The document discusses project risk management over 7 days. Day 5 focuses on project risk management and includes discussions of identifying risks, qualitative and quantitative risk analysis, and planning risk responses. Key topics covered are the importance of risk management, types of risks, tools for risk identification like brainstorming, risk breakdown structures, and risk registers to document risks.

1. Dr Mohamed Elfarran
Project Management
Day (5)

2. Dr Mohamed Elfarran
Course Outline
Day 1: Introduction + Project Integration Management.
Day 2: Project Scope Management.
Day 3: Project Schedule Management.
Day 4: Project Cost Management.
Day 5: Project Risk Management.
Day 6: Scrum.
Day 7: Final Presentation Day!

3. Dr Mohamed Elfarran
Project Risk Management
Rev.221102
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4. Dr Mohamed Elfarran
The Importance of Project Risk Management
Project risk management is the art and science of identifying, analyzing, and
responding to risk throughout the life of a project and in the best interests of
meeting project objectives
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Information
Technology

5. Dr Mohamed Elfarran
Project Risk Management
Project Risk Management includes the process of conducting risk management plan,
identification, analysis, response planning, response implementation, and monitoring
risk on the project. The objectives of project risk management:
○ Increase the probability and/or impact of positive (opportunities) risks and
decrease the probability and/or impact of negative risks (threats), in order
to optimize the chance of Project success.
6
Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) –
Sixth Edition, Project Management Institute, Inc., 2017, Page 395.

6. Dr Mohamed Elfarran
Project Risk Management
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7. Dr Mohamed Elfarran
Integrating Risk with other project management functions
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Project Risk
Scope
Communication
Time Procurement
Quality
Recourses
Cost
Integration
Life cycle
Enviro. Variables
Cost
Objectives
Availability
Productivity
Requirements
Standards
Time
Objectives
Services
Performance
Expectation Data
Exchange
Accuracy

8. Dr Mohamed Elfarran
Risk
● An uncertain event or condition that, if it occurs, has a Positive or
Negative effect on a project objective.
○ The severity of any risk can be defined in terms of two quantities:
■ Likelihood: The extent to which the risk effects are likely to
occur.
■ Impact (Consequence): The effect that a risk will have on
the project if it occurs.
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9. Dr Mohamed Elfarran
Risk Types
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10. Dr Mohamed Elfarran
Risk Levels
Risk exists at two levels within every project.
Each project contains individual risks that can affect the achievement of
project objectives.
It is also important to consider the riskiness of the overall project, which arises
from the combination of individual project risks and other sources of
uncertainty.
○ Individual Project Risk
○ Overall Project Risk
11

11. Dr Mohamed Elfarran
Risk Levels
● Individual Project Risk
○ Is an uncertain event or condition that, if it occurs, has a Positive or
Negative effect on one or more a project objective.
● Overall Project Risk
○ Is the effect of uncertainty on the project as a whole, arising from all
sources of uncertainty including individual risks, representing the
exposure of stakeholders to the implications of variations in project
outcome, both positive and negative.
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12. Dr Mohamed Elfarran
Negative Risk
● A dictionary definition of risk is “the possibility of loss or
injury”
● Negative risk involves understanding potential problems
that might occur in the project and how they might impede
project success
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Information
Technology
Negative risk Positive risk

13. Dr Mohamed Elfarran
Risk Can Be Positive
● Positive risks are risks that result in good things
happening; sometimes called opportunities
● A general definition of project risk is an uncertainty that
can have a negative or positive effect on meeting project
objectives
● The goal of project risk management is to minimize
potential negative risks while maximizing potential
positive risks
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Technology

14. Dr Mohamed Elfarran
Trends and emerging practices
● Project resilience (Flexibility)
○ Right level of budget and schedule contingency
○ Flexible project process
○ Empowered project team that has clear objective
○ Frequent review of early warning sign
○ Clear input from stakeholders
○ Integrated risk management
○ Program and portfolio
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15. Dr Mohamed Elfarran
Plan Risk Management
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17. Dr Mohamed Elfarran
Plan Risk Management
Plan Risk Management
is the process of defining how to conduct risk management
activities for the project.
The key benefit of this process is that it ensures that the degree, type, and
visibility of risk management are proportionate to both risks and the
importance of the project to the organization and other stakeholders.
18
Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) –
Sixth Edition, Project Management Institute, Inc., 2017, Page 401.

