Risk Chapter 11.pptx

1. CHAPTER 11:
PROJECT RISK
MANAGEMENT
Giovanni Bambaren

2. 11. RISK MANAGEMENT: KEY CONCEPTS
According to the PMBOK® Guide, once a negative risk event occurs, it's considered an issue and is no longer a
risk.
 Risk attitude consists of three elements:
 Risk appetite is the level of uncertainty the stakeholders are willing to accept in exchange for the
potential positive impacts of the risk.
 Risk tolerance is that balance where stakeholders are comfortable taking a risk because the known
benefits to be gained outweigh what could be lost—or just the opposite.
 Risk thresholds are measures or levels of uncertainty or impact the organization is willing to operate
within.
 Risk Trigger: An event, condition, or something that generate the occurrence of a risk. They are warning
signs or symptoms that a risk event is about to occur.

3. 11.1 PLAN RISK MANAGEMENT

4. 11.1.1 PLAN RISK
MANAGEMENT:
INPUTS
1. Project Charter
2. Project Management Plan
3. Project Documents (Stakeholder Register)
4. Enterprise Environmental Factors
5. Organizational Process Assets

5. 11.1.2 PLAN RISK
MANAGEMENT:
TOOLS AND
TECHNIQUES
Expert Judgment
Data Analysis (Stakeholder
Analysis)
Meetings

6. 11.1.3 PLAN RISK
MANAGEMENT:
OUTPUTS
1. Risk Management Plan:
 Risk strategy
 Methodology
 Roles and responsibilities
 Funding
 Timing
 Risk categories
 Definitions of risk probability and impact

7. 11.1.3 PLAN RISK MANAGEMENT: OUTPUTS

8. 11.1.3 PLAN RISK MANAGEMENT: OUTPUTS

9. 11.1.3 PLAN RISK
MANAGEMENT:
OUTPUTS
1. Risk Management Plan …
 Probability and impact matrix.
 Revised stakeholders’ tolerances.
 Reporting formats.
 Tracking documents.

10. 11.1.3 PLAN RISK MANAGEMENT: OUTPUTS
Probability Impact Matrix:

11. 11.1.4 PLAN RISK
MANAGEMENT:
QUESTIONS
What is the key input to the Plan Risk Management
process that contains high-level risks for a Project?
Which hierarchical structure defines the risk categories
may be sources of project risks?
Which matrix considers both the probability and the
impact of each risk so it can be scored for prioritization?
Where is the format and other details of the Risk Register
and the Risk Report defined?

12. 11.2 IDENTIFY RISKS

13. 11.2.1 IDENTIFY
RISKS: INPUTS
1. PMP(Requirements, Schedule, Cost, Quality,
Resource, Risk, Scope baseline, Schedule
baseline, Cost baseline)
2. Project Documents (Assumptions, Cost estimates,
Duration estimates, Issues, Lessons,
Requirements, Resources, Stakeholder)
3. Agreements
4. Procurements documentation
5. EEFs
6. OPAs

14. 11.2.2 IDENTIFY
RISKS: TOOLS
AND
TECHNIQUES
1. Expert Judgment
2. Data Gathering
 Brainstorming, Checklists, Interviews.
3. Data Analysis
 Root cause analysis
 Assumption and constraint analysis
 SWOT Analysis
 Document analysis

15. 11.2.2 IDENTIFY
RISKS: TOOLS
AND
TECHNIQUES
4. Interpersonal and Team Skills
 Facilitation
5. Prompt Lists
6. Meetings

16. 11.2.3 IDENTIFY RISKS: OUTPUTS
1. Risk Register
List of identified risks
Potential risk owners
List of potential responses
ID Risk Trigger Event Cause Impact Owner Response Plan
1 Infrastructure
team is not
available when
needed.
Predecessor
tasks not
completed
on time
Operating
System
Upgrade
delayed
Equipment
was not
delivered on
time
Schedule
delay
Brown Compress the
schedule by
beginning tasks in the
next milestone while
working on operating
system upgrade

17. 11.2.3 IDENTIFY
RISKS: OUTPUTS
2. Risk Report
• Sources of overall project risk.
• Summary information on identified individual
project risks
3. Project Document Updates
 Assumption Log
 Issue Log
 Lessons Learned Register

18. 11.2.4
IDENTIFY
RISKS:
QUESTIONS
Name some of the tools and techniques used
in the Identify Risks process.
What are the 2 key outputs of the Identify
process?
SWOT stands for:
Which document has details about specific
identified in the Project?

