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What is Advanced Project Risk Management?


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What is Advanced Project Risk Management?

  1. 1. What is Advanced Project Risk Management? Rubin Jen, P. Eng, PMP Beyond Execution March 3, 2011
  2. 2. About The Speaker <ul><li>Rubin is a speaker, writer, teacher and consultant of project management </li></ul><ul><ul><li>PM for 15 yrs across several industries </li></ul></ul><ul><ul><li>Presented at PMI Global Congress, ProjectWorld Toronto, PMI Ottawa Symposium </li></ul></ul><ul><ul><li>Served on board of directors for the PMI Southern Ontario Chapter from 2005-2007 </li></ul></ul><ul><ul><li>Project Management training on Risk, Scope and PMP </li></ul></ul>
  3. 3. Agenda <ul><li>What is Advanced Project Risk Management? </li></ul><ul><li>How can it help? </li></ul><ul><li>What should I know? </li></ul><ul><li>How can I use and implement it? </li></ul>
  4. 4. What’s Your Opinion? <ul><li>What do you think Advanced Project Risk Management (APRM) is? </li></ul>
  5. 5. Different Ideas around APRM Risk Database Probabilistic analysis Monte Carlo Insurance Attack Risk Visualization Confidence Levels Delphi Opportunity Management Risk Communication Issues Analysis Bubble Graphs Quantitative Analysis Risk Project Manager Audits Predictive Metrics Risk Breakdown Structure Range Estimates Risk Awareness Risk Tolerance Calibration Qualitative Analysis Lessons Learned Urgency Risk Reporting Enterprise Risk Management Monitoring & Control
  6. 6. Common Perception <ul><li>Most Project Managers would likely consider APRM as deeper in Risk Analysis </li></ul><ul><ul><li>Software analysis (Monte Carlo, probabilistic analysis) </li></ul></ul><ul><ul><li>Quantification, cost analysis </li></ul></ul><ul><ul><li>Expected Monetary Value, decision trees </li></ul></ul><ul><li>What about Risk Planning, Identification, Response and Monitoring & Control? </li></ul>
  7. 7. So, What Is It? <ul><li>To understand this better, we need to understand what is “regular” project risk management, as well as what we mean by “Advanced” </li></ul>
  8. 8. Risk Management <ul><li>Risk: </li></ul><ul><ul><li>The effect of uncertainty on objectives </li></ul></ul><ul><li>Risk Management: </li></ul><ul><ul><li>The identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events </li></ul></ul>
  9. 9. Project Risk Management <ul><li>Project Risk Management: </li></ul><ul><ul><li>The processes of conducting risk management planning, identification, analysis, response planning and monitoring & control on a project </li></ul></ul>
  10. 10. What is “Advanced”? <ul><li> </li></ul><ul><ul><li>placed ahead or forward </li></ul></ul><ul><ul><li>ahead or far or further along in progress, complexity, knowledge, skill, etc </li></ul></ul><ul><ul><li>pertaining to or embodying ideas, practices, attitudes, etc., taken as being more enlightened or liberal than the standardized, established, or traditional </li></ul></ul>
  11. 11. Advanced Project Management <ul><li>The use of tools, techniques and practices that are above the standard, to enable better decisions and more effective project management </li></ul><ul><ul><li>Different tools </li></ul></ul><ul><ul><li>Different techniques </li></ul></ul><ul><ul><li>Different processes </li></ul></ul><ul><ul><li>Different level of thinking </li></ul></ul>
  12. 12. Proposed APRM Principles <ul><li>Further reduction of uncertainty </li></ul><ul><li>More effective response plans </li></ul><ul><li>Higher level competency and skills </li></ul>
  13. 13. Reduction of Uncertainty <ul><li>Greater clarity and understanding of risks </li></ul><ul><li>More detailed analysis </li></ul><ul><li>Uncover hidden information and trends </li></ul>Better Assessment
  14. 14. More Effective Response Plans <ul><li>Improved prioritization </li></ul><ul><li>Greater option development </li></ul><ul><li>More effective project management </li></ul>Better Decisions
  15. 15. Competency and Skills <ul><li>Risk ownership </li></ul><ul><li>Training </li></ul><ul><li>Risk awareness </li></ul><ul><li>Increased teamwork, buy-in & performance </li></ul>Better Performance
  16. 16. What should I know?
