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Singapore Risk management seminar presentation pack

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Singapore Risk management seminar presentation pack

  1. 1. Developing a Risk Architecture Framework that fits into your risk management strategy Carlos Villasmil KPOC Interface Engineer
  2. 2. Risk Mind-set and Culture Identify and assess your major risks Decide which risks are natural Determines your capacity and appetite for risk Embed risk in all decisions and processes Align governance and organization around risk 1. Determining your project risk appetite by analyzing your risk exposure
  3. 3. 1. Determining your project risk appetite by analyzing your risk exposure Definition: “Risk appetite is the level of risk that management is willing to accept while attempting to create value for the organization.” Risk Exposure is also define as the “amount of risk you simply can’t avoid”. Exposure may also be referred to as Threat That means that the Risk management process should be able to determine the risk exposure, which is the final outcome of the application of Contingency and mitigation plans. A good strategy to determine the risk exposure: • focus on a few Top risks that can affect negatively the cash flow or the completion date of your project. • The residual risks after mitigation and the low probability – low impact risks will be much likely the ones that will satisfy the risk appetite of the Project management.
  4. 4. 1. Determining your project risk appetite by analyzing your risk exposure Project or companyThreats Threats Threats Threats Threats Threats Threats Threats Threats RMS Top Risks Acceptable level of risks exposure Management attention and focus
  5. 5. 2. Keeping an acceptable level of your risk exposure within your project risk appetite An acceptable level of the risk exposure will depend on issues as diverse as size of the company, financial health, Management “risk” perception ( conservative or optimist). A way to do this is select which ranks of risks can be acceptable for the company using a proper top-down, holistic view of risk exposures that will not affect the organization’s ability to achieve strategic, operation, reporting, and compliance objectives.
  6. 6. Always have in mind that: “Risk is dynamic and subject to constant change therefore required of constant monitoring and communication among the project team members”. A healthy practice to “sense” the status of a risk is an open conversation between the discipline leaders in the project team. This can be done weekly or monthly as required. The open conversation helps to: 1. discuss the nature of a risk identified. 2. Determine if the risk is properly stated then understand by all team members. 3. Evaluate the evolution of a risk and their mitigation or contingency plan 4. Evaluate the assessment and therefore the effectiveness of the action plan 5. Check for inconsistencies or changes in the circumstances or specific situations of the project
  7. 7. 3. Designing contingency plan to treat your project risks • Contingency plans are only drawn upon when a risk occurs  • The Contingency plan should limit the damage to the project. •You should normally prepare contingency plans for any risk which        cannot be mitigated immediately   -   in particular high probability, high impact risks, i.e. those of                   high severity. • Contingency plans should be ready before the risk occurs so that                     you have resources agreed and are prepare to take action  quickly.  •  In preparing contingency plans some mitigation actions may be  generated.  •  Identify the trigger point at which the contingency plan needs to be  implemented.  •  Quantify the cost and time estimates for the contingency plan.  Evaluate benefits for the project of implement this contingency plan. 
  8. 8.  4. Measuring the effectiveness and accuracy of your planning assumptions • This is difficult since Risk planning is dealing with the  intrinsically uncertain. •  One way to measure the effectiveness of a risk planning  assumption is with the prioritization of all the risks and then the  reassessment of the risk.  •  Assign numeric values to the probability ( % of occurrence) and the  impact.( level of impact in cost, time, production) be as specific as  possible in the consequence description  (i.e.  Project will be delayed  by 13 days) in that case you can set a numeric value to a pre  established range of impacts.  • Once you determine your mitigation plan ( reduce the probability of  occurrence) or the contingency plan ( to reduce the impact once the  risk occurs) then you can check how this plan assumptions works  and then you can determine the risk reduction. This can be done  using a Risk Assessment Matrix.  •  A Quantitative Risk Analysis (QRA) is also a good technique to  measure how effective have been your planning assumptions and  also to make the proper adjustment to this assumptions. 
  9. 9.  5. Exploring the impact and consequences of risks for your risk planning Select and implement a Risk response strategy. (Treat, Take, Transfer or  Terminate), this will allow to select those risks that can be influenced or not  by the project organization therefore helps the management to select  where to direct their effort.  • Risks once identified, require to be prioritized assessing their probability  of occurrence and the impact on the project objectives.  • Investigate the nature of a risk. What are their cause, then you can  determine the immediate consequence if the risk occurred and the  consequence derives of the initial ones.  • You can make your risk response plan based on this and of course  combining it with the risk response strategy. This will help to select those  risks that can really affect the project objectives.  •Remember,  risk is dynamic therefore their consequence and impact also  can change with time. • Good conversation between team members is a good way to check the  validity of the impact and also to make the proper adjustments to your risk  planning.   
  10. 10. 6. Re-evaluating your risk management plan after you complete each phase of your project •Brainstorming sessions or periodic team meetings to openly discuss the actual risks and to identify new is also required right after the completion of each phase. • The change of stage in a project brings more definition. The risk management plan document needs to be adapted to this higher level of definition.
  11. 11. Q&A SECTION

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