19. 11.3 PERFORM QUALITATIVE RISK ANALYSIS

20. 11.3.1
PERFORM
QUALITATIVE
RISK ANALYSIS:
INPUTS
1. PMP(Risk Management Plan)
2. Project Documents (Assumptions,
Risks, Stakeholders)
3. Enterprise Environmental Factors
4. Organizational Process Assets

21. 11.3.2 PERFORM
QUALITATIVE
RISK ANALYSIS:
TOOLS AND
TECHNIQUES
1. Expert Judgment
2. Data Gathering (Interviews)
3. Data Analysis
 Risk Data Quality Assessment (accurate info)
 Risk Probability Impact Assessment
 Assessment of other Risk Parameters

22. 11.3.2 PERFORM
QUALITATIVE
RISK ANALYSIS:
TOOLS AND
TECHNIQUES
4. Interpersonal and Team Skills
 Facilitation
5. Risk Categorization
6. Data Representation
 Probability and Impact Matrix
 Hierarchical Charts
7. Meetings

23. 11.3.2 PERFORM QUALITATIVE RISK ANALYSIS: TOOLS
AND TECHNIQUES
Probability & Impact Assessment (Example)

24. 11.3.3
PERFORM
QUALITATIVE
RISK ANALYSIS:
OUTPUTS
1. Project Documents Updates
 Assumption log.
 Issue log.
 Risk register.
 Risk Report.

25. 11.3.4
PERFORM
QUALITATIVE
RISK
ANALYSIS:
QUESTIONS
The impact of a risk affects objectives such as scope,
cost, quality, and _______.
During which process is a risk owner assigned to
manage a risk?
Which technique ensures that risk information is
accurate and reliable?
Probability and impact priority levels are assessed
which tool?

26. 11.4 PERFORM QUANTITATIVE RISK ANALYSIS

27. 11.4.1 PERFORM
QUANTITATIVE
RISK ANALYSIS:
INPUTS
1. PMP (RMP
, Scope, Schedule, Cost)
2. Project Documents (Assumptions, Basis of
estimates, Cost estimates, Cost forecasts,
Duration estimates, Milestone list, Resource
requirements, Risks, Risk Report, Schedule
forecasts)
3. Enterprise Environmental Factors
4. Organizational Process Assets

28. 11.4.2 PERFORM
QUANTITATIVE
RISK ANALYSIS:
TOOLS AND
TECHNIQUES
1. Expert Judgment
2. Data Gathering (Interviews)
3. Interpersonal and Team Skills (Facilitation)
4. Representation of uncertainty
5. Data Analysis
 Simulations(Monte Carlo), Sensitivity analysis,
Decision tree analysis, Influence Diagrams.

29. 11.4.2 PERFORM QUANTITATIVE RISK ANALYSIS:
TOOLS AND TECHNIQUES
Simulations(Monte Carlo) Example:

30. 11.4.2 PERFORM QUANTITATIVE RISK ANALYSIS:
TOOLS AND TECHNIQUES
Sensitivity Analysis Example:

31. 11.4.2 PERFORM QUANTITATIVE RISK ANALYSIS:
TOOLS AND TECHNIQUES
Decision Tree
Analysis Example:

32. 11.4.3 PERFORM QUANTITATIVE RISK
ANALYSIS: OUTPUTS
1. Project Documents Updates
 Probabilistic analysis of the project.
 Probability of achieving cost and time objectives.
 Prioritized list of quantified risks.
 Trends in quantitative risk analysis results.

33. 11.4.4
PERFORM
QUANTITATIVE
RISK
ANALYSIS:
QUESTIONS
Probability x Impact (quantified in $) = _________.
Monte Carlo is a ____________ technique.
____________ Analysis helps determine which risks have
the most potential impact or a project outcome.
EMV can be used to help make project decisions. This
analysis is called a __________.

34. 11.5 PLAN RISK RESPONSES

35. 11.5.1 PLAN RISK
RESPONSES:
INPUTS
1. PMP(Resource, Risk, Cost baseline)
2. Project Documents (Lessons, Project schedule,
project team assignments, resource calendars,
Risks, Risk Report, Stakeholders)
3. EEFs
4. OPAs

36. 11.5.2 PLAN
RISK
RESPONSES:
TOOLS AND
TECHNIQUES
Expert Judgment
Data Gathering (Interviewing)
Interpersonal and Team Skills (Facilitation)
Strategies for Threats
Strategies for Opportunities
Contingent response strategies

37. 11.5.2 PLAN RISK RESPONSES: TOOLS
AND TECHNIQUES
Strategies for Threats
Escalate
Avoid.
Transfer.
Mitigate.
Accept.
Strategies for Opportunities
Escalate
Exploit.
Share.
Enhance.
Accept.