18. Dr Mohamed Elfarran
Plan Risk Management, Outputs
● Risk Management Plan
Describes how risk management activities will be structured and
performed, and it may include the following elements:
■ Risk strategy
Describes the general approached to mange the risk
■ Methodology
Defines the specific approaches, tools, and data sources that will be
used to perform risk management on the project. 19

19. Dr Mohamed Elfarran
Plan Risk Management, Outputs
■ Roles & Responsibilities
Defines the lead, support, and risk management team member for
each type of activities described in the risk management plan, and
clarifies their responsibility.
■ Funding
Identifies the funds needed to perform activities related to the project
risk management. Establishes protocols for the application of
contingency and management reserves. 20

20. Dr Mohamed Elfarran
Plan Risk Management, Outputs
■ Timing
Defines when and how often the risk management process will be
performed throughout the project life cycle
■ Risk categories
Provides a means for grouping individual project risk. A common way to
structure risk categories is a risk breakdown structure (RBS)
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21. Dr Mohamed Elfarran
Plan Risk Management, Outputs
◼ Risk categories
Risks that may affect the project for better or worse can be identified and
organized into categories
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Macro
Financial
Political
Market
Environment Target
Managerial
Project
Job Site
Procurement
Design
Act of God
Social
Technical
Funding
Control
Team
Contractual

22. Dr Mohamed Elfarran
Identify Risk
Rev.221102
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23. Dr Mohamed Elfarran
Identify Risk
Identify Risk Is The Process of identifying individual project risks as well
as sources of overall project risk, and documenting their characteristics.
The key benefit of this process is the documentation of existing individual
project risks and the sources of overall project risk. It also bring
information so the project team can appropriately to identified risk.
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Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) –
Sixth Edition, Project Management Institute, Inc., 2017, Page 409.

24. Dr Mohamed Elfarran
Identify Risk
● Risk is doing business
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External
Environment
project
Organization
Environment Significant
Factors
Location
of the
site Client Wars

25. Dr Mohamed Elfarran
Identify Risk, Tools & Tech
● Brainstorming is a technique by which a group attempts to generate ideas or
find a solution for a specific problem by amassing ideas spontaneously and
without judgment
● An experienced facilitator should run the brainstorming session
● Be careful not to overuse or misuse brainstorming.
○ Psychology literature shows that individuals produce a greater number of ideas working alone
than they do through brainstorming in small, face-to-face groups
○ Group effects often inhibit idea generation
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Technology

26. Dr Mohamed Elfarran
Risk Breakdown Structure
● A risk breakdown structure is a hierarchy of potential risk categories for a
project
● Similar to a work breakdown structure but used to identify and categorize
risks
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Figure 11-4. Sample Risk Breakdown Structure
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Information Technology Project Management, Sixth Edition

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Figure 11-4. Sample Risk Breakdown Structure
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Information Technology Project Management, Sixth Edition

