This document discusses project risk management. It defines risk management and outlines the key processes: planning, identification, analysis, response planning, and monitoring. It describes performing qualitative risk analysis to assess the likelihood and impact of identified risks. This involves using tools like probability and impact matrices to prioritize risks. The output is an updated risk register containing the qualitative analysis results.
EFFECTIVE RISK MANAGEMENT IN CONSTRUCTION PROJECTSvivatechijri
Risk management can be directly related to the successful project completion as it is very much
essential. Project management literature describes a detailed and widely accepted risk management process,
which is constructed basically from four iterative phases: risk identification, risk estimation, risk response
planning and execution, often managing the risk management process is included. Construction project planning is
an essential element in the management and execution of construction projects which involves the definition of
work tasks and their interactions as well as the assessment of required resource sand expected activity durations.
The study, therefore, examined the awareness of professionals in construction industry of the various types of
planning techniques and tools used on construction sites, Questionnaires were administered on selected building
professionals (Project Managers, Engineers, Architects), and Contractors and Sub-contractors directly involved
in construction work on sites in planning and the use of planning tools and techniques as major tools for successful
project execution
EFFECTIVE RISK MANAGEMENT IN CONSTRUCTION PROJECTSvivatechijri
Risk management can be directly related to the successful project completion as it is very much
essential. Project management literature describes a detailed and widely accepted risk management process,
which is constructed basically from four iterative phases: risk identification, risk estimation, risk response
planning and execution, often managing the risk management process is included. Construction project planning is
an essential element in the management and execution of construction projects which involves the definition of
work tasks and their interactions as well as the assessment of required resource sand expected activity durations.
The study, therefore, examined the awareness of professionals in construction industry of the various types of
planning techniques and tools used on construction sites, Questionnaires were administered on selected building
professionals (Project Managers, Engineers, Architects), and Contractors and Sub-contractors directly involved
in construction work on sites in planning and the use of planning tools and techniques as major tools for successful
project execution
Recently, Construction IQ conducted an online survey on construction project risk management. Some valuable statistics emerged from the results. Have a look at what your colleagues and peers in the industry had to say…
A Study on Risk Assessment in Construction ProjectsIJMER
Risks are very common in construction sector. Risk management includes identifying risks,
assessing risks either quantitatively or qualitatively, choosing the appropriate method for handling the
risks, and then monitoring and documenting risks. By identifying risks in an early stage of planning and
assessing their relative importance, project managers can identify methods used to reduce risks and
allocate the best people to mitigate them. Thus, this research focuses on risk identification, as opposed
to other processes of risk management. "Brain-storming sessions" is the most popular method used
frequently to identify the risks in projects as deduced from a questionnaire survey from participants in
large construction projects. Time and cost management need to be fully integrated with the
identification process. Time constraints and project managers with sufficient experience are critical
when identifying the level of risk for large and/or complex projects. The most considerable types of risk
in construction projects are financial risks, construction risks, and demand or product risks
Software Project Risk Management Practice in OmanEECJOURNAL
Oman is a member of Gulf Cooperation Council (GCC). It is located in Southwest Asia and it has strategic significant boundaries, Overlooking the Arabian Sea, Gulf of Oman, and the Persian Gulf. It is the 80th in Global Innovation Index in 2019 and 63 in E-Government Development Index in 2018. Oman is an effective member of the Greater Arab Free Trade Agreement (GAFTA) and the World Trade Organization (WTO). Furthermore, Oman's government has continued efforts to develop local and foreign investments by signing a Free Trade Agreement (FTA) with the USA. Oman plays a significant role in investments due to its strategic location connected to the markets in the Gulf, the Middle East, Asia, and Africa. Oman's vision is to involve all new technologies to be always beside the developed countries. To achieve that, Oman established The Government Innovation Initiative to encourage government entities in creativity and introduce their suggestions to enhance governmental performance and enhance the efficiency in different fields. This is realized by involving modern technologies like the Internet of Things (IoT), Artificial Intelligence (AI), Cloud Computing, Virtual Reality Applications, and Blockchain. In Oman, the risk management approach is a core technique. Three major stages are applied systematically in risk management in software projects. These stages involve a) identifying the risk; b) analyzing and assessing the risk, and c) reaction to the risk. There is no doubt that the high risk belonged to business will have negative impacts on all of its participants. Wherefore, this paper sheds the light on that knowledge area. The aim of this paper is to review the present literature on risk management processes implemented in software projects. There is a dearth in the literature which covers the risk management area knowledge in Oman's organizations. This paper target finding out the commonly used frameworks or mechanisms in risk management in software projects. It also tries to collect the responses to state the various types of risk origins in the existing profit and non-profit organizations in Oman and to recognize the coming research trends in this area.
International Journal of Engineering and Science Invention (IJESI)inventionjournals
International Journal of Engineering and Science Invention (IJESI) is an international journal intended for professionals and researchers in all fields of computer science and electronics. IJESI publishes research articles and reviews within the whole field Engineering Science and Technology, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
A study of various factors affecting risk management techniques in constructi...eSAT Journals
Abstract
Risk management is an important step which should not be neglect or ignore in every project. Because of various risk involved in construction, it is difficult to maintain time, cost and quality as planned. Project undertaken in the construction sector are widely complex and have often significant budgets, and thus reducing the risk associated should be a priority for each project manager. The main purpose of this paper is to identify the key risk factors that affect construction project. Questionnaires has been prepared incorporating of 50 difference questions after which questionnaire survey was conducted where the questions has been focused based on (component of questionnaire) the respondents were selected based on their susceptibility to the risk. The data was analyzed using the Statistical package for social sciences (SPSS) version 21. The result shows that the inadequate planning in construction project, poor adoption of site safety, supply and use of defective materials and poor resources management in construction project are all among the forefront key risk factors which affect construction project, meanwhile, effective recommendations have been developed to increases the efficiency, speedy and minimises risk and abortive work in construction project.
Keywords: Construction Industries, Construction Projects, Risks Management, Techniques
RISK MANAGEMENT IN CONSTRUCTION PROJECTS AS PER INDIAN SCENARIOIAEME Publication
Construction industry is highly risk prone, with complex and dynamic project
environments creating an atmosphere of high uncertainty and risk. The industry is
vulnerable to various technical, sociopolitical and business risks. The track record
to cope with these risks has not been very good in construction industry. As a
result, the people working in the industry bear various failures, such as, failure of
abiding by quality and operational requirements, cost overruns and uncertain delays
in project completion. In light of this, it can be said that an effective systems of risk
assessment and management for construction industry remains a challenging task
for the industry practitioners. The aim of the this research is to identify and evaluate
current risks and uncertainties in the construction industry through extensive
literature survey and aims to make a basis for future studies for development of a
risk management framework to be adopted by prospective investors, developers and
contractors
EFFECTS OF RISK MANAGEMENT METHODS ON PROJECT PERFORMANCE IN RWANDAN CONSTRUC...Sibo Kanyambari Aimable
Risks are very common in construction sector. Risk is the Possibility of suffering loss and the impact on the involved parties. According to APM (2006), all projects are inherently risky because they are unique, constrained, complex, based on assumptions, and performed by people. As a result, project risk management methods must be built into the management of projects and should be used throughout the project lifecycle.
