Risk Management

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Risk Management
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(No Transcript)
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Risk Management

• 90 reduction in project problems through the use
  of risk management
• The processes involved with identifying,
  analyzing, and responding to risk.
• Maximize the results of positive events minimize
  the consequences of adverse events.

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Risk Management Process

• 6-step process
• Risk management planning
• Risk identification
• Qualitative risk analysis
• Quantitative risk analysis
• Risk response planning
• Risk monitoring and control

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1. Risk management planning

• Define how risk will be managed during the
  project

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2. Risk identification

• Define the risk(s)
• What
• Quantify
• When
• How often

• Describe the risk
• Describe the risk factors
• Expected timing in the project life cycle
• Anticipated frequency of risk event

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2. Risk identification

• Risk factors - two risk measurements
• Likelihood Probability that the risk will occur
• Impact or amount at stake Range of possible
  outcomes

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2. Risk identification

• Tools for risk identification
• Sources of risk or risk categories
• Information gathering techniques

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2. Risk identification

• Sources of risk or risk categories
• Technical, quality, or performance risks
• Project management risks
• Organizational risks
• External risks

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2. Risk identification

• Technical, quality or performance
• Quality risk The concrete may not dry before
  winter weather sets n causing us to not meet our
  quality standard of concrete strength
• Project management
• Schedule risk Hardware will arrive later than
  planned causing a delay of 3 days for Task XYZ

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2. Risk identification

• Information gathering techniques
• Brainstorming
• Delphi technique
• Interviewing
• SWOT analysis

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2. Risk identification

• Output
• Risks
• Risk triggers early warning signs that a risk
  event may be occurring

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3. Qualitative analysis

• Rank risks - using risk factors
• Likelihood
• Impact
• Data precision ranking how good is the data
  associated with the risk

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4. Quantitative analysis

• Expected value
• Decision tree
• Monte Carlo simulation

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5. Risk response planning

• Cant eliminate risk in a project
• Goal make the negative risks smaller and make
  the positive risks more likely
• Risk owner responsible for developing the
  response and carrying it out if necessary.

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5. Risk response planning

• Risk response strategies
• Avoidance
• Mitigation
• Acceptance
• Transference
• (deflection, allocation)

• eliminate threat by eliminating the cause
• reduce the risk factors (probability or
  consequences)
• if it happens, it happens contingency plan
• make another party responsible for the risk, i.e.
  insurance, warranties, bonds, outsource

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5. Risk response planning

• Assign a team member to visit the sellers
  manufacturing facilities frequently to learn
  about a problem with delivery as early as possible

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5. Risk response planning

• Notify management that there could be a major
  cost increase if a risk occurs because no action
  is being taken to prevent that risk.

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5. Risk response planning

• Remove a troublesome resource from the project
• i.e. (Sherrys day care)

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5. Risk response planning

• Provide a team member who is less experienced
  with additional training

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5. Risk response planning

• Ask the client to handle some of the work

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5. Risk response planning

• Decide to prototype a risky piece of equipment

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5. Risk response planning

• Outsource difficult work to a more experienced
  company

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PM Quote

• I try to only get mad at circumstances, not at
  people
• -- Sherry Buschmann, NASA

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Move It Yourself

• Earl Roberts, FBI
• Questions
• Risk identification
• What
• When
• Quantify
• How often
• Risk response