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Table 11-4. Potential Negative Risk Conditions Associated with Each Knowledge
Area
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Identify Risk, Tools & Tech.
SWOT Analysis
○ This technique examines the project from each of the strengths,
weaknesses, opportunities, and threats.
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31. Dr Mohamed Elfarran
Identify Risk, Tools & Tech.
● Delphi Technique
○ The Delphi Technique is used to derive a consensus among a panel of experts who make
predictions about future developments
○ Provides independent and anonymous input regarding future events
○ Uses repeated rounds of questioning and written responses and avoids the biasing effects
possible in oral methods, such as brainstorming
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32. Dr Mohamed Elfarran
Identify Risk, Tools & Tech.
● Prompt Risk
○ A prompt risk is a predetermined list of risk that might give rise
to individual risk and that could also act as sources of overall risk.
The risk categories in the lowest level of the risk breakdown
structure can be used as a prompt list for individual project risk.
● Meetings
○ Often call a risk workshop
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33. Dr Mohamed Elfarran
Identify Risk, Output
34
● The main output of the risk identification process is a list of identified
risks and other information needed to begin creating a risk register
● A risk register is:
○ A document that contains the results of various risk management processes
and that is often displayed in a table or spreadsheet format
○ A tool for documenting potential risk events and related information
● Risk events refer to specific, uncertain events that may occur to the
detriment or enhancement of the project

34. Dr Mohamed Elfarran
Risk Register Contents
● An identification number for each risk event
● A rank for each risk event
● The name of each risk event
● A description of each risk event
● The category under which each risk event falls
● The root cause of each risk
● Triggers for each risk; triggers are indicators or symptoms of actual risk events
● Potential responses to each risk
● The risk owner or person who will own or take responsibility for each risk
● The probability and impact of each risk occurring.
● The status of each risk
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35. Dr Mohamed Elfarran
Table 11-5. Sample Risk Register
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Information Technology Project Management, Seventh Edition
• No.: R44
• Rank: 1
• Risk: New customer
• Description: We have never done a project for this organization
before and don’t know too much about them. One of our company’s
strengths is building good customer relationships, which often leads
to further projects with that customer. We might have trouble working
with this customer because they are new to us.
• Category: People risk
• Etc.

36. Dr Mohamed Elfarran
Identify Risk, Output
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37. Dr Mohamed Elfarran
● Risk Breakdown
Structure
● Build Your Risk
Registers
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Dr Mohamed Elfarran

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Risk Analysis
Rev.221102
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39. Dr Mohamed Elfarran
Perform Qualitative Risk Analysis
Perform Qualitative Risk Analysis Is the process of prioritizing
individual project risk for further analysis or actions by assessing the
probability of occurrence and impact and as well as other characteristics.
The key benefit of this process is that it focuses efforts on high priority
risks.
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Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) –
Sixth Edition, Project Management Institute, Inc., 2017, Page 419.

40. Dr Mohamed Elfarran
Plotting Risk Events on the Matrix
Risk Probability
Risk Impact
L M H
L
H
M

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Output
● Top Ten Risk Item Tracking is a qualitative risk analysis tool that helps to
identify risks and maintain an awareness of risks throughout the life of a
project
● Establish a periodic review of the top ten project risk items
● List the current ranking, previous ranking, number of times the risk appears
on the list over a period of time, and a summary of progress made in
resolving the risk item
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42. Dr Mohamed Elfarran
Table 11-6. Example of Top Ten Risk Item Tracking
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43. Dr Mohamed Elfarran
Output
● A watch list is a list of risks that are low priority, but are still identified as
potential risks
● Qualitative analysis can also identify risks that should be evaluated on a
quantitative basis
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Technology

44. Dr Mohamed Elfarran
Perform Quantitative Risk Analysis
Perform Quantitative Risk Analysis is the process of numerically
analyzing the combined effect of identified individual project risks and
other sources of uncertainty on overall project objective. The key benefit
of this process is that it quantifies overall project risk exposure, and it can
also provide additional quantitative risk information to support risk
response planning.
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Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) –
Sixth Edition, Project Management Institute, Inc., 2017, Page 428.

