IQPC
     Project Risk Management 2008
                     Brisbane, Australia



    The Critical Value of
 Project Risk...
THANK
 YOU
www.torstenkoerting.com
www.paragliding 365.com
Defining the Critical Value
of Project Risk Management
      Torsten J. Koerting
    www.torstenkoerting.com
Risk (definition)
“Probability or threat of a damage, injury,
liability, loss, or other negative occurrence,
caused by ext...
Risk (definition)
“The quantifiable likelihood of loss or
less-than-expected returns.”
Risk (definition)
“Risk is a concept that denotes a potential
negative impact to some characteristic of
value that may ari...
RISK
              =
(probability of risk occurring)
               x
  (impact of risk occurring)
“Take calculated risks. That is quite
different from being rash.”
                  - George S. Patton (1885 – 1945)
“The policy of being too cautious is
the greatest risk of all.”
                 - Jawaharlal Nehru (1889 - 1964)
Why does Risk Management
         becomes
MORE and more important ?
What has changed the
   way we HAVE to
 manage projects and
    their risks ?
The World   Inconvenient    The World
  is flat       Truth      is changing
The Fall of the Berlin Wall …
… ended the cold war …
… and granted
     access to new markets for
          products, labor and material.
The Internet …




       … created easy global competition and
    increased the ability to share information
The Microsoft Office Suite …
… and the
   HTML and HTTP
            protocols …
Open – Sourcing …
… enables writing software so
that it can be easily shared,
improved and given access to.
Outsourcing …
… is moving lower value functions
    to other firms,
        in other countries
                for a lower cost.
Off shoring …
… is moving the production of
    goods into other countries.
Supply Chaining …
… by partnering with
   other companies to
       receive goods
          when needed.
In sourcing …
… by sourcing whole
 processes to other
         companies
Informing …
… by getting answers to
 almost any question
    within seconds
Information Steroids …
… by having all this
information
available at
your fingertips
The World   1. The Fall of the Berlin Wall
  is flat   2. The Internet
            3. Work-Flow Software
            4. Op...
With Increased Complexity …
… there are more things
                 to think about …
… there are more time zones
                 to overcome …
… there are more people
                to deal with …
… and with more people there are
   more cultures do deal with …
… more things can ( will ) fail …
… and will take longer.
With Increased Competition …
… continuous learning
              is required ...
… and well developed
             personal skills.
The World   The Impact :
  is flat
            1. Increased Complexity
               More things can fail
               ...
The World   Inconvenient    The World
  is flat       Truth      is changing
Global Warming …
… increased temperature ...
Svalbard Global Seed Vault
… rising see levels ...
… water shortage ...
… bigger storms than ever ...
… and one after the other ...
… disappearing lakes ...
Before   After
1972     2001
… and more wildfires ever.
What can

YOU
do about it
    ?
OK … there is something
       positive about it.
Shortage in resources …
• Demand higher
  than supply

• Supply controlled by
  OPEC and former USSR

• Demand will increase
… water is disappearing …
… and food is used as ethanol.
• Oil
• Water
• Food
Inconvenient   1. Global Warming
    Truth         Sea Levels rising
                  Water shortage
                  Mo...
… sharpen our
   senses …
… deal with
new requirements …
…

 more
change
   as
  you
   go

  …
Inconvenient   The Impact :
    Truth
               1.   Sharpen the senses
               2.   Deal with new Requirement...
The World   Inconvenient    The World
  is flat       Truth      is changing
… the risk
nobody had
on its register …
quot;Today, the store of human
knowledge doubles
every five years.quot;
- Bill Clinton, 2005
… 9 billions shortly …
… on a flat and …
… and warmer world.
The World    1.   Terrorism
is changing   2.   Increase of Knowledge
              3.   Growth in Population
             ...
… try to know what you don’t know …
… identify the right contingency …
… and manage the risk and
        not just the project.
The     The Impact :
Impact
         1. Look at risks
            we don’t know yet
         2. Identify Contingency
     ...
The World   Inconvenient    The World
  is flat       Truth      is changing
The World   1. The Fall of the Berlin Wall
  is flat   2. The Internet
            3. Work-Flow Software
            4. Op...
Inconvenient   1. Global Warming
    Truth         Sea Levels rising
                  Water shortage
                  Mo...
The World    1.   Terrorism
is changing   2.   Increase of Knowledge
              3.   Growth in Population
             ...
Therefore
… L E A R N ...
… F I N D O U T…
…MANAGE RISK…
… and S T A R T T O D A Y !
THANK
 YOU
Question




