Session 18 4th edition PMP


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Session 18 4th edition PMP

  1. 1. Project Risk Management
  2. 2. Project Risk Management Knowledge Area Process Initiating Planning Executing Monitoring & Contol Closing Risk Plan Risk Management Identify Risk Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Response Monitor and Control Risks Enter phase/ Start project Exit phase/ End project Initiating Processes Closing Processes Planning Processes Executing Processes Monitoring & Controlling Processes
  3. 3. Project Risk Management • Risk is an uncertain event or condition that, if occurs, has an effect on at least one project objective.
  4. 4. – increase the probability and impact of positive events (opportunities). – decrease the probability and impact of negative events (threat). Risk management objectives
  5. 5. •address the level of risk a project manager or a key stakeholder is willing to take when money at stake is compared to the potential payoff. Risk tolerance
  6. 6. Prefers an uncertain outcome and may be willing to pay a penalty to take a high risk Risk Seeker
  7. 7. Risk Averter Not likely to take a risk that is considered a high risk
  8. 8. Plan Risk Management • The process of defining how to conduct risk management activities for a project. Inputs 1. Project scope statement 2. Cost management plan 3. Schedule management plan 4. Communication management plan 5. Enterprise environmental factors 6. Organizational process assets Tools & Techniques 1. Planning meetings and analysis Outputs 1. Risk management plan
  9. 9. Planning Meetings and Analysis - plans for conducting the risk management activities - Risk management responsibilities -templates for risk categories -definitions of terms such as levels of risk, and the probability and impact matrix
  10. 10. Risk Management Plan • Risk management plan describe how risk management will be structured and performed on the project. . Methodology (Defines the approaches, tools, and data sources) • Roles & responsibilities (Defines the lead, support, and risk management team members) • Budgeting (Assigns resources, estimates funds needed) • Timing (when and how often the risk management process ) • Risk categories. (Provides a structure that ensures a comprehensive process of systematically identifying risks ).
  11. 11. Risk Management Plan -Definition of probability and impact -Stakeholder tolerances • Reporting formats how the outcomes of the risk management processes will be documented, analyzed, and communicated. • Tracking how risk activities will be recorded and how risk management processes will be audited. • Probability and impact matrix (Risks are prioritized according to their potential implications for having an effect on the project’s objectives.
  12. 12. Project Title: Date Prepared: Methods and Approaches: Describe the methodology or approach to risk management. Provide information on how each of the risk management processes will be carried out, including whether quantitative risk analysis will be performed and under what circumstances. Tools and Techniques: Describe the tools, such as a risk breakdown structure, and techniques, such as interviewing, Delphi technique, etc., that will be used for each process. Roles and Responsibilities: Describe the roles and responsibilities for various risk management activities. Risk Categories: Identify any categorization groups used to sort and organize risks. These can be used to sort risks on the risk register or for a risk breakdown structure, if one is used. Stakeholder Risk Tolerance: Describe the risk tolerance levels of the organization(s) and key stakeholders on the project. Risk management plan
  13. 13. Definitions of Probability: Terms used to measure probability, such as Very Low – Very High, or .01-1.0. Describe the ways of measuring probability: the difference between very high and high probability, etc.. If using a numeric scale, identify the spread between bands of probability (.05, .1, .2, .4, or .2, .4, .6, .8). Definitions of Impact by Objective: Specify terms used to measure impact, such as Very Low – Very High, or .01-1.0. Describe the ways of measuring impact on each objectives. Objectives other than the ones listed here can be used. Define the difference between very high and high impact on the objective. If using a numeric scale, identify the spread between bands of impact (.05, .1, .2, .4, or .2, .4, .6, .8). Note that the impacts on individual objectives may be different if one objective is more important than another.
  14. 14. Probability and Impact Matrix: Risk Management Funding: Define the funding needed to perform the various risk management activities, such as utilizing expert advice or transferring risks to a third party. Contingency Protocols: Describe the guidelines for establishing, measuring, and allocating both budget contingency and schedule contingency. Describe the frequency of conducting formal risk management activities and the timing of any specific activities. Frequency and Timing: Describe how often the risk management process will be audited, which aspects will be audited, and how discrepancies will be addressed. Risk Audit Approach
  15. 15. Identify Risk • the process of determining which risks may affect the project and documenting their characteristics Inputs .1 Risk management plan .2 Activity cost estimates .3 Activity duration estimates .4 Scope baseline .5 Stakeholder register .6 Cost management plan .7 Schedule management plan .8 Quality management plan .9 Project documents .10 Enterprise environmental factors .11 Organizational process assets Tools & Techniques 1. Documentation reviews 2. Information gathering techniques 3. Checklist analysis 4. Assumptions analysis 5. Diagramming techniques 6. SWOT analysis 7. Expert judgment Outputs 1. Risk register
  16. 16. • Documentation Reviews -review of project documentation, including plans, assumptions, previous project files, contracts, and other information. -The quality of the plans, as well as consistency between those plans and the project requirements and assumptions, can be indicators of risk in the project.
