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11 project risk management

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  • 1. OMER ALSAYED OMER| PMP, MBA, B. SC. (CIVIL ENGINEERING) OMERALSAYED@YAHOO.COM – KHARTOUM – SUDAN +249123494587
  • 2. Course Description  Type brief course summary  Location  Lectures: Mon-Wed-Fri at 00:00 am  Labs: Tues-Thurs at 00:00 am  Prerequisites:  Credits:
  • 3. risk management planning, identification, analysis, responses, monitoring and control on a project. by conducting
  • 4. Defining Planning Executing Delivering Chances of risks occurring
  • 5. • defining HOW to conduct risk management activities for a project. 11.1 Plan Risk Management • DETERMINING which risks may affect the project and documenting their characteristics. 11.2 Identify Risks • PRIORITIZING risks for further analysis or action (assessing and combining probability and impact). 11.3 Perform Qualitative Risk Analysis • NUMERICALLY analyzing the effect of identified risks on overall project objectives. 11.4 Perform Quantitative Risk Analysis • developing OPTIONS and actions to enhance opportunities and to reduce threats to project objectives. 11.5 Plan Risk Responses • IMPLEMENTING response plans, tracking identified risks, monitoring residual risks, identifying new risks, and evaluating risk process effectiveness 11.6 Control Risks
  • 6. Risk appetite, •the degree of uncertainty an entity is willing to take on in anticipation of a reward. Risk tolerance •the degree, amount, or volume of risk that an organization will withstand. Risk threshold •the level of uncertainty or impact at which a stakeholder may have a specific interest. Below >> acceptable … Above >> not tolerate.
  • 7. Inputs Project management plan Project charter Stakeholder register Enterprise environmental factors Organizational process assets Tools&Techniques Analytical techniques Expert judgment Meetings Outputs Risk management plan
  • 8. Project Management Plan • all approved subsidiary management plans and baselines • provides baseline or current state of risk-affected areas including scope, schedule, and cost. Project Charter • high-level risks, high-level project descriptions, and high- level requirements. Stakeholder Register • contains all details related to the project’s stakeholders, provides an overview of their roles. Enterprise Environmental Factors • risk attitudes, thresholds, and tolerances Organizational Process Assets • Risk categories, concepts and terms, Risk statement formats, Standard templates, Roles and responsibilities, Authority levels for decision making, and Lessons learned.
  • 9. understand and define the overall risk management context of the project. stakeholder risk attitudes the strategic risk exposure. Risk management context stakeholder risk profile analysis performed to grade and qualify: the project stakeholder risk appetite and tolerance. Depending on these assessments, the project team can allocate appropriate resources and focus on the risk management activities strategic risk scoring sheets provide a high- level assessment of the risk exposure based on the overall project context.
  • 10. define High-level plans - RISK ACTIVITIES. develop Risk management COST and SCHEDULE activities review Risk CONTINGENCY reserve approaches. Assign Risk management RESPONSIBILITIES. General organizational templates for risk CATEGORIES, the PROBABILITY and IMPACT matrix will be tailored to the specific project. project manager team members stakeholders others, as needed
  • 11.  Methodology.  Defines the approaches, tools, and data  Roles and responsibilities.  lead, support, and risk management team members for each type of activity in the risk management plan, and clarifies their responsibilities.  Budgeting.  Estimates funds needed for inclusion in the cost baseline and establishes protocols for application of contingency and management reserves.  Timing.  when and how often the risk management processes will be performed  schedule contingency reserves protocols  establishes risk management activities.