… and I do not have
             an answer …
The ‘Answer’ is always …
THANK
 YOU
Picture Credits ( 1 / 3 )
inconvenient truth - http://www.flickr.com/photos/galerieopweg/
inconvenient truth v002 - http:/...
Picture Credits ( 1 / 3 )
Informing 1 - http://www.flickr.com/photos/ask-for-peace/
Informing 2 - http://www.flickr.com/ph...
Picture Credits ( 1 / 3 )
oil supply 1 - http://www.flickr.com/photos/falsecognate/
oil supply 2 - http://seekingalpha.com...
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
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The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?

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The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?
The presentations tries to highlight the reasons why we have to manage projects and risks differently than years ago. There major reasons have been identified
1) The world becomes flat according to Thomas Friedman
2) There is the inconvenient truth and global warming
3) And the world is changing rapidly

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The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ?

  1. 1. IQPC Project Risk Management 2008 Brisbane, Australia The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ? - Torsten J. Koerting www.TORSTENKOERTING.com
  2. 2. THANK YOU
  3. 3. www.torstenkoerting.com
  4. 4. www.paragliding 365.com
  5. 5. Defining the Critical Value of Project Risk Management Torsten J. Koerting www.torstenkoerting.com
  6. 6. Risk (definition) “Probability or threat of a damage, injury, liability, loss, or other negative occurrence, caused by external or internal vulnerabilities, and which may be neutralized through premeditated action.”
  7. 7. Risk (definition) “The quantifiable likelihood of loss or less-than-expected returns.”
  8. 8. Risk (definition) “Risk is a concept that denotes a potential negative impact to some characteristic of value that may arise from a future event.”
  9. 9. RISK = (probability of risk occurring) x (impact of risk occurring)
  10. 10. “Take calculated risks. That is quite different from being rash.” - George S. Patton (1885 – 1945)
  11. 11. “The policy of being too cautious is the greatest risk of all.” - Jawaharlal Nehru (1889 - 1964)
  12. 12. Why does Risk Management becomes MORE and more important ?
  13. 13. What has changed the way we HAVE to manage projects and their risks ?
  14. 14. The World Inconvenient The World is flat Truth is changing
  15. 15. The Fall of the Berlin Wall …
  16. 16. … ended the cold war …
  17. 17. … and granted access to new markets for products, labor and material.
  18. 18. The Internet … … created easy global competition and increased the ability to share information
  19. 19. The Microsoft Office Suite …
  20. 20. … and the HTML and HTTP protocols …
  21. 21. Open – Sourcing …
  22. 22. … enables writing software so that it can be easily shared, improved and given access to.
  23. 23. Outsourcing …
  24. 24. … is moving lower value functions to other firms, in other countries for a lower cost.
  25. 25. Off shoring …
  26. 26. … is moving the production of goods into other countries.
  27. 27. Supply Chaining …
  28. 28. … by partnering with other companies to receive goods when needed.
  29. 29. In sourcing …
  30. 30. … by sourcing whole processes to other companies
  31. 31. Informing …
  32. 32. … by getting answers to almost any question within seconds
  33. 33. Information Steroids …
  34. 34. … by having all this information available at your fingertips
  35. 35. The World 1. The Fall of the Berlin Wall is flat 2. The Internet 3. Work-Flow Software 4. Open-Sourcing 5. Outsourcing 6. Off-Shoring 7. Supply-Chaining 8. In-Sourcing 9. In-Forming 10.Information Steroids
  36. 36. With Increased Complexity …
  37. 37. … there are more things to think about …
  38. 38. … there are more time zones to overcome …
  39. 39. … there are more people to deal with …