Many construction projects fail because organizations assume that all the projects would succeed and they therefore do not identify, analyze, and provide mitigation or contingencies for the risk elements involved in the project.
Society desires that all projects should be performing and has become less tolerant of failure (Edwards and Bowen, 2005). Pressure is exerted on project managers to minimize the chance of project failure. This increasing pressure for performance which suggests that it is prudent for anyone involved in a project to be concerned about the associated risks and how they can be effectively managed.
Traditionally, performance of a project is analyzed on the criteria of quality, budget and time of completion. Two more criteria to determine the performance of a project were added by Kerzner (2001). Firstly, the project would effectively and efficiently manage risks and, secondly, it should be accepted by the customer.
It is known that the cause of the projects failure can be directly related to the extent of risk management methods undertaken. Besides, the level of risk management methods undertaken during project lifecycle impacts directly on the performance or otherwise of the project. Furthermore, using risk management methods effectively to manage risk should be continuously undertaken throughout the project lifecycle to enhance project performance. Risk management methods are thus an important tool to cope with such substantial risks in projects performance.
The main objective of the enquiry work that underpins this research is to investigate the effect of risk management methods on project performance. In this paper, a case study of RSSB multi-storey already executed project is considered.
Risks have a significant impact on a construction
project’s performance in terms of cost, time and quality. As
the size and complexity of the projects have increased, an
ability to manage risks throughout the construction process
has become a central element preventing unwanted
consequences. How risks are shared between the project
actors is to a large extent governed by the procurement
option and the content of the related contract documents.
Therefore, selecting an appropriate project procurement
option is a key issue for project actors.
The overall aim of this research is to increase the
understanding of risk management in the different
procurement options: design-bid-build contracts, designbuild contracts and collaborative form of partnering. Deeper
understanding is expected to contribute to a more effective
risk management and, therefore, a better project output and
better value for both clients and contractors. The study
involves nine construction projects recently performed in
Sweden and comprises a questionnaire survey and a series of
interviews with clients, contractors and consultants involved
in these construction projects.
The findings of this work show a lack of an iterative
approach to risk management, which is a weakness in current
procurement practices. This aspect must be addressed if the
risk management process is to serve projects and, thus, their
clients. The absence of systematic risk management is
especially noted in the programme phase, where it arguably
has the greatest potential impact. The production phase is
where most interest and activity are to be found. As a matter
of practice, the communication of risks between the actors
simply does not work to the extent that it must if projects are
to be delivered with certainty, irrespective of the form of
procurement.
A clear connection between the procurement option
and risk management in construction projects has been
found. Traditional design-bid-build contracts do not create
opportunities for open discussion of project risks and joint
risk management. A number of drivers of and obstacles to
effective risk management have been explored in the study.
Every actor’s involvement in dialogue, effective
communication and information exchange, open attitudes
and trustful relationship are the factors that support open
discussion of project risks and, therefore, contribute to
successful risk management.
Based on the findings, a number of recommendations
facilitating more effective risk management have been
developed for the industry practitioners.
RISK MANAGEMENT IN HIGH RISE CONSTRUCTION PROJECTS IN SURAT CITYA Makwana
This paper gives information about identification of risk factors and perceptions of Indian construction practitioners i.e., contractors, owners, project managers and Engineers on the importance of different construction risks and how the risks should be assigned between the different parties of the contract. As the very common project styles, construction projects have so many characteristics likewise time limitation, specific items, financial restrictions and requirements, extraordinary structural and legal situations, complexity features. For this situation every construction project has own complex method. Risks constantly happen at construction projects and frequently cause time overrun or cost overrun. If you don’t contemplate these risk factors, or neglect the main factors, these risk factors will affect the damage because of the managerial errors. Risk management is the process which covers to identify the risks, for assessment with the help of qualitatively and quantitatively, to response with appropriate technique for management and controlling. The concept has gain popularity in various industries. Various companies frequently found the method in their projects for upgrading their performance, reducing their losses and increasing their profits. Questionnaire survey among clients, contractors, engineers and architects is analysed using, Relative Importance Index (RII)) method. The focus of this study is to understand what Risk Management is, understand the process of risk management at construction project and have depth knowledge on the use of risk management in high-rise construction projects.
Exploring the risk factors associated with peb projects in lahore.Rizwan Khurram
The construction industry is more exposed to risk than other industry. If the risk is not handled properly it may causes the poor performance on the industry. The Scale of building projects is large in nature and having large amount of investment. Wastage of any resource influence is high loss in project. All the losses are associated with risk factors. In Pakistan, only few researches have been done so far in this area. Thus this study needs focus of risk management in field of construction projects. We conclude from study that financial issue, skillful workers, shortage and inaccurate design are significant risk factors affecting the projects. Contractors are responsible for risk linked with machinery, material and quality related issues. While clients are responsible for the risk associated with scope of work. Study concludes that good coordination and communication between stakeholders and proper drawings works are key factors to control the project.
Recently, Construction IQ conducted an online survey on construction project risk management. Some valuable statistics emerged from the results. Have a look at what your colleagues and peers in the industry had to say…
A Study on Risk Assessment in Construction ProjectsIJMER
Risks are very common in construction sector. Risk management includes identifying risks,
assessing risks either quantitatively or qualitatively, choosing the appropriate method for handling the
risks, and then monitoring and documenting risks. By identifying risks in an early stage of planning and
assessing their relative importance, project managers can identify methods used to reduce risks and
allocate the best people to mitigate them. Thus, this research focuses on risk identification, as opposed
to other processes of risk management. "Brain-storming sessions" is the most popular method used
frequently to identify the risks in projects as deduced from a questionnaire survey from participants in
large construction projects. Time and cost management need to be fully integrated with the
identification process. Time constraints and project managers with sufficient experience are critical
when identifying the level of risk for large and/or complex projects. The most considerable types of risk
in construction projects are financial risks, construction risks, and demand or product risks
Software Project Risk Management Practice in OmanEECJOURNAL
Oman is a member of Gulf Cooperation Council (GCC). It is located in Southwest Asia and it has strategic significant boundaries, Overlooking the Arabian Sea, Gulf of Oman, and the Persian Gulf. It is the 80th in Global Innovation Index in 2019 and 63 in E-Government Development Index in 2018. Oman is an effective member of the Greater Arab Free Trade Agreement (GAFTA) and the World Trade Organization (WTO). Furthermore, Oman's government has continued efforts to develop local and foreign investments by signing a Free Trade Agreement (FTA) with the USA. Oman plays a significant role in investments due to its strategic location connected to the markets in the Gulf, the Middle East, Asia, and Africa. Oman's vision is to involve all new technologies to be always beside the developed countries. To achieve that, Oman established The Government Innovation Initiative to encourage government entities in creativity and introduce their suggestions to enhance governmental performance and enhance the efficiency in different fields. This is realized by involving modern technologies like the Internet of Things (IoT), Artificial Intelligence (AI), Cloud Computing, Virtual Reality Applications, and Blockchain. In Oman, the risk management approach is a core technique. Three major stages are applied systematically in risk management in software projects. These stages involve a) identifying the risk; b) analyzing and assessing the risk, and c) reaction to the risk. There is no doubt that the high risk belonged to business will have negative impacts on all of its participants. Wherefore, this paper sheds the light on that knowledge area. The aim of this paper is to review the present literature on risk management processes implemented in software projects. There is a dearth in the literature which covers the risk management area knowledge in Oman's organizations. This paper target finding out the commonly used frameworks or mechanisms in risk management in software projects. It also tries to collect the responses to state the various types of risk origins in the existing profit and non-profit organizations in Oman and to recognize the coming research trends in this area.