  • 12.  grouping potential causes of risk.  Several approaches can be used, (structure based on project objectives by category. A risk breakdown structure (RBS)
  • 13. RBS BCSP Technical Unproven Technology Quality of Technology Performance Risks Complex Technology Project Management Schedule Planning Project Disciplines Resource Planning Organizational Project Schedules Unrealistic Objectives Funding External Weather Labor Issues Catastrophic Risk Cost Estimates BUDGETING
  • 14.  For quality and credibility requires that different levels of risk probability and impact be defined that are specific to the project context. Defined Conditions for Impact Scales of a Risk on Major Project Objectives (Examples are shown for negative impacts only) Relative or numerical scales are shown Project Objective Very low /0.05 Low /0.10 Moderate /0.20 High /0.40 Very high /0.80 Cost Insignificant cost increase < 10% cost increase 10% - 20% cost increase 20% - 40% cost increase >40% cost increase Time Insignificant time increase < 5% time increase 5% - 10% time increase 10% - 20% time increase >20% time increase Scope Scope decrease barely noticeable Minor areas of scope affected Major areas of scope affected Scope reduction unacceptable to sponsor Project end item is effectively useless Quality Quality degradation barely noticeable Only very demanding applications are affected Quality reduction requires sponsor approval Quality reduction unacceptable to sponsor Project end item is effectively useless
  • 15.  Probability and impact matrix.  a grid for mapping the probability of each risk occurrence and its impact on project objectives if that risk occurs.  Revised stakeholders’ tolerances.  Stakeholders’ tolerances, as they apply to the specific project, may be revised in the Plan Risk Management process.  Reporting formats.  how the outcomes of the risk management process will be documented, analyzed, and communicated(content/format of the risk register - reports).  Tracking.  how risk activities will be recorded for the benefit of the current project and how risk management processes will be audited.
  • 16. Sample of RMP Ex. Make a sample of RMP for your project
  • 17. Inputs Risk management plan Cost management plan Schedule management plan Quality management plan Human resource management plan Scope baseline Activity cost estimates Activity duration estimates Stakeholder register Project documents Procurement documents Enterprise environmental factors Organizational process assets Tools&Techniques Documentation reviews Information gathering techniques Checklist analysis Assumptions analysis Diagramming techniques SWOT analysis Expert judgment Outputs Risk register
  • 18. • assignments of roles and responsibilities, provision for risk management activities in the budget and schedule, and categories of risk 11.2.1.1 Risk Management Plan • provides processes and controls that can be used to help identify risks across the project. 11.2.1.2 Cost Management Plan • provides insight to project time/schedule objectives and expectations which may be impacted by risks (known and unknown). 11.2.1.3 Schedule Management Plan • provides a baseline of quality measures and metrics for use in identifying risks. 11.2.1.4 Quality Management Plan
  • 19. 11.2.1.5 Human Resource Management Plan •how project human resources should be defined, staffed, managed, and released. ,roles and responsibilities, •project organization charts, and the staffing management plan. •how project human resources should be defined, staffed, managed, and released. ,roles and responsibilities, •project organization charts, and the staffing management plan. 11.2.1.6 Scope Baseline •Uncertainty in project assumptions. •The WBS (potential risks at both the micro and macro levels). •Risks can be identified and tracked at summary, control account, and/or work package levels. •Uncertainty in project assumptions. •The WBS (potential risks at both the micro and macro levels). •Risks can be identified and tracked at summary, control account, and/or work package levels. 11.2.1.7 Activity Cost Estimates •provide a quantitative assessment of the likely cost to complete scheduled activities (D + r). •result in projections indicating sufficient or insufficient to complete the activity •provide a quantitative assessment of the likely cost to complete scheduled activities (D + r). •result in projections indicating sufficient or insufficient to complete the activity 11.2.1.8 Activity Duration Estimates •useful in identifying risks related to the time allowances for the activities or project as a whole, again with the width of the range of such estimates indicating the relative degree(s) of risk. •useful in identifying risks related to the time allowances for the activities or project as a whole, again with the width of the range of such estimates indicating the relative degree(s) of risk.
