program and portfolio risk management
TRANSCRIPT
Program / Portfolio RISK Management
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 2
About RiskGap.com
Online Risk Management tool
• Full Risk Lifecycle support
• Risk Knowledge Bases
• ISO 31000, ISO 21500, PMI
Standards
• Webinars + Professional Community
• Expert ratings
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 3
About Speaker
Dr. Alexander Pavlov
• PhD, PMI PMP, IPMA CPM, Prime
• 30 yrs. experience in Project, Program and Portfolio
management at IBM, Nuclear industry and
Government.
• VP at Project Management Institute (PMI®) National
Chapter (2005-2007), Founder of Alexander Pavlov
Project Management School.
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 4
29th of June Webinar Content:
• Principle difference between portfolio, program
and project risk management.
• Risk negative influence on portfolio, program
and project
• What is a balance between risk tolerance and
avoidance ?
• How program component delay affecting
benefits delivery ?
• Practical recommendations on portfolio,
program and project risk management.
• Program & Portfolio Risk Management
Automation
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 5
Principle difference between portfolio,
program and project risk management
Risk definitions following PMI® Standards:
Portfolio Risk is an uncertain event or condition that , if it is occurs, has a
positive or negative effect on one or more portfolio strategic goals
Program Risk is an uncertain event or condition that , if it is occurs, has a
positive or negative effect on one or more program benefits
Project Risk is an uncertain event or condition that , if it is occurs, has a
positive or negative effect on one or more project objectives
such as scope, schedule, cost or quality
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 6
Risk negative influence
on portfolio, program and project
Innovation Level Project Program Portfolio
GoalSolution
of Tactical Task
Solution
of Complex Problem
Business
excellence achievement
Negative Risk Influence
• Failure of the timing
• Budget overruns
• Dissatisfaction of the customer
Loss benefits Loss to competitors
Negative Risk Influence
Result
• Stop project
• Loss of a customer
• Loss of income and profit
• Decline in market share
Liquidation of the Company
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 7
Practical recommendations
on portfolio risk management
• Portfolio risk response methods should be consistent with the strategy of
the organization but to be applicable to the components of the portfolio
• Portfolio risk response methods should reflect a balance between the level
of tolerance for risk and their adoption on the one hand, and the need of
risks avoidance on the other hand. This balance must meet the
organization's strategy
• If the company goes to market, she is usually forced to take risks and if
working for a long time – does not want to risk
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 8
Responding to the risks of the portfolio
during the Life Cycle of the Company
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 9
What is a balance between risk tolerance
and avoidance ?
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 10
Practical recommendations on portfolio risk
management: Portfolio Bubble Diagram
Bubbles are projects inside
the portfolio.
Projects negative risks
influence is growing throw
bubbles color: yellow color -
low, green – medium, red –
high negative risk influence.
Figures are budgets of
portfolio projects.
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 11
Practical recommendations on portfolio
risk management: Portfolio Bubble
Diagram
Following common approach for
balancing portfolio we need to put
diagonal from upper left to lower
right corner of the bubble diagram.
The result says that the projects that
are in the lower left corner need to
be removed from the portfolio.
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 12
Practical recommendations on portfolio
risk management: Portfolio Bubble
Diagram
Deleting a component in the
result of the balancing of the
portfolio leads to
reallocation of resources and
the absorption component
with the emergence of new
risks.
The red arrows show the new
risks influence on portfolio
components
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 13
Practical recommendations
on program risk management
• In the analysis and choice of the program risk response methods a top
priority should be the goals of the program, i.e. the business benefits of the
organization. For example, it may be appropriate to slow pace of work of
one of the components of the program and transfer its resources to another
component, where the benefits to the organization can be obtained faster!
• The mutual dependencies of the components have a significant impact on
the program schedule. For example, delays in obtaining results of one
component which are required for the other component of the program may
lead to failure of terms of the whole program
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 14
Practical recommendations
on program risk management
• The final results of the program very often can not
be obtained in time, as the integration of all
components of the program could not be
conducted due to the lack of results of some
components
• Delays in the timing of any component of the program (both projects and
operational activities) may lead to lost profit in the business of the company
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 15
Program Life Cycle Phases
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 16
How program component delay affecting
benefits delivery ?
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 17
Profit loss (^$) and Time loss (^T)
at the «Т» moment of Time
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 18
Practical recommendations
on program risk management
• The availability of high quality data of the
program risks is essential to the risk
analysis
• Low-quality data about risks (e.g., not
well-founded estimate of the probability of
occurrence or impact of risks) are the
source of new risks (!)
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 19
Practical recommendations
on program risk management
It is useful to ask on the following questions when assessing the quality
of risk data:
• What is the source of risk ?
• Why ?
• What can be risk impact ?
• What can be risk response method ?
• When we should respond on risk ?
Lack of answer on any above question may be source for additional program
risk (!)
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 20
Practical recommendations
on program risk management
In determining the degree of proximity of the risk it is useful to answer
the following questions:
• Is there a risk of the greatest impact on the program at some point in time
?
• Are there certain dates with risk appearance that is not desirable for the
program ?
• Is there any date on or after which the risk cannot affect the program ?
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 21
Project Risk Management Automation
100% PMI® Standards and ISO
21500 compliance:
• Risk Identification
• Assessment tools
• Teamwork and Collaboration
• Online Risk Register
• Mitigation Tasks management
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 22
Portfolio Risk Management Automation
Portfolio management
support
• Portfolio management
• Bubble charts
• Additional Charts
• Portfolio Risk Register
• Weekly Risk Digest
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 23
Lessons Learned management
Knowledge Bases for:
• Construction
• Engineering
• Software Development
• Aerospace & Defense
• Electronic & Telecom
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 24
Risk Management Process Value
Mitigate Risks and
Save 89%* of your
project budget
01
Build the Trust in
your team, and
with your Customer
02
Lessons Learned
and Knowledge
management
03
Business and
Project Portfolio
Transparence
04
* Source: IT projects research by © The Standish
Group
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 25
The Main Conclusions
• While balancing portfolio it is necessary to analyze the risks remaining in
the portfolio components. There may be risks with mutual influence
(combined outcomes) on the strategic objectives of the organization
• It may be appropriate to slow pace of work of one of the components of
the program and transfer its resources to another component, where the
benefits to the organization can be obtained faster!
• Mutual dependencies of the components may have a significant impact on
the program schedule.
• Delays in obtaining results of one component which are required for the
other component of the program may lead to failure of terms of the whole
program!
Get started for free
RiskGap.com
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 27
Join us now!
Follow @RiskGap on Twitter
https://twitter.com/RiskGap
Join @RiskGap on Facebook
https://www.facebook.com/riskgap
Join RiskGap on LinkedIn
https://www.linkedin.com/groups/8212120
KDZEN, INC. A TEXAS CORPORATION © 2016 CONTACT US: [email protected] TRY RISKGAP ©2016 FOR FREE RISKGAP.COM 28
Contact us
Dr. Alexander Pavlov,
PhD, PMI PMP, IPMA CPM, Prime
http://en.apavlov-pm.com/
Anatoly Suzdaltsev,
KdZen, Inc. CEO
http://riskgap.com/