International Journal of Engineering and Science Invention (IJESI)inventionjournals
International Journal of Engineering and Science Invention (IJESI) is an international journal intended for professionals and researchers in all fields of computer science and electronics. IJESI publishes research articles and reviews within the whole field Engineering Science and Technology, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
A study of various factors affecting risk management techniques in constructi...eSAT Journals
Abstract
Risk management is an important step which should not be neglect or ignore in every project. Because of various risk involved in construction, it is difficult to maintain time, cost and quality as planned. Project undertaken in the construction sector are widely complex and have often significant budgets, and thus reducing the risk associated should be a priority for each project manager. The main purpose of this paper is to identify the key risk factors that affect construction project. Questionnaires has been prepared incorporating of 50 difference questions after which questionnaire survey was conducted where the questions has been focused based on (component of questionnaire) the respondents were selected based on their susceptibility to the risk. The data was analyzed using the Statistical package for social sciences (SPSS) version 21. The result shows that the inadequate planning in construction project, poor adoption of site safety, supply and use of defective materials and poor resources management in construction project are all among the forefront key risk factors which affect construction project, meanwhile, effective recommendations have been developed to increases the efficiency, speedy and minimises risk and abortive work in construction project.
Keywords: Construction Industries, Construction Projects, Risks Management, Techniques
RISK MANAGEMENT IN CONSTRUCTION PROJECTS AS PER INDIAN SCENARIOIAEME Publication
Construction industry is highly risk prone, with complex and dynamic project
environments creating an atmosphere of high uncertainty and risk. The industry is
vulnerable to various technical, sociopolitical and business risks. The track record
to cope with these risks has not been very good in construction industry. As a
result, the people working in the industry bear various failures, such as, failure of
abiding by quality and operational requirements, cost overruns and uncertain delays
in project completion. In light of this, it can be said that an effective systems of risk
assessment and management for construction industry remains a challenging task
for the industry practitioners. The aim of the this research is to identify and evaluate
current risks and uncertainties in the construction industry through extensive
literature survey and aims to make a basis for future studies for development of a
risk management framework to be adopted by prospective investors, developers and
contractors
EFFECTS OF RISK MANAGEMENT METHODS ON PROJECT PERFORMANCE IN RWANDAN CONSTRUC...Sibo Kanyambari Aimable
Risks are very common in construction sector. Risk is the Possibility of suffering loss and the impact on the involved parties. According to APM (2006), all projects are inherently risky because they are unique, constrained, complex, based on assumptions, and performed by people. As a result, project risk management methods must be built into the management of projects and should be used throughout the project lifecycle.
Many construction projects fail because organizations assume that all the projects would succeed and they therefore do not identify, analyze, and provide mitigation or contingencies for the risk elements involved in the project.
Society desires that all projects should be performing and has become less tolerant of failure (Edwards and Bowen, 2005). Pressure is exerted on project managers to minimize the chance of project failure. This increasing pressure for performance which suggests that it is prudent for anyone involved in a project to be concerned about the associated risks and how they can be effectively managed.
Traditionally, performance of a project is analyzed on the criteria of quality, budget and time of completion. Two more criteria to determine the performance of a project were added by Kerzner (2001). Firstly, the project would effectively and efficiently manage risks and, secondly, it should be accepted by the customer.
It is known that the cause of the projects failure can be directly related to the extent of risk management methods undertaken. Besides, the level of risk management methods undertaken during project lifecycle impacts directly on the performance or otherwise of the project. Furthermore, using risk management methods effectively to manage risk should be continuously undertaken throughout the project lifecycle to enhance project performance. Risk management methods are thus an important tool to cope with such substantial risks in projects performance.
The main objective of the enquiry work that underpins this research is to investigate the effect of risk management methods on project performance. In this paper, a case study of RSSB multi-storey already executed project is considered.
Risks have a significant impact on a construction
project’s performance in terms of cost, time and quality. As
the size and complexity of the projects have increased, an
ability to manage risks throughout the construction process
has become a central element preventing unwanted
consequences. How risks are shared between the project
actors is to a large extent governed by the procurement
option and the content of the related contract documents.
Therefore, selecting an appropriate project procurement
option is a key issue for project actors.
The overall aim of this research is to increase the
understanding of risk management in the different
procurement options: design-bid-build contracts, designbuild contracts and collaborative form of partnering. Deeper
understanding is expected to contribute to a more effective
risk management and, therefore, a better project output and
better value for both clients and contractors. The study
involves nine construction projects recently performed in
Sweden and comprises a questionnaire survey and a series of
interviews with clients, contractors and consultants involved
in these construction projects.
The findings of this work show a lack of an iterative
approach to risk management, which is a weakness in current
procurement practices. This aspect must be addressed if the
risk management process is to serve projects and, thus, their
clients. The absence of systematic risk management is
especially noted in the programme phase, where it arguably
has the greatest potential impact. The production phase is
where most interest and activity are to be found. As a matter
of practice, the communication of risks between the actors
simply does not work to the extent that it must if projects are
to be delivered with certainty, irrespective of the form of
procurement.
A clear connection between the procurement option
and risk management in construction projects has been
found. Traditional design-bid-build contracts do not create
opportunities for open discussion of project risks and joint
risk management. A number of drivers of and obstacles to
effective risk management have been explored in the study.
Every actor’s involvement in dialogue, effective
communication and information exchange, open attitudes
and trustful relationship are the factors that support open
discussion of project risks and, therefore, contribute to
successful risk management.
Based on the findings, a number of recommendations
facilitating more effective risk management have been
developed for the industry practitioners.