  • 20. 11.2.1.9 Stakeholder Register •Information about the stakeholders is useful for soliciting inputs to identify risks, as this will ensure that key stakeholders, especially the stakeholder, sponsor, and customer are interviewed or otherwise participate during the Identify Risks process. •Information about the stakeholders is useful for soliciting inputs to identify risks, as this will ensure that key stakeholders, especially the stakeholder, sponsor, and customer are interviewed or otherwise participate during the Identify Risks process. 11.2.1.10 Project Documents •Project charter, Project schedule, Schedule network diagrams, Issue log, Quality checklist, and Other information proven to be valuable in identifying risks. •Project charter, Project schedule, Schedule network diagrams, Issue log, Quality checklist, and Other information proven to be valuable in identifying risks. 11.2.1.11 Procurement Documents •The complexity and the level of detail of the procurement documents should be consistent with the value of, and risks associated with, planned procurement. •The complexity and the level of detail of the procurement documents should be consistent with the value of, and risks associated with, planned procurement. 11.2.1.12 Enterprise Environmental Factors •Published information, including commercial databases, Academic studies, Published checklists, Benchmarking, Industry studies, and Risk attitudes. •Published information, including commercial databases, Academic studies, Published checklists, Benchmarking, Industry studies, and Risk attitudes. 11.2.1.13 Organizational Process Assets •Project files, including actual data, Organizational and project process controls, Risk statement formats or templates, and Lessons learned. •Project files, including actual data, Organizational and project process controls, Risk statement formats or templates, and Lessons learned.
  • 21.  11.2.2.1 Documentation Reviews  A structured review of the project documentation may be performed, including plans, assumptions, previous  project files, agreements, and other information. The quality of the plans, as well as consistency between those  plans and the project requirements and assumptions, may be indicators of risk in the project.  11.2.2.2 Information Gathering Techniques  Brainstorming.  Delphi technique.  P-352
  • 22. Integration •Inadequate planning; •poor resource allocation; •poor integration management; •lack of post-project review Scope •Poor definition of scope or work packages; •incomplete definition of quality requirements •inadequate scope control Time •Errors in estimating time or resource availability; •poor allocation and management of float; •early release of competitive products Cost •Estimating errors; •inadequate productivity, cost, •change, or contingency control; •poor maintenance, security, purchasing, etc. Quality •Poor attitude toward quality; •substandard design/materials/workmanship; •inadequate quality assurance program Human Resources •Poor conflict management; •poor project organization •Poor definition of responsibilities; •absence of leadership Communications •Carelessness in planning •Carelessness in communicating; •lack of consultation with key stakeholders
  • 23. Risk register
  • 24. Our project risk register Risk ID Risk Statement Probability Impact Scope Quality Schedule Cost Score Respons e 100 Materials Price change 0.7 - 0.7 - 0.50 110 Labor wages change 0.5 - 0.5 - 0.25 120 Soil bearing capacity assumption not match 0.2 - 0.5 - 0.30 130 Manpower not easily available 0.5 + 0.5 + 0.25 140 Engineers available 0.8 + 0.5 + 0.40 150 On-time funding 0.7 + 0.5 + 0.35
  • 25. Probability & Impact assessment Probability & Impact matrix
  • 26. Risk data sheet c
  • 27. ‫وآﻞ‬ ‫اﻟﻤﻮﺳﻢ‬ ‫ﻣﻔﺎﺟﺎة‬ ‫اﻟﻤﻮاﺳﻢ‬!!
  • 28. Course Objectives Course Objectives Results/Outcome Expected Skills Developed Objective 1 Result 1 Skills Developed Objective 2 Result 2 Skills Developed Objective 3 Result 3 Skills Developed Objective 4 Result 4 Skills Developed
  • 29. Required Materials •Books •Articles •Web •Other Reading •Supplies •Equipment •Other project materials Project •Software and hardwareTechnology/Tools
  • 30. Instructional Methods  Briefly describe instructional methods  Lectures  Demonstrations  Class discussion/Virtual discussions  Individual/group projects  Labs
  • 31. Schedule Week Topic Assignment/Project Objective Week 1 Topic 1 Brief description Objective Week 2 Topic 2 Brief description Objective Week 3 Topic 3 Brief description Objective Week 4 Topic 4 Brief description Objective Week 5 Topic 5 Brief description Objective
  • 32. Assessment Criteria  Weekly assignments  Projects  Quizzes  Final Exam 10 30 20 40 Percent of Grade Weekly assignments Projects Quizzes Final exam
  • 33. Resources Web & Software Tools Class web site Collaboration tools Mobile/Other apps Social Media Twitter Facebook Other Labs, Study Groups Labs Study groups
  • 34. Instructor Contact Information Email Office phone Office hours Instructor web page
  • 35. Opportunity Threat
  • 36. Questions?