45. Dr Mohamed Elfarran
Perform Quantitative Risk Analysis
This Process used technique such as Monte Carlo Simulation and Decision
Tree Analysis to:
○ Quantify the possible outcomes for the project and their probabilities.
○ Assess the probability of achieving specific project objectives.
○ Identify risks requiring the most attention by quantifying their relative
contribution to overall project risk.
○ Identify realistic and achievable cost, schedule or scope targets, given
the project risks.
○ Determine the best project management decision when some
conditions or outcomes are uncertain.
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46. Dr Mohamed Elfarran
Quantitative Risk Analysis
 Probability and Impact Matrix
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47. Dr Mohamed Elfarran
Quantitative Risk Analysis
 Probability and Impact Matrix
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48. Dr Mohamed Elfarran
Perform Quantitative Risk Analysis, Tools & Tech.
● Decision Tree Analysis
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49. Dr Mohamed Elfarran
Perform Quantitative Risk Analysis, Tools & Tech.
● Expected Monetary Value (EMV)
● Expected Payoff for good market = 80,000*0.15 + 50,000*0.45 = LE 34,500
● Expected Payoff for good quality = 80,000*0.15 + 20,000*0.25 = LE 17,000
● EMV = 80,000*0.15 + 50,000*0.45 +20,000*0.25 + (-20,000)*0.15 = LE 36,500
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Probability %
Payoff
Status
15
80,000
Good Market – Good Quality
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50,000
Good Market – Poor Quality
25
20,000
Poor Market – Good Quality
15
-20,000
Poor Market – Poor Quality

50. Dr Mohamed Elfarran
Perform Quantitative Risk Analysis, Tools & Tech.
● Simulation uses a representation or model of a system to analyze the
expected behavior or performance of the system
● Monte Carlo analysis simulates a model’s outcome many times to provide a
statistical distribution of the calculated results
● To use a Monte Carlo simulation, you must have three estimates (most likely,
pessimistic, and optimistic) plus an estimate of the likelihood of the estimate
being between the most likely and optimistic values
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Technology

51. Dr Mohamed Elfarran
Perform Quantitative Risk Analysis
Monte Carlo Simulation
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52. Dr Mohamed Elfarran
Perform Quantitative Risk Analysis, Tools & Tech.
● Sensitivity analysis is a technique used to show the effects of changing one
or more variables on an outcome
● For example, many people use it to determine what the monthly payments for
a loan will be given different interest rates or periods of the loan, or for
determining break-even points based on different assumptions
● Spreadsheet software, such as Excel, is a common tool for performing
sensitivity analysis
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Information
Technology

53. Dr Mohamed Elfarran
Perform Quantitative Risk Analysis, Tools & Tech.
● Sensitivity Analysis
■ Helps to determine which individual project risks or other
sources of uncertainty have the most potential impact on the
project outcomes
■ Involve making all risk variables at their baseline and study
impact on the project objectives when on variable is changed
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54. Dr Mohamed Elfarran
Perform Quantitative Risk Analysis, Tools & Tech.
● Sensitivity Analysis
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55. Dr Mohamed Elfarran
● Qualitative Risk
Analysis
● Quantitative Risk
Analysis
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Dr Mohamed Elfarran

56. Dr Mohamed Elfarran
Plan Risk Responses
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Rev.221102

57. Dr Mohamed Elfarran
Plan Risk Responses
The process of developing options selecting strategies, and agreeing on
actions to address overall project risk exposure, as well as to treat
individual project risk. The key benefit of this process is that it identifies
appropriate way to address overall project risk and individual project risk.
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Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) –
Sixth Edition, Project Management Institute, Inc., 2017, Page 437.

58. Dr Mohamed Elfarran
Plan Risk Responses
● Risk response should be:
○ Appropriate to the significance of the risk
○ Cost effective in meeting the challenge
○ Realistic within the project context
○ Agreed upon by all parties involved
○ Owned by a responsible person
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59. Dr Mohamed Elfarran
Plan Risk Responses
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60. Dr Mohamed Elfarran
Plan Risk Responses, Tools & Tech.
● Strategies for Threats
○ Avoid
○ Transfer
○ Mitigate
○ Accept
○ Escalate
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● Strategies for Opportunities
○ Exploit
○ Enhance
○ Share
○ Accept
○ Escalate