RISK MANAGEMENT IN HIGH RISE CONSTRUCTION PROJECTS IN SURAT CITYA Makwana
This paper gives information about identification of risk factors and perceptions of Indian construction practitioners i.e., contractors, owners, project managers and Engineers on the importance of different construction risks and how the risks should be assigned between the different parties of the contract. As the very common project styles, construction projects have so many characteristics likewise time limitation, specific items, financial restrictions and requirements, extraordinary structural and legal situations, complexity features. For this situation every construction project has own complex method. Risks constantly happen at construction projects and frequently cause time overrun or cost overrun. If you don’t contemplate these risk factors, or neglect the main factors, these risk factors will affect the damage because of the managerial errors. Risk management is the process which covers to identify the risks, for assessment with the help of qualitatively and quantitatively, to response with appropriate technique for management and controlling. The concept has gain popularity in various industries. Various companies frequently found the method in their projects for upgrading their performance, reducing their losses and increasing their profits. Questionnaire survey among clients, contractors, engineers and architects is analysed using, Relative Importance Index (RII)) method. The focus of this study is to understand what Risk Management is, understand the process of risk management at construction project and have depth knowledge on the use of risk management in high-rise construction projects.
Exploring the risk factors associated with peb projects in lahore.Rizwan Khurram
The construction industry is more exposed to risk than other industry. If the risk is not handled properly it may causes the poor performance on the industry. The Scale of building projects is large in nature and having large amount of investment. Wastage of any resource influence is high loss in project. All the losses are associated with risk factors. In Pakistan, only few researches have been done so far in this area. Thus this study needs focus of risk management in field of construction projects. We conclude from study that financial issue, skillful workers, shortage and inaccurate design are significant risk factors affecting the projects. Contractors are responsible for risk linked with machinery, material and quality related issues. While clients are responsible for the risk associated with scope of work. Study concludes that good coordination and communication between stakeholders and proper drawings works are key factors to control the project.
Online PMP Training Material for PMP Exam - Risk Management Knowledge AreaGlobalSkillup
Risk Management Knowledge Area in Project management defined by PMBOK 5th Edition by Project Management Institute (PMI). Provided by GlobalSkillup.com towards PMP Certification Exam.
NCV 4 Project Management Hands-On Support Slide Show - Module5Future Managers
This slide show complements the Learner Guide NCV 4 Project Management Hands-On Training by Bert Eksteen, published by Future Managers. For more information visit our website www.futuremanagers.net
If a project manager is consumed with managing risk, there is little time to manage opportunities. Good risk management is not about fear of failure, it is about removing barriers to success. This is when opportunity management emerges.
Episode 25 : Project Risk Management
Understand what risk is and the importance of good project risk management.
Discuss the elements involved in risk management planning and the contents of a risk management plan.
List common sources of risks in engineering and information technology projects.
Describe the risk identification process, tools, and techniques to help identify project risks, and the main output of risk identification, a risk register.
SAJJAD KHUDHUR ABBAS
Chemical Engineering , Al-Muthanna University, Iraq
Oil & Gas Safety and Health Professional – OSHACADEMY
Trainer of Trainers (TOT) - Canadian Center of Human
Development
UCISA Toolkit - Effective Risk Management for Business Change and IT Projects Mark Ritchie
Risk Management is one of the most important tools available to the Project Manager to help successfully deliver complex projects. Yet, at the same time, Risk Management can be difficult to understand and, if used without insight and expertise, costly and ineffective.
This guidance has been developed to assist staff who are managing or participating in IT and business change projects. It has been developed by the UCISA Project and Change Management Group and is based on best practice guidance provided by PRINCE2 and experience of delivering major IT and business change projects at the University of Sheffield, University of Edinburgh, Lancaster University and Edinburgh Napier University.
The guidance is relevant for projects being managed and delivered using any methodology and is complementary to the UCISA Major Project Governance Assessment Toolkit.
This toolkit was published by the UCISA Project and Change Management Group in December 2015.
· How should the risks be prioritized· Who should do the priori.docxalinainglis
· How should the risks be prioritized?
· Who should do the prioritization of the project risks?
· How should project risks be monitored and controlled?
· Who should develop risk responses and contingency plans?
· Who should own these responses and plans?
Introduction
This week, we will explore risk management. Risk management is one of those areas in project management that separates good project managers from great project managers. A good project manager makes risk management an integral part of every phase of project work. Risks are identified, prioritized, and understood. There are clear responsibilities within the team as to whose is responsible for implementing a risk response to reduce the impact should it occur. So let's get started.
What is Risk?
*Risk: An uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives.
Risks can be positive, meaning beneficial to the project, or they can be negative, meaning detrimental to the project.
Many students have a difficult time visualizing positive risks. A positive risk is an opportunity that may increase the probability of success, the return on investment, or the benefits of the project. They may also be ways to reduce project costs or ways to complete the project early. There may even be methods to improve project quality or overall performance. These are all examples of positive risks.
A negative risk can be easier to understand. It is the possibility that something will go wrong, a threat to the success of the project. It is important to remember that a risk is a possibility, not a fact. It is a potential problem. At GettaByte Software, there is the potential that a power outage would occur during data transfer. The potential exists that a key resource could become unavailable due to some unforeseen circumstance, like illness. Those are threats to the success of the project.
When buying a house to renovate, there are potential risks with respect to plumbing, wiring, the foundation, and so on.
A project manager needs to consider trying to make positive risks happen while trying to prevent negative ones from occurring. To do this, a project manager can take a proactive approach to risk management. This means he or she plans a risk response should it look as though the risk will become a reality. In this way, everyone knows exactly how to prepare and respond to the risk once it does become an issue.
The Risk Management Process
A project has both good and bad risks, which are referred to as positive and negative risks or opportunities and threats. For positive risks or opportunities, the project manager can choose from a range of risk responses. For threats, a project manager has a similar range of choices. The following, as described in the PMBOK® Guide, are the risk management processes.
Plan Risk Management:
· Risk Strategy
· Defines the general approach to managing risk on the project
· Methodology
· Defines the specific, tools, .
Develop options and determine actions to enhance opportunities and minimize threats to Departments/project objectives.Assign responsibility to individuals or parties for each risk response.
With uncertainty comes opportunity. But if a project manager is consumed with managing the risks, there is little time to manage the opportunities. Good risk management is not about fear of failure; it is about removing barriers to success. This is when opportunity management emerges.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
How to Create Map Views in the Odoo 17 ERPCeline George
The map views are useful for providing a geographical representation of data. They allow users to visualize and analyze the data in a more intuitive manner.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
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Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
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We all have good and bad thoughts from time to time and situation to situation. We are bombarded daily with spiraling thoughts(both negative and positive) creating all-consuming feel , making us difficult to manage with associated suffering. Good thoughts are like our Mob Signal (Positive thought) amidst noise(negative thought) in the atmosphere. Negative thoughts like noise outweigh positive thoughts. These thoughts often create unwanted confusion, trouble, stress and frustration in our mind as well as chaos in our physical world. Negative thoughts are also known as “distorted thinking”.