  17. 17. • Information gathering techniques – Brainstorming – Delphi technique: – Interviewing – Root cause analysis:
  18. 18. •Examines project from all SWOT perspectives: • Strength • Weakness • Opportunity • Threats SWOT Analysis
  19. 19. • .3 Checklist Analysis - developed based on historical information - The team should make sure to explore items that do not appear on the checklist. - The checklist should be reviewed during project closure to incorporate new lessons learned .
  20. 20. Diagramming Techniques • Cause and effect diagrams useful for identifying causes of risks. • System or process flow charts. These show how various elements of a system interrelate, and the mechanism of causation • Influence diagrams. These are graphical representations of situations showing causation influences,
  21. 21. Risk Register List of identified risks. -the list of identified risks, -The root causes of those risks -the fundamental conditions of risks List of potential responses. - Potential responses to a risk may sometimes be identified during the Identify Risks process. Include
  22. 22. RISK REGISTER Project Title: Date Prepared: Risk ID Risk Statement Probability Impact Score Response Scope Quality Schedule Cost Description of the risk event or circumstance. Likelihood of occurrence Impact on each objective if it does occur. Probabili ty X impact. Description of planned response strategy to the risk event. Revised Probabil ity Revised Impact Revised Score Responsible Party Actions Status Comments Scop e Quality Schedul e Cost Likelihoo d after the response strategy. Revised impact on each objective after the response strategy. Revised probabili ty X impact Who will follow through on the risk and response. Actions that need to be taken to address the risk. Open or closed. Any comments that provide information about the risk.
  23. 23. Perform Qualitative Risk Analysis • The process of prioritizing risks for further analysis of action by assessing and combining their probability of occurrence and impact. Inputs 1. Risk register 2. Risk management plan 3. Project scope statement 4. Organizational process assets Tools & Techniques 1. Risk probability and impact assessment 2. Probability and impact matrix 3. Risk data quality assessment 4. Risk categorization 5. Risk urgency assessment 6. Expert judgment Outputs 1. Risk register updates
  24. 24. Probability Impact Matrix • Different matrices can be used for cost, time, scope • It helps guide risk responses (priority action & response strategies)
  25. 25. Risk Data Quality Assessment A qualitative risk analysis requires accurate data . Analysis of the quality of risk data is a technique to evaluate the degree to which the data about risks are useful for risk management.
  26. 26. Risk Breakdown Structure (RBS) • Showing risk categorization • Help to ensure a comprehensive process of systematically identifying risk to a consistent level of detail
  27. 27. Risk Urgency Assessment -Risks requiring near-term responses may be considered more urgent to address. -the assessment of risk urgency can be combined with the risk ranking from the probability and impact matrix to give a final risk severity rating.
  28. 28. Risk Register Updates • Update/add additional information to previous output i.e. Risk Register, which include: – Relative ranking/priority – Risk grouped by categories – List of risk requiring additional analysis in the near term – List of risk for additional analysis and response – Watch-list (non-critical or non-top risks) – Trends – Cause of risk requiring particular attention
  29. 29. QUESTIONS?
  30. 30. 1-During which stage of Risk planning are risks prioritized based on probability and -impact? A-Identify Risks B-Risk management plan C-Perform Qualitative risk analysis D-Perform Quantitative risk analysis
  31. 31. 2-Mohamed has joined as the Project Manager of a project. One of the project documents available to Mohamed lists down all the risks in a hierarchical fashion. What is this document called? A-Risk Management Plan. B-List of risks. C-Risk register D-Risk Breakdown Structure
  32. 32. 3- Project risk management includes all the processes concerned with conducting risk management planning, identification, analysis, responses, and monitoring and control on a project. In this context, all the following statements about risk are accurate EXCEPT: A- Risk is an uncertain event or condition B- Risks have to be identified and properly managed C- Risk Management should be done throughout the project D- Risk has only negative impact on the project objective
  33. 33. 4- you have just been assigned as the project manager for a sizeable engineering project, and you want to quickly review the projects Procedures for managing risk . What would be the most helpful in finding this information? A- a risk register B- a risk management plan C- environment process assets D- a risk impact matrix
  34. 34. Thank you