  17. 17. Define Your Objectives <ul><li>Better decisions </li></ul><ul><ul><li>Tools & techniques, processes, decision tree </li></ul></ul><ul><li>Better performance </li></ul><ul><ul><li>Visualization, buy-in </li></ul></ul><ul><ul><li>Team awareness </li></ul></ul><ul><li>Better assessment </li></ul><ul><ul><li>Monte Carlo </li></ul></ul><ul><ul><li>Timeframe/urgency </li></ul></ul>
  18. 18. APRM Outcomes <ul><li>Better Decisions </li></ul><ul><ul><li>Increased identification </li></ul></ul><ul><ul><li>Delphi technique </li></ul></ul><ul><ul><li>Risk audits </li></ul></ul><ul><ul><li>Risk breakdown structures </li></ul></ul><ul><ul><li>Attacking risk </li></ul></ul><ul><ul><li>Mitigation and contingency plans </li></ul></ul><ul><ul><li>Decision trees </li></ul></ul>
  19. 19. APRM Outcomes <ul><li>Better Performance </li></ul><ul><ul><li>Risk management training </li></ul></ul><ul><ul><li>Team involvement </li></ul></ul><ul><ul><li>Risk awareness </li></ul></ul><ul><ul><li>Team meetings </li></ul></ul><ul><ul><li>Visualization </li></ul></ul><ul><ul><ul><li>Visual Ishikawa Risk Technique (VIRT) </li></ul></ul></ul><ul><ul><ul><li>Heat map/bubble chart </li></ul></ul></ul>
  20. 20. APRM Outcomes <ul><li>Better Assessment </li></ul><ul><ul><li>Monte Carlo simulation </li></ul></ul><ul><ul><li>Increased subjective range assessment </li></ul></ul><ul><ul><li>Confidence level estimation </li></ul></ul><ul><ul><li>Range estimates </li></ul></ul><ul><ul><li>Probabilistic/statistical analysis </li></ul></ul><ul><ul><li>Weighted scoring </li></ul></ul><ul><ul><li>Urgency </li></ul></ul>
  21. 21. Implementation Costs <ul><li>Risk management has been a difficult realm to show ROI </li></ul><ul><li>Some risk tools & techniques can cost a lot but provide very little improvement in return </li></ul><ul><li>It’s not just about software </li></ul>
  22. 22. How Can I Use It?
  23. 23. Choosing APRM <ul><li>Which parameters provide the maximum effectiveness for the minimum amount of time? (biggest bang for the buck?) </li></ul><ul><ul><li>Techniques that are simpler and practical </li></ul></ul><ul><ul><li>Knowledge that can be easily shared and explained to others </li></ul></ul><ul><ul><li>Techniques that can involve others </li></ul></ul><ul><ul><li>Visualization </li></ul></ul><ul><ul><li>Better risk prioritization </li></ul></ul>
  24. 24. Better Decision Techniques Decision trees Mitigation/contingency plans Attacking risk Risk breakdown structures Risk audits Delphi technique Increased identification Prioritization Graphical Collaborative Techniques Knowledge Transfer Simple Technique
  25. 25. Better Performance Techniques Heat map/bubble chart VIRT Team meetings Risk awareness Team involvement Training Prioritization Graphical Collaborative Techniques Knowledge Transfer Simple Technique
  26. 26. Better Assessment Techniques Urgency Weighted scoring Probabilistic analysis Range estimates Confidence level Increased range Monte Carlo Prioritization Graphical Collaborative Techniques Knowledge Transfer Simple Technique
  27. 27. Implementing APRM <ul><li>Understand and assess risk stakeholders </li></ul><ul><ul><li>Champions </li></ul></ul><ul><ul><li>By-standers </li></ul></ul><ul><ul><li>End users </li></ul></ul><ul><li>Continual education and communication </li></ul><ul><li>See results <-> creates buy-in </li></ul><ul><li>Create mini case studies of successes </li></ul><ul><li>Know each techniques’ implementation costs </li></ul>
  28. 28. Are We Done Yet?
  29. 29. Summary <ul><li>There are a number of ways to be &quot;advanced&quot; but don't confine yourself to simply analysis tools </li></ul><ul><li>Utilizing APRM is like a project management process: </li></ul><ul><ul><li>Understand what your needs are, then choose an appropriate technique(s) </li></ul></ul>
  30. 30. Contact Information <ul><li>Name: Rubin Jen, P. Eng, PMP </li></ul><ul><li>Email: [email_address] </li></ul><ul><li>Phone: (416) 618-1734 </li></ul>