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It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
1. 11 PROJECT RISK MANAGEMENT
Objective of This Chapter:
Project risk management includes the processes of conducting risk management planning,
identification, analysis, response planning, and monitoring and control on a project
Risk is an uncertain event or condition that, if it occurs, has an effect on at least one project
objective. Objectives can include scope, schedule, cost, and quality
No construction project is risk free. Risk should be managed, minimised, shared, transferred,
or accepted. But should not be ignored. Most of the small real estate projects the focus of risk
management is mainly limited to cost escalation and material consumption (cement and
steel). Rest of the risks are managed on ad-hoc basis. It is worth mentioning that enlarging the
scope of risk management will surely help small as well as big projects
The objective of risk management is to increase the probability and impact of positive events,
and decrease the probability and impact of negative events in the project. Risk and
uncertainty can potentially have damaging consequences for the construction projects.
Therefore, the risk analysis and management should be a major feature of the
construction projects in an attempt to deal effectively with uncertainty and unexpected events
and to achieve project success.
Many problems which are faced in later phases of construction project are result from
unmanaged risks from the earlier stage. Hence poor risk management can result into
Increased costs due to ad-hoc management
Loss or reduction in profit
Damage to brand / reputation
And in worst case disposal of the business or insolvency
Project risk management is an iterative process: the process is beneficial when is
implemented in a systematic manner throughout the lifecycle of a construction project, from
feasibility to the planning stage and to completion. Though it is highlighted that most case
should be taken during planning and execution phases.
Characteristics of project risks:
Project risk is always in the future.
A risk may have one or more causes and, if it occurs, it may have one or more
impacts. A cause may be a requirement, assumption, constraint, or condition that
creates the possibility of negative or positive outcomes.
Project risk has its origins in the uncertainty present in all projects
Risk has positive or negative impact on project objectives i.e. scope, schedule, cost
and quality
Individuals and groups adopt attitudes toward risk that influence the way they
respond. These risk attitudes are driven by perception, tolerances, and other biases,
which should be made explicit wherever possible Risk attitude depends on
Risk exists the moment a project is conceived.
Moving forward on a project without a proactive focus on risk management increases
the impact that a realized risk can have on the project and can potentially lead to
project failure
2. Important terms in risk management:
Known risks : those that have been identified and analyzed, making it possible to plan
responses for those risks
Specific unknown risks : cannot be managed proactively, which suggests that the
project team should create a contingency plan
Issues : A project risk that has occurred
Risk attitude : depends on
o Risk appetite : degree of uncertainty willing to take in anticipation of rewards
o Risk tolerance : degree of risk that individual or organization can withstand
o Risk threshold : Risk is acceptable below the threshold but not above
Risk response : reflect an organization's perceived balance between risk taking and
risk avoidance. Based on the risk assessment, an appropriate decision is made
regarding further actions or proceeding to the next phase. For each risk use flag 'go',
'maybe' and 'no go' options in a decision making process. A 'go' status will constitute a
green light for proceeding on to the next phase while 'no go' will stop the progress
until effective risk response is put in place. Evaluation resulting in a 'maybe' decision
will lead to return to a previous step or even phases for further improvements and
minimizing risk.
Risk management approach: The level of risk is always related to the project
complexity The fact that there are so many risks which can be identified in the
construction industry, can be explained by the project size and their complexity. The
bigger the project is, the larger the number of potential risks that may be faced.
Several factors can stimulate risk occurrence. Moreover, when all potential risks have
been identified, the project team must remember that there might be more threats.
Therefore, the project team should not solely focus on management of those identified
risks but also be alert for any new potential risks which might arise. The easiest way
to identify risk is to analyze and draw a conclusion from projects which failed in the
past.
3. 11.1 Plan Risk Management
Risk management planning is the process of deciding how to conduct risk management
activities for a project. Careful planning will almost always improve the results from the
other five processes of risk management and is, therefore, time well spent. Risk planning
should begin during the earliest stages of project initiation and should be completed early in
the project planning process
Following points must be clearly defined in risk management plan:
Determine the project’s risk register requirements based on project estimate and
complexity, and the need for a written project Following guide lines can be used for
risk management of projects of various sizes and complexities:
Risk Management Small or low Mid size or medium Big size or high
4. Process complexity project complexity project complexity project
Risk Identification Yes Yes Yes
Qualitative Analysis Risk Rating Probability &
Impact Analysis
Probability &
Impact Analysis
Quantitative Analysis Not Necessary Not Necessary Yes
Risk Response Yes Yes Yes
Risk Monitoring Yes Yes Yes
Populate and maintain the project risk register with risks developed by functional
units and the phases
Ensure proactive response to all risks and opportunities that will impact the successful
delivery of the project.
Decide how risk management will be communicated and discussed with directors
Decide how risk management will be discussed with internal department management
about and external stake holders
Schedule of risk management meetings.
How to monitor and update risks.
Ensure quality of the risk data in the risk register.
Track and monitor the effectiveness of risk response actions
5. 11.1.1 Inputs
11.1.1.1 Project Management Plan : The performance baseline in the areas of scope, time,
and cost may all be affected by risk-related activities.
11.1.1.2 Project Charter : High-level risks, high-level project descriptions, and high- level
requirements are all inputs from the project charter that may be used in planning risk
management.
11.1.1.3 Stakeholder Register : Provides an overview of the roles of the various stakeholders
on the project.
11.1.1.4 EEFs : Risk attitudes, thresholds, and tolerances of the organization.
11.1.1.5 OPAs : Which includes
Risk categories, definitions
Risk statement formulas, templates
Risk-related roles and responsibilities
Authority levels for risk-related decision making
Lessons learned
11.1.2 Tools & Techniques
11.1.2.1 Analytical Techniques : Used to understand and define the overall risk management
context of the project, which is based on a combination of stakeholder risk attitudes and
strategic risk exposure of a given project
6. 11.1.2.2 Expert Judgment : Expertise should be considered from subject matter experts,
project stakeholders, and senior management, and lessons learned from previous projects.
11.1.2.3 Meetings : Used to develop the risk management plan. High level plan for
conducting risk management activities are defined in these meetings
11.1.3 Outputs
11.1.3.1 Risk Management Plan : Describes how risk management activities will be planned
and executed.
The plan may include the following:
Methodology
Roles and responsibility
Budgeting
Timing
Risk categories: may employ information from the RBS (Risk Breakdown Structure)
Definition of probability and impact: how to describe or measure the likelihood that
an event will occur and the effect on project objectives if it does occur.
