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Risk ManagementPlanning for the unknown
What is Risk ?    •   Risk is any uncertain event or condition that        might affect your project.    •    Not all risk...
How to deal with the risks    • Avoid    • Mitigate    • Transfer (Insurance / Off shoring)    • Accepthttp://www.radiantm...
Reactive Strategy    • Don’t worry, I’ll see what to do when it      comes    • I’m always lucky and nothing will happen  ...
Why RM is necessary ?    •    It protects from losses and keeps opportunities        open    •    It is always better to s...
Why RM is necessary ?    •   Avoiding risk means getting out of business    •    Intelligent thinking makes some people mo...
Risk Types    • Static Risks (Fire, Storm, Accident..)    • Dynamic Risks (Stock Market, Gambling)      where the occurren...
Risk Break-down Structure    Technical                   External        Organizational    • Quality                   • W...
Risk Management    •    Risk is handled by different people in different        ways based on their preference and attitud...
Risk Management    • Risk Identification    • Risk Analysis – Occurrence, Impact,      Frequency, Timing    • Risk Assessm...
Nature of Risks    •    Technology Risks – H/w, S/w, Network, Network        Communication    •    People Risks – Availabi...
General Observations     Risk Class        Risk %Technology             5 - 10People                  20Organization      ...
S/w Risk Management    Identify                 Analyze                                Plan                               ...
Risk Identification    •   Area where risk can occur    •   Type of risk    •   Probability    •   Severity    •   Frequen...
Risk Analysis• Requirements      • Design –   Stability       –   Functionality –   Completeness    –   Difficulty –   Cla...
Risk Analysis• Engg. Spec.           • Dev. System  –   Maintainability     –   Capacity  –   Reliability         –   Suit...
Risk Resolution    •   Act on the trigger    •   Execute the risk action plan    •   Monitor the action plan    •   Access...
Expected Monitory Value - EMV    • What is Expected Monitory Value of your risk –  High Winds                35%        $4...
EMV    •   35 %    X - 48     = - 16.80    •   5%      X -750     = - 37.50    •   15%     X 800      = + 120.00    •    1...
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Pm 7 risk-man

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Pm 7 risk-man

  1. 1. Risk ManagementPlanning for the unknown
  2. 2. What is Risk ? • Risk is any uncertain event or condition that might affect your project. • Not all risks are negative – there are some opportunitieshttp://www.radiantminds.co.in
  3. 3. How to deal with the risks • Avoid • Mitigate • Transfer (Insurance / Off shoring) • Accepthttp://www.radiantminds.co.in
  4. 4. Reactive Strategy • Don’t worry, I’ll see what to do when it comes • I’m always lucky and nothing will happen • Fire Fighting • Chaoshttp://www.radiantminds.co.in
  5. 5. Why RM is necessary ? • It protects from losses and keeps opportunities open • It is always better to strike a balance between risks & rewards / opportunities • Different organizations have different tolerances for riskshttp://www.radiantminds.co.in
  6. 6. Why RM is necessary ? • Avoiding risk means getting out of business • Intelligent thinking makes some people more confident to take riskshttp://www.radiantminds.co.in
  7. 7. Risk Types • Static Risks (Fire, Storm, Accident..) • Dynamic Risks (Stock Market, Gambling) where the occurrence is either a loss or a Profit • Production Risks • Marketing & Distribution Risks • Financial Risks • Personal Risks • Environmental Riskshttp://www.radiantminds.co.in
  8. 8. Risk Break-down Structure Technical External Organizational • Quality • Weather • Attrition • Compatibility • Customer • Priority Change • Regulations • Funding Cutshttp://www.radiantminds.co.in
  9. 9. Risk Management • Risk is handled by different people in different ways based on their preference and attitude towards risk • Each one has different risk tolerance • Some people are “Reactive – when risk occurs” and some “Proactive”http://www.radiantminds.co.in
  10. 10. Risk Management • Risk Identification • Risk Analysis – Occurrence, Impact, Frequency, Timing • Risk Assessment – Loss on occurrence, Risk Exposure • Risk Planning and Resolution – Approach, Diff. steps • Risk Monitoring – Impact and implications • Risk Mitigation – How to meet the challengeshttp://www.radiantminds.co.in
  11. 11. Nature of Risks • Technology Risks – H/w, S/w, Network, Network Communication • People Risks – Availability, Capability, Skills, Maturity, • Organizational Risks – Customer relations • Requirement Risks – Clarity, Completeness, Confirmation • Estimation Risks – Scope, Reusabilityhttp://www.radiantminds.co.in
  12. 12. General Observations Risk Class Risk %Technology 5 - 10People 20Organization 20Requirements 60Estimation 30
  13. 13. S/w Risk Management Identify Analyze Plan Monitor Resolvehttp://www.radiantminds.co.in
  14. 14. Risk Identification • Area where risk can occur • Type of risk • Probability • Severity • Frequency • Mitigationhttp://www.radiantminds.co.in
  15. 15. Risk Analysis• Requirements • Design – Stability – Functionality – Completeness – Difficulty – Clarity – Interfaces – Validity – Performance – Feasibility – Testability – Scope – H/w constraints – Non Std. S/w
  16. 16. Risk Analysis• Engg. Spec. • Dev. System – Maintainability – Capacity – Reliability – Suitability – Safety – Usability – Security – Familiarity – Feasibility – Deliverability – Scope • Resources – Sustainability – Schedule – Process Control – Staff – Budget – Facilities
  17. 17. Risk Resolution • Act on the trigger • Execute the risk action plan • Monitor the action plan • Access the new risk scenario • Control the risk exposure Risk Exposure = Probability X Impacthttp://www.radiantminds.co.in
  18. 18. Expected Monitory Value - EMV • What is Expected Monitory Value of your risk – High Winds 35% $48 for Replacement Mudslide 5% $750 damage cost Usable Winds 15% $800 saved as battery cost Truck Rental 10% $350 as last minute Unavailable rentalhttp://www.radiantminds.co.in
  19. 19. EMV • 35 % X - 48 = - 16.80 • 5% X -750 = - 37.50 • 15% X 800 = + 120.00 • 10% X -350 = - 35.00 • Total EMV - - 30.70 • IF you add 30.70 into the budget then it should be enough to account for these riskshttp://www.radiantminds.co.in

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