61. Dr Mohamed Elfarran
Plan Risk Responses, Tools & Tech.
● Strategies for Overall Project Risk
○ Avoid
○ Exploit
○ Transfer/Share
○ Mitigate/Enhance
○ Accept
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62. Dr Mohamed Elfarran
Risk Response Strategies
Mitigation
(Corrective action)
Avoidance
(Prevention)
Acceptance
(Accept consequences)
Transference
(Shift Responsibility)

63. Dr Mohamed Elfarran
Plan Risk Responses
● Residual Risk
The risks that remain after risk responses have been implemented.
● Secondary Risk
The risks that arise as a direct result of implementing a risk response.
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64. Dr Mohamed Elfarran
Implement Risk Responses
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65. Dr Mohamed Elfarran
Implement Risk Responses
Implement Risk Responses is the process of implementing agreed upon
risk response plans. The key benefit of this process is that it ensures that
the agreed upon risk responses are executed as planned in order to
address overall project risk exposure, minimize individual project threats,
and maximize individual project opportunities.
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Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) –
Sixth Edition, Project Management Institute, Inc., 2017, Page 449.

66. Dr Mohamed Elfarran
Monitor Risk
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67. Dr Mohamed Elfarran
Monitor Risk
Monitor risk is the process of monitoring the implementation of agreed upon
response plan, tracking identified risks, identifying and analyzing new risks,
and evaluating risk process effectiveness throughout the project.
The key benefit of this process is that it enable project decisions to be based
on current information about overall project risk exposure and individual
project risk.
68
*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management
Body of Knowledge, (PMBOK® Guide) – Sixth Edition, Project Management Institute, Inc., 2017.

68. Dr Mohamed Elfarran
Monitor Risk
The Monitor Risk processes uses performance information generated
during project execution to determine if:
○ Implemented risk responses are effective
○ Level of overall project risk has changed
○ Status of identified individual project risk has changes
○ New individual project risk have arisen
○ Risk management approach is still appropriate
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69. Dr Mohamed Elfarran
Monitor Risk
○ Project assumptions are still valid
○ Risk management policies and procedures are being followed
○ Contingency reserves for cost or schedule require modified
○ Project strategy is still valid
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70. Dr Mohamed Elfarran
Risk Assessment
71
ID Event % EGP Plan % EGP Risk Value
1
2
3
4
5
‫التصاريح‬ ‫تأخر‬
‫أسبوعين‬
‫أسبوع‬ ‫التصميم‬ ‫تأخر‬
‫العمالت‬ ‫سعر‬ ‫تغير‬
‫بنسبة‬
10
%
‫ئن‬ْ‫ا‬‫الزب‬ ‫عدد‬ ‫قلة‬
‫بنسبة‬
50
%
‫في‬ ‫التيار‬ ‫انقطاع‬
‫االفتتاح‬
40
50
60
30
50
‫المتوقع‬ ‫الربح‬
70
‫األسبوع‬ ‫في‬ ‫مصرى‬ ‫جنية‬ ‫ألف‬
‫المستوردة‬ ‫التوريدات‬
10
‫دوالر‬ ‫ألف‬
10
20
60
10
140,000
70,000
1,000$
35,000
210,000
40,000
20,000
$ 1,000
15,000
4,000
4,000
600$
1,500
‫محامى‬ ‫مع‬ ‫التعاقد‬
‫التكلفة‬
5
‫جنية‬ ‫الف‬
(
‫تخفيف‬
)
‫استشاري‬ ‫مكتب‬ ‫مع‬ ‫التعاقد‬
‫التكلفة‬
10
‫جنية‬ ‫الف‬
(
‫تخفيف‬
)
‫قبول‬
‫بتكلفة‬ ‫بالدعاية‬ ‫االهتمام‬
2,000
‫جنية‬
‫بتكلفة‬ ‫كهرباء‬ ‫مولد‬ ‫تأجير‬
5,000
‫جنية‬
(
‫تفادي‬
)

71. Dr Mohamed Elfarran

72. Dr Mohamed Elfarran 73