Probability and impact matrix (more detail under qualitative analysis)
Revised stakeholder tolerances: Risk planning may cause shifts in how much risk is
considered acceptable for a specific project.
Reporting formats
Tracking : How the risk activities will be recorded and audited
11.2 Identify Risks
Risk identification involves determining which risk events are likely to affect the project and
documenting their characteristics. Risk identification is not a one-time event; it is an iterative
process and normally leads to qualitative analysis. New risks may emerge at any time and
continued risk identification should be performed on a regular basis throughout the project.
During the identification of a risk, it may also become apparent what the appropriate response
should be. This information should be recorded for subsequent use in the response planning
process.
Different stakeholders will have different expectations and interests in the project. This
naturally creates problems and confusion for even the most experienced project managers and
contractors on how to manage risk. Still they should jointly look into risk management which
might arise due to following factors
Immature project management practices
Lack of integrated approach to project management
Unmanaged dependency on external participants whose behaviour cannot be
controlled
Failure to recognise and develop responses to risk and opportunity
Lack of timely resolution of issues as raised by various stakeholders
Poor contract and claim administration
Lack of compliance with project and regulatory requirements
Unclear or unattainable project objectives
Tight project schedule
Too many design variations
Unsuitable construction program planning
Occurrence of dispute
7. Price inflation of construction materials
Excessive approval procedures in administrative government departments
Incomplete approval and other documents
Inadequate or insufficient site information (soil test and survey report)
Poor estimation
Budget based on incomplete data
Issues due to contractual problems
Delays due to reasons beyond control of project team or contractors
Quality issues
Insufficient time for testing
Act of god
Inflation and interest rate
Political and regulatory issues
8. Inputs
11.2.1.2 Risk Management Plan : Assigns roles and responsibilities for risk identification,
builds money and time into the plan to accommodate risk identification and provides
information about risk identification and provides information about risk categories that may
be relevant for the current project
11.2.1.2 Cost Management Plan : Processes and controls that can be used to identify risks on
the project.
11.2.1.3 Schedule Management Plan : Project schedule objectives which may be impacted by
risks.
11.2.1.4 Quality Management Plan : Quality measures and metrics for use in identifying
risks.
9. 11.2.1.5 Human Resource Management Plan : Which includes roles and responsibilities,
project organization chart and staffing management plan
11.2.1.6 Scope Baseline : Which includes project scope statement (contains project
assumptions) and WBS (facilitates understanding of potential risks at summary, control
account, and work package levels)
11.2.1.7 Activity Cost Estimates : Provides quantitative assessment of the range of costs of
completing scheduled activities, with the width of the range indicating the degree of risk.
11.2.1.8 Activity Duration Estimates : Used to identify risks related to time allowances for
activities, with the range of the estimates indicating the degree of risk.
11.2.1.9 Stakeholder Register : Useful for soliciting inputs from stakeholders to identify risks.
11.2.1.10 Project Documents : Which includes project charter, project schedule, schedule
network diagrams, issue log and quality checklist
11.2.1.11 Procurement Documents : Details used to determine risks associated with planned
procurements.
11.2.1.12 EEFs : Information from industry and academia that give guidance in identification
of risks.
11.2.1.13 OPAs : Which includes project files, organizational process controls, templates for
risk statement and lessons learned
11.2.2 Tools & Techniques
11.2.2.1 Documentation Reviews : A structured review of previous project files, project plans
and project assumptions.
11.2.2.2 Information Gathering Techniques : Which includes
Brainstorming: Under the leadership of a facilitator, the project team or a multi-disciplinary
group of experts generates ideas about project risks. The information is
then refined and categorized.
Delphi technique: A way of reaching consensus among a group of experts who
participate anonymously. The experts give responses to specific questions. The
responses are then summarized and provided to the entire group. The anonymity
prevents any participant from dominating the results. Several iterations are usually
performed to determine whether a consensus exists among the experts. While this
technique can be used for numerous reasons, the purpose here is to identify major
project risks.
Interviewing: Conducted with experienced project managers, subject matter experts
and other stakeholders.
Root cause analysis: Sharpens the definition of a particular risk and facilitates
grouping of risks by cause or category
11.2.2.3 Checklist Analysis : Checklists for risk identification may be compiled from
previous projects and an analysis of the risk breakdown structure.
10. 11.2.2.4 Assumptions Analysis : Explores the validity of assumptions as they apply to the
project.
11.2.2.5 Diagramming Techniques : Which includes cause and effect analysis, system or
process flow charts, and influence diagrams
11.2.2.6 SWOT Analysis : Examines the project for each of the Strengths, Weaknesses,
Opportunities, and Threats by examining the dimensions of positive and negative risks, and
internal and external ones.
11.2.2.7 Expert Judgment : Experts with experience on similar projects or business areas.
11.2.3 Outputs
11.2.3.1 Risk Register : Which contains identified risks and of potential responses. The risk
register is built in stages as each risk management process is performed. A plan is provided,
risks are identified, risks are then analyzed, response plans are developed and on-going
monitoring and control follows next. New information is developed at each step
11. 11.3 Perform Qualitative Risk Analysis
Qualitative risk analysis is the process of assessing the likelihood and impact of identified
risks and prioritizing them according to their potential effect on project objectives. This
process id accomplished using established qualitative methods and tools. The purpose is to
help the project team focus on high priority risk and also to lay the foundation for quantitative
analysis should it be needed. Qualitative analysis takes relatively less time and is less
expensive to perform when compared to quantitative analysis
12. 11.3.1 Inputs
11.3.1.1 Risk Management Plan : The key elements of the Risk Management Plan used in this
process are
roles and responsibilities for conducting risk management
budget, schedule for risk management activities
definition of risk categories
definition of risk probability and impact
probability and impact matrix
stakeholder’s risk tolerances
11.3.1.2 Scope Baseline : An analysis of the scope baseline will indicate if the project has
higher risk, which will occur if the project involves state-of-the-art technology and high
complexity
11.3.1.3 Risk Register : This contains the risks and potential risk responses identified in
process Identify Risks.
11.3.1.4 EEFs : Which includes industry studies of similar projects by risk specialists and
risk databases from industry or proprietary sources
11.3.1.5 OPAs : Which includes historical information from similar projects
11.3.2 Tools & Techniques
11.3.2.1 Risk Probability And Impact Assessment: Which comprises of risk probability
assessment investigates likelihood of each risk and risk impact assessment investigates
potential effect on project constraints (schedule, cost, quality, scope)
13. 11.3.2.2 Probability and impact matrix : Based on the risk probability and impact assessment,
a matrix is created showing both the probability and the impact for each risk. A risk rating is
assigned of high, moderate, or low depending on the pre-determined preference of the
organization.
Sometimes, the low risks are put in a watch list for further monitoring during the course of
the project.
Risk Categorization :
14.