  40. 40. … and with more people there are more cultures do deal with …
  41. 41. … more things can ( will ) fail …
  42. 42. … and will take longer.
  43. 43. With Increased Competition …
  44. 44. … continuous learning is required ...
  45. 45. … and well developed personal skills.
  46. 46. The World The Impact : is flat 1. Increased Complexity More things can fail More things to think about More time zones Different cultures More people More points of failures 2. Increased Competition Continuous learning Improve personal skills
  47. 47. The World Inconvenient The World is flat Truth is changing
  48. 48. Global Warming …
  49. 49. … increased temperature ...
  50. 50. Svalbard Global Seed Vault
  51. 51. … rising see levels ...
  52. 52. … water shortage ...
  53. 53. … bigger storms than ever ...
  54. 54. … and one after the other ...
  55. 55. … disappearing lakes ...
  56. 56. Before After 1972 2001
  57. 57. … and more wildfires ever.
  58. 58. What can YOU do about it ?
  59. 59. OK … there is something positive about it.
  60. 60. Shortage in resources …
  61. 61. • Demand higher than supply • Supply controlled by OPEC and former USSR • Demand will increase
  62. 62. … water is disappearing …
  63. 63. … and food is used as ethanol.
  64. 64. • Oil • Water • Food
  65. 65. Inconvenient 1. Global Warming Truth Sea Levels rising Water shortage More storms than ever Lakes disappear More wildfires 2. Shortage in Resources Resource shortage War for resources
  66. 66. … sharpen our senses …
  67. 67. … deal with new requirements …
  68. 68. … more change as you go …
  69. 69. Inconvenient The Impact : Truth 1. Sharpen the senses 2. Deal with new Requirements 3. More Change while you run 4. Higher Risk profile needs higher contingency
  70. 70. The World Inconvenient The World is flat Truth is changing
  71. 71. … the risk nobody had on its register …
  72. 72. quot;Today, the store of human knowledge doubles every five years.quot; - Bill Clinton, 2005
  73. 73. … 9 billions shortly …
  74. 74. … on a flat and …
  75. 75. … and warmer world.
  76. 76. The World 1. Terrorism is changing 2. Increase of Knowledge 3. Growth in Population 4. Flatter 5. Warmer
  77. 77. … try to know what you don’t know …
  78. 78. … identify the right contingency …
  79. 79. … and manage the risk and not just the project.
  80. 80. The The Impact : Impact 1. Look at risks we don’t know yet 2. Identify Contingency 3. Manage Risks instead of projects
  81. 81. The World Inconvenient The World is flat Truth is changing
  82. 82. The World 1. The Fall of the Berlin Wall is flat 2. The Internet 3. Work-Flow Software 4. Open-Sourcing 5. Outsourcing 6. Off-Shoring 7. Supply-Chaining 8. In-Sourcing 9. In-Forming 10.Information Steroids
  83. 83. Inconvenient 1. Global Warming Truth Sea Levels rising Water shortage More storms than ever Lakes disappear More wildfires 2. Shortage in Resources Running out of resources The resource war Political Requirements
  84. 84. The World 1. Terrorism is changing 2. Increase of Knowledge 3. Growth in Population 4. Flatter 5. Warmer
  85. 85. Therefore
  86. 86. … L E A R N ...
  87. 87. … F I N D O U T…
  88. 88. …MANAGE RISK…
  89. 89. … and S T A R T T O D A Y !
  90. 90. THANK YOU
  91. 91. Question … and I do not have an answer …
  92. 92. The ‘Answer’ is always …
  93. 93. THANK YOU
  94. 94. Picture Credits ( 1 / 3 ) inconvenient truth - http://www.flickr.com/photos/galerieopweg/ inconvenient truth v002 - http://www.flickr.com/photos/yoshigi/ The world is flat - http://www.flickr.com/photos/obriendigital/ The world is changing - number of books - http://www.flickr.com/photos/babblingdweeb/ The world is changing - number of books - v002 - http://www.flickr.com/photos/flyzipper/ 1430 enciclopedia - http://www.flickr.com/photos/evaekeblad/ balancing lady - http://www.flickr.com/photos/orangebrompton/ important - http://www.flickr.com/photos/valeriebb/ billboard - http://www.flickr.com/photos/mjlaflaca/ Obama change - http://www.flickr.com/photos/tsevis/ Fall of Berlin Wall - http://www.flickr.com/photos/gavinandrewstewart/ Microsoft Office Candy - http://www.flickr.com/photos/sunfox/ HTML - http://www.flickr.com/photos/kk/ Latop Beach - http://www.flickr.com/photos/zzathras777/ Open Sourcing - http://www.flickr.com/photos/martinbekkelund/ Big Crowd - http://www.flickr.com/photos/richevenhouse/ cold war one - http://www.flickr.com/photos/pingnews/ New Markets - http://www.flickr.com/photos/pnp/ Outsourcing 1 - http://www.flickr.com/photos/danzden/ Outsourcing 3 - http://www.flickr.com/photos/kafkan/ Offshoring 1 - http://www.flickr.com/photos/photohome_uk/ Offshoring 2 - http://www.flickr.com/photos/trotzenberg/ Offshoring 1b - http://www.flickr.com/photos/taylar/ Supply Chaining 1 - http://www.flickr.com/photos/nimrodbar/ Supply Chaining 2 - http://www.flickr.com/photos/drewesque/ Insourcing 1 - http://www.flickr.com/photos/zyphbear/ Insourcing 2 - http://www.flickr.com/photos/liveu4/
  95. 95. Picture Credits ( 1 / 3 ) Informing 1 - http://www.flickr.com/photos/ask-for-peace/ Informing 2 - http://www.flickr.com/photos/julianbleecker/ Infroming 3 - http://www.flickr.com/photos/gedankenstuecke/ Info Steroids 1 - http://www.flickr.com/photos/listelys/ Info Steroids 2 - http://www.flickr.com/photos/chanc/ Project Manager - http://www.flickr.com/photos/floongle/ conference 1 - http://www.flickr.com/photos/mrtopf/ California Bush fires - http://earthobservatory.nasa.gov/NaturalHazards/Archive/Oct2003/California.TMOA2003299_lrg.jpg storm 1 - http://www.flickr.com/photos/gisuser/ storm 2 - http://www.flickr.com/photos/lakerae/ lake 1 - http://www.flickr.com/photos/mashroms/ lake chad 1 - nasa.gov lake chad 2 - nasa.gov seed vault 1 - http://www.flickr.com/photos/bzzzt/ rising see levels - http://www.globalwarmingart.com/wiki/Image:Recent_Sea_Level_Rise_png - Robert A. Rohde sea levels 2 - http://www.flickr.com/photos/2kool/ water shortage - http://www.flickr.com/photos/mckaysavage/ time zone - http://www.flickr.com/photos/mickyates/ more people 1 - http://www.flickr.com/photos/inyucho/ more people 3 - http://www.flickr.com/photos/msjacoby/ cultures - http://www.flickr.com/photos/untitlism/ longer - http://www.flickr.com/photos/swamibu/ break 1 - http://www.flickr.com/photos/jnsabino/ more things 1 - http://www.flickr.com/photos/brixton/ global warming 1 - http://www.flickr.com/photos/hodac/ global warming 2 - http://www.flickr.com/photos/focalplane/ global warming 3 - http://www.flickr.com/photos/a_siegel/
  96. 96. Picture Credits ( 1 / 3 ) oil supply 1 - http://www.flickr.com/photos/falsecognate/ oil supply 2 - http://seekingalpha.com/wp-content/seekingalpha/images/ oil supply 3 - http://www.wisergroup.net/img/oil-graph.jpg water shortage 1 - http://www.flickr.com/photos/sunrise7/ water shortage 2 - http://www.flickr.com/photos/pierre_pouliquin/ regulations 1 - http://www.flickr.com/photos/two-wrongs/ terrorism 1 - http://www.flickr.com/photos/sis/ knowledge 1 - http://www.flickr.com/photos/worldeconomicforum/ flat world 1 - http://www.flickr.com/photos/aidg/ warmer world 1 - http://www.flickr.com/photos/adrianol/ 42 - http://www.flickr.com/photos/howzey/ dont panic - http://www.flickr.com/photos/fboosman/ question - http://www.flickr.com/photos/eleaf/ learning - http://www.flickr.com/photos/yewenyi/ competencies 1 - http://www.flickr.com/photos/38234414@N00/ lifeguard 1 - http://www.flickr.com/photos/john/ requirements 1 - http://www.flickr.com/photos/davidquick/ change requests 1 - http://www.flickr.com/photos/yyq123/ contingency 1 - http://www.flickr.com/photos/grantmac/ open door 1 - http://www.flickr.com/photos/eyeballstew/ umbrellas 2 - http://www.flickr.com/photos/greentea/ wet woman 1 - http://www.flickr.com/photos/maxedaperture/ ethanol 1 - http://www.flickr.com/photos/jonathanvlarocca/ ethanol 2 - http://www.flickr.com/photos/swanksalot/ ethanol 3 - http://www.flickr.com/photos/whatknot/
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