risk Management

• Deciding how to approach/plan activities related to the project

• Identify Risks• Documenting the risks that can occur for the project• (IF-EVENT-IMPACT-RESPONSE)

– Establish a risk register, responses, contingency, fallback– Tools: Risk Break Breakdown, List of Common Conditions, brainstorming, SWOT

Analysis

• Perform Qualitative Risk Analysis• Understanding effect of the risks on the project• Top Ten Impact Tracking, Probability/Impact

• Perform Quantitative Risk Analysis• Understanding the scope of the risks (prioritize for further analysis)

– Tools: Decision Trees, Monte Carol Simulation, Expected Monetary Value, etc.•

Unit 8: Risk Management• Plan Risk Responses

• Threat Responses: Avoid, Accept, Transfer, Mitigate• Opportunity Responses: Exploit, Share, Enhance, Accept

– Responses to risk may need to change as the situations surrounding the risk change

– Perform a Project S.W.O.T Analysis to understand your projects special needs– Establish triggers that prompt for evaluation of risk status and surrounding

project events or activities

• Monitor and Control Risks• Executing the planned responses• Review project performance information • Evaluate Change requests for risk/impact• Reviewing updates to overall project for risk• Reviewing other risks for impact to other risks

Strength Weakness

Opportunity Threat

Common Mistakes in Risk Management

• Risk Management Is Done at the Wrong Time • Risks are not properly named• Categories of risk are missed• Risk Qualification Takes too long• Team does not realize risk management can help prove the value

of project management (Effective Planning decrease project time and cost)

• Team does not realize there should be an action plan in place before the risk occurs

• Team wastes time by doing the wrong things while the project work is being done

• Project managers do not push back

Common Mistakes in Risk Management

• Teams forget to perform these monitor and control activities:– Revisit low ranking risk or non-critical risks to see if update needed to

response plan– Adjustments are done to deal with the severity of the actual risk– Look for any unexpected effects or consequences of risk events– Re-evaluate when the project deviates from the baseline– Update risk response plans– Updating the project plan when new risk plans are developed– Create a risk register or database for use through out the organization

Additional References

Risk Management, Tricks of the Trade®

for Project Managers book

PM Crash Course™ book

Common Risk Management Errors Online Workshop

Risk Management, Tricks of the Trade® for Project Managers

Online Course

Free Tricks and Tools at: www.rmcproject.com