15. 11.3.2.3 Risk Data Quality Assessment : The degree to which data about risks on the project
has Accuracy, Quality, Reliability and Integrity
11.3.2.4 Risk Categorization : Risks to the project can be categorized according to their
source (using the Risk Breakdown Structure), the area of the project effected (using the
Work Breakdown Structure), or the phase of the project effected.
11.3.2.5 Risk Urgency Assessment : Based on whether the risk is likely to occur in the near-term.
Some risk rankings combine the risk probability, risk impact and the risk urgency.
11.3.2.6 Expert Judgment : Expert judgment is often used to determine the risk probability
and impact.
11.3.3 Outputs
11.3.3.1 Project Documents Updates : Risk register for each risk identified in process
Assessments of probability and impact
Risk urgency
Risk ranking
Risk categorization
Watch list for low probability risks
Assumptions Log–the project scope statement may contain assumptions about the project
which may be updated as a result of the qualitative risk analysis done in this process.
11.4 Perform Quantitative Risk Analysis
Quantitative analysis numerically analyzes the probability of each risk and its consequence
on project objectives. Sophisticated techniques such as Monte Carlo simulation and decision
tree analysis are used to do the following.
Determine the probability that specific project objective can be met.
Quantify risk exposure so that cost and schedule reserves can be determined.
Identify which risks require the most attention.
Identify realistic cost, schedule and performance targets.
There may be instances in which quantitative analysis is not needed or is not worth the cost.
16. 11.4.1 Inputs
11.4.1.1 Risk Register : provides a list of risks, risk priorities and risk categories (information
from all the previous processes).
11.4.1.2 Risk Management Plan: establishes roles and responsibilities, the budget and time to
do the analysis, risk categories and stakeholder risk tolerance.
11.4.1.3 Cost Management Plan: provides the format and structure for handling cost-related
information and issues.
11.4.1.4 Schedule Management Plan: provides the format and structure for handling
schedule-related information and issues.
11.4.1.5 EEFs
11.4.1.6 OPAs : Organizational Process Assets that can influence quantitative analysis
include information on previous, similar projects, studies of similar projects by risk
17. specialists , risk database available from professional associations, industry groups or other
proprietary sources
11.4.2 Tools & Techniques
11.4.2.1 Data Gathering And Representation Techniques: These techniques include:
Interviewing: Interviews with appropriate subject matter experts yield data requited to
build provability distributions. A common approach is shown in this site, in which
experts provide three estimates (low, most likely and high). This approach is very
much like the PERT technique discussed in the time management area.
Probability Distributions: The outcome of interviewing in a probability distribution.
11.4.2.2 Quantitative risk analysis and modelling techniques: Common techniques include:
Sensitivity Analysis: Also known as “what if” analysis, sensitivity analysis uses the
power of the computer to examine the effects of variations in different project
variables. For, example, if you vary the duration of a given task, what is the effect on
project costs, quality and resource usage. Tornado diagrams may be used to assess the
potential impact of highly uncertain variables on the rest of the project.
Expected Monetary Value Analysis: A statistical concept that calculates a long-term
average outcome. EMV is quite simply multiplying the probability of an event by the
monitory amount at stake. EMV analysis is often used in conjunction with decision
trees. A decision tree is a diagram that depicts the interactions of possible events. The
process yields the probabilities and/or expected monetary value of various possible
outcomes.
Modelling and Simulation: Using data from subject matter experts, computer software
program uses random number generators and input values from a probability
distribution to simulate possible project outcomes.
Most common form is Monte Carlo. It quantifies a variety of potential risks, including
schedule and cost. Produces a distribution of possible outcomes with associated
probabilities. By comparison, PEPT and CPM analysis understate project duration
because they cannot account for path convergence. The results of a Monte Carlo
simulation are significantly affected by the choice of statistical distribut ion.
18. 11.4.2.3 Expert Judgment: Subject matter experts are needed to provide data and validate the
results.
11.4.3 Outputs
11.4.3.1 Risk Register Updates: The register is now updated with the following new
information from quantitative analysis:
Probabilistic analysis of the project: A forecast of possible cost and schedule
outcomes along with associated confidence levels. In order words, a probability
distribution showing possible cost and schedule results.
Probability of achieving cost and time objectives: A quantitative analysis showing the
probability of achieving the current project objectives (given the current knowledge of
project risks).
Prioritized list of quantified risks: A list of risks that pose the greatest threat (or
opportunity) for the project.
Trends in quantitative risk analysis results: If there are any trends in project
performance, repetitive analysis will usually show them.
For a project in the Planning and Design phase:
Set project cost and schedule targets
Evaluate if cost estimates and schedules are realistic
Evaluate the adequacy of contingency reserves
Request a contingency exceeding the standard Caltrans allowance
Evaluate the probability (risk) of exceeding specific cost and time targets
Determine the sensitivity of the output probability distribution to input risks (Risk
Sensitivity Diagram), highlighting the main risk drivers.
For a project in the Construction phase:
Perform risk‐based budget analyses and forecasting cost at completion
Assess the adequacy of remaining contingency
19. Request supplemental funds
Evaluate the probability of meeting completion targets.
11.5 Plan Risk Response
Risk response planning is the process of determining how to enhance opportunities or reduce
threats. Response planning assigns one or more people as “response owners” and addresses
risks according to their priority. Response planning should consider the following factor:
The response is appropriate for the severity of the risk.
The response is cost effective and timely.
The response is agrees upon and realistic.
The response is owned by a specific person (assigned action item).
11.5.1 Inputs
11.5.1.1 Risk Management plan: As before, the risk plan assigns people who own specific
risks, defines the thresholds for whether a risk is low, moderate, or high, and provides the
time and budget to conduct response activities.
20. 11.5.1.2 Risk Register: Based on the analysis from the previous processes of identification
and analysis, the risk register provides the following information:
Identified risks and priority
Root causes and risks grouped by categories
List of potential responses
Risk owners and risk triggers (symptoms and warning signs)
Risks requiring near term response
Watch list of row risks that should be periodically monitored
11.5.2 Tools And Techniques
11.5.2.1Strategies For Negative Risks Or Threats: May be addressed with one or more of the
following:
Avoid: This strategy attempts to eliminate a threat, if possible. One possible approach
is to adopt an alternative strategy in one of the following ways: 1) reduce scope or
change project objectives, 2) allow the schedule to slip, 3) adopt a proven technical
approach instead of a more innovative, risky one, or 4) use a substitute component
that does not have the same risk. Risk can be avoided by removing the cause of the
risk or executing the project in a different way while still aiming to achieve project
objectives. Not all risks can be avoided or eliminated, and for others, this approach
may be too expensive or time‐consuming. However, this should be the first strategy
considered.