38. 11.5.2 PLAN RISK RESPONSES: TOOLS AND
TECHNIQUES

39. 11.5.2 PLAN RISK
RESPONSES:
TOOLS AND
TECHNIQUES
7. Strategies for overall Project Risk
 Avoid
 Exploit
 Transfer / Share
 Mitigate / Enhance
 Accept

40. 11.5.2 PLAN RISK
RESPONSES:
TOOLS AND
TECHNIQUES
8. Data Analysis
 Alternative Analysis
 Cost-benefit Analysis
9. Decision Making

41. 11.5.3 PLAN RISK
RESPONSES:
OUTPUTS
1. Change Requests
2. Project Management Plan Updates
 Schedule management plan, Cost management
plan, Quality management plan, Procurement
management plan, Resource management plan,
Scope baseline, Schedule baseline, Cost baseline.
3. Project Documents Updates
 Assumptions, Cost Forecasts, Lessons, Project
Schedule, Project team assignments, Risks, Risk
Report.

42. 11.5.4 PLAN
RISK
RESPONSES:
QUESTIONS
Avoid, Transfer, and Mitigate are part of
which group of risk response strategies?
Exploit, Share, and Enhance are part of
which group of risk response strategies?
A common strategy for both threats and
opportunities is:
Which types of reserves is used for
unknown-unknowns?

43. 11.6 IMPLEMENT RISK RESPONSES

44. 11.6.1
IMPLEMENT
RISK
RESPONSES:
INPUTS
Project Management
Plan(Risk)
Project Documents (Lessons,
Risk Register, Risk Report)
OPAs

45. 11.6.2
IMPLEMENT
RISK
RESPONSES :
TOOLS AND
TECHNIQUES
Expert Judgment
Interpersonal
and Team Skills
Influencing
PMIS

46. 11.6.3 IMPLEMENT RISK RESPONSES :
OUTPUTS
1. Change Requests
2. Project Documents Updates
 Issue Log
 Lessons Learned Register
 Project Team Assignments
 Risk Register
 Risk Report

47. 11.6.4
IMPLEMENT
RISK
RESPONSES :
QUESTIONS
Who is responsible for
implementing risk response?
In which document do we
add details about individuals
risks?

48. 11.7 MONITOR RISKS

49. 11.7.1
MONITOR
RISKS:
INPUTS
Project Management Plan (Risk)
Project Documents (Issues, Lessons,
Risk Register, Risk Report)
Work Performance Data
Work Performance Reports

50. 11.7.2 MONITOR RISKS: TOOLS AND
TECHNIQUES
1. Data Analysis
 Technical Performance Measurement
 Reserve Analysis
2. Audits
3. Meetings

51. 11.7.3 MONITOR RISKS: OUTPUTS
1. Work Performance Information
2. Change Requests
3. Project Management Plan
Updates
4. Project Documents Updates
(Assumptions, Issues, Lessons,
Risk Register, Risk Report)
5. Organizational Process Assets
Updates

52. 11.7.4
MONITOR
RISKS:
QUESTIONS
Which technique assesses the
adequacy of reserves for taking care of
the remaining risks in the project?
Which analysis compares actual versus
planned technical accomplishments?
Which tool/technique examines the
effectiveness of the risk management
process?

53. SUMMARY
11.1 Plan Risk Management
11.2 Identify Risks
11.3 Perform Qualitative Risk Analysis
11.4 Perform Quantitative Risk Analysis
11.5 Plan Risk Responses
11.6 Implement Risk Responses
11.7 Monitor Risks

54. Risk Mind Map
11.1
Plan Risk
Management
PMP
Project
Documents
- Exp. Judg.
- Data Analysis
- Meetings
Risk Mgmt.
Plan
Project Charter
11.2
Identify
Risks
Procurements
Documentation
Agreements
- Exp. Judg.
- Data Gathering
- Data Analysis
- ITS
- Prompt List
- Meetings
Risk Register
Risk Report
11.3
Perform
Qualitative
Risk
Analysis
- Exp. Judg.
- Data Gathering
- Data Analysis
- ITS
- Risk Categorization
- Data Representation
(P&I Matrix)
- Meetings
11.4
Perform
Quantitative
Risk
Analysis
- Exp. Judg.
- Data Gathering
- ITS
- Rep. of uncertainty
- Data Analysis
Decision Tree
Analysis (EMV)
11.5
Plan Risk
Responses
- Exp. Judg.
- Data Gathering
- ITS
- Strategies for threats
- Strategies for
opportunities
- Contingent Response
Strategies
- Strategies for overall
project risks
- Data Analysis
- Decision Making
Change
Requests
11.6
Implement
Risk
Responses
- Exp. Judg.
- ITS
- PMIS
Change
Requests
11.7
Monitor
Risks
WPD
- Data Analysis
- Audits
- Meetings
Change
Requests
WPI
WPR