Transfer: You may consider transferring (deflecting) a risk to another party through
numerous practices. Transferring risk involves finding another party who is willing to
take responsibility for its management, and who will bear the liability of the risk
should it occur. The aim is to ensure that the risk is owned and managed by the party
best able to deal with it effectively. Risk transfer usually involves payment of a
premium, and the cost‐effectiveness of this must be considered when deciding
whether to adopt a transfer strategy. Example : Handing over sight security to an
agency who has good track record for handling site security in that area.
Mitigate: Actions taken to reduce the probability or the impact of a risk, earlier
preventive approaches are usually more productive than repairing the damage after it
occurs. Conducting more tests or designing back-up systems into critical subsystems
are examples of mitigation. Insurance and performance bonds, Warranties and
guarantees, Outsourcing (also called procurement or subcontracting), Contract type
(a fixed price contract transfers cost risk to the seller and a cost reimbursement
contract transfers cost risk to the buyer)
Note: Transferring a risk does not eliminate the risk. It merely gives someone else the
responsibility to manage that risk.
Accept: This approach may be used for negative risks or threats and for positive
opportunities. Passive acceptance is taking no action and dealing with the problems
(or opportunities) if and when they occur. Active acceptance is almost always handled
using extra money, time, or resources (known as contingency reserve).
11.5.2.2 Strategies For Positive Risks Or Opportunities:
Exploit: This strategy attempts to maximize the chance of reaching an opportunity. lt
uses approaches such as: assigning the most talented resources available, reducing the
time to completion, providing better quality than planned, and eliminating
21. uncertainty. The sponsor should exert influence where needed. This strategy seeks to
eliminate the uncertainty associated with a particular upside risk by making the
opportunity definitely happen. Exploit is an aggressive response strategy, best
reserved for those “golden opportunities” having high probability and impacts. Ex:
Launching Phase 2 of the project immediately if there is above expectation response
for phase 1 of the project
Share: This strategy involves joint ventures, strategic alliances, and other
collaborative arrangements to share risks, share costs, and take advantage of technical
synergies (each party performs the portion of the project that they do best). Allocate
risk ownership of an opportunity to another party who is best able to maximize its
probability of occurrence and increase the potential benefits if it does occur.
Transferring threats and sharing opportunities are similar in that a third party is used.
Those to whom threats are transferred take on the liability and those to whom
opportunities are allocated should be allowed to share in the potential benefits.
Example : Sharing profits with investment partner
Enhance: This strategy attempts to increase the "size of an opportunity" by 1)
increasing probability and positive impact (the opposite of mitigating negative risks)
and 2)by identifying and maximizing key drivers of positive opportunities. For
instance, one might decide to leverage the advantages of a superior technology.
Accept: Used when the organization prefers not to actively pursue an opportunity, but
will take advantage of it if it occurs. For example, the organization might not wish to
divert resources from a more promising opportunity.
11.5.2.3 Contingent Response Strategy: A response plan that is used only under
predetermined circumstances. This approach is appropriate when planners feel that future
warning symptoms will provide adequate time to implement the response activity if the
conditions begin to occur. For example, a particular risk response strategy may be triggered
only if a specific milestone is missed.
11.5.2.4 Expert Judgment: As always, people with the right experience, training, and
knowledge should be used for the task at hand (in this case, for response planning).
11.5.3 Outputs
11.5.3.1 Project Management Plan Updates: Elements of the plan that may be updated as a
result of response planning include:
Schedule management plan
Cost management plan
Quality management plan
Procurement management plan
Human resource management plan
Work breakdown structure
Schedule baseline
Cost performance baseline
Risk register update
11.5.3.2 Project Document Updates: Documents that are updated include risk register update
,assumptions log updates, technical documentation and change requests
22. 11.6 Control Risks
Risk monitoring is the process of keeping track of identified risks, ensuring that risk response
plans are implemented, evaluating the effectiveness of risk responses, monitoring residual
risks, and identifying new risks. The purpose of monitoring is to determine whether:
Risk responses have been implemented.
Risk responses were effective (or new responses are needed).
Project assumptions are still valid.
Any risk triggers have occurred.
Risk exposure has changed.
Policies and procedures are being followed-
Any new risks have emerged.
11.6.1 Inputs
11.6.1.1 Risk Register
11.6.1.2 Project Management Plan: Contains the risk management plan which assigns people,
risk owners, and the resources needed to carry out risk monitoring activities.
23. 11.6.1.3 Work Performance Data : Includes performance data related to various performance
results possibly impacted by risk which includes deliverable status, schedule progress and
cost incurred.
11.6.1. 4 Work Performance Reports: These reports analyze the work performance
information just mentioned to create status reports and forecasts using various methods such
as earned value.
11.6.2 Tools And Techniques
11.6.2.1 Risk Reassessment: The project team should regularly check for new risks and
reassess previously identified risks. At least three possible scenarios should be considered: a)
new risks may have emerged and a new response plan must be devised, b) if a previously
identified risk actually occurs, the effectiveness of the response plan should be evaluated for
lessons learned, and c) if a risk does not occur, it should be officially closed out in the risk
register.
11.6.2.2 Risk Audits: Evaluate and document the effectiveness of risk responses as well as
the effectiveness of the processes being used. Risk audits may be incorporated into the
agenda of regularly scheduled status meetings or may be scheduled as separate events.
11.6.2.3 Variance and Trend Analysis: Used to monitor overall project performance. These
analyses are used to forecast future project performance and to determine if deviations from
the plan are being caused by risks or opportunities.
11.6.2.4 Technical Performance Measurement: Using the results of testing, prototyping, and
other techniques to determine whether planned technical achievements are being met. As
with trend analysis, this information is also used to forecast the degree of technical success on
the project.
11.6.2.5 Reserve Analysis: Compares the remaining reserves to the remaining risk to
determine whether the remaining reserve is adequate to complete the project.
11.6.2.6 Meetings: Risk management should be a regular agenda item at the regular team
meetings.
11.6.3 Output
11.6.3.1 Work Performance Information : To communicate and support project decision
making
11.6.3.2 Change Requests: When contingency plans are implemented, it is sometimes
necessary to change the project management plan. A classic example is the addition of extra
money, time, or resources for contingency purposes. These change requests may lead to
recommended corrective actions or recommended preventive actions. Corrective actions may
include contingency plans (devised at the time a risk event is identified and used later if the
risk actually occurs) and workarounds (passive acceptance of a risk where no action is taken
until or unless the risk event actually occurs). The major distinction is that workaround
responses are not planned in advance.
11.6.3.3 Project Management Plan Updates: Again, if approved changes have an effect on
risk information or processes, the project management plan should be revised accordingly.
24. 11.6.3.4 Project Document Updates: Documents that may be updated include assumptions
log updates and technical documentation updates.
11.6.3.5 OPAs Updates: Includes risk plan templates, the risk register, the risk breakdown
structure, and lessons learned.