PMP, PMBOK (R) 5th Edition,
CH: 11: Project Risk Management
--> Represents one of two biggest chapters, of the PMBOK
==> Too much useful, for the people who have concern in the project management field, & the risk management field as well
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
PMP, PMBOK (R) 5th Edition,
CH: 11: Project Risk Management
--> Represents one of two biggest chapters, of the PMBOK
==> Too much useful, for the people who have concern in the project management field, & the risk management field as well
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
A risk is defined as “an uncertain event or condition that, if it occurs, has a positive and negative effect on a project’s objectives.” Risk is inherent with any project, and project managers should assess risk continually and develop plan to address them. The risk management plan contains an analysis of likely risks with both high and low impact, as well as mitigation strategies to help the project avoid being derailed should common problems arise. Risk management plans should be periodically reviewed by the project team in order to avoid having the analysis become stale and not reflective of actual potential project risks. Most critical, risk management plans include a risk strategy.
This module on Managing Risk discusses different type of risk that needs to be taken into account by the management while implementing a project. The other topics converged in this module include probability-impact matrix, Risk Quantification; Mitigating/Transferring risk; Risk audits/Review; Sample Risk plan and how to initiate Risk Management Planning.
The concepts and processes on how to perform project risk management according to PMBOK Guide 6th edition. You'll find key concepts and terms, plan risk management, identify risks, perform qualitative & quantitative risks analysis, plan risk responses, implement risk responses, and monitor risks.
The risk is one of the main variables that can declare the success or the failure of one project.
In this presentation, the "Project Risk" topic is treated from the point of view of methodology and theory; a real case study ("PMP certification course") has been chosen to demonstrate the applicability of the methodology in which risk management has proven to be the key factor for the success of the project.
In this presentation we look at approach of analyzing risks, we get into details of qualitative risk analysis and quantitative risk analysis. This presentation will help professionals who are preparing for PMP certification exam
Contents are sourced from different authors including PMBOK 5th Edition.
This is provided for free as part of our Continuing Practice in Project Management Professional Certification. You may download, share but please refrain from commercializing it or altering parts. Thanks.
For more on Innovations and Project Management, please visit www.facebook.com/SigmaProcessExcellence
Excited to share my presentation on Lesson 03 - "Doing the Work" for PMI Authorized PMP Exam Preparation! 📊🌐
In this session, I'll delve into the core aspects of effective project management, aligning your skills with PMI's renowned PMP certification. We'll explore the art of translating theory into practical action, delivering tangible results in complex projects. Join me in unraveling the secrets to success in the PMP exam journey! 💡🚀
#PMPExam #ProjectManagement #PMP #PMI #Certification #ProfessionalGrowth
A risk is defined as “an uncertain event or condition that, if it occurs, has a positive and negative effect on a project’s objectives.” Risk is inherent with any project, and project managers should assess risk continually and develop plan to address them. The risk management plan contains an analysis of likely risks with both high and low impact, as well as mitigation strategies to help the project avoid being derailed should common problems arise. Risk management plans should be periodically reviewed by the project team in order to avoid having the analysis become stale and not reflective of actual potential project risks. Most critical, risk management plans include a risk strategy.
This module on Managing Risk discusses different type of risk that needs to be taken into account by the management while implementing a project. The other topics converged in this module include probability-impact matrix, Risk Quantification; Mitigating/Transferring risk; Risk audits/Review; Sample Risk plan and how to initiate Risk Management Planning.
The concepts and processes on how to perform project risk management according to PMBOK Guide 6th edition. You'll find key concepts and terms, plan risk management, identify risks, perform qualitative & quantitative risks analysis, plan risk responses, implement risk responses, and monitor risks.
The risk is one of the main variables that can declare the success or the failure of one project.
In this presentation, the "Project Risk" topic is treated from the point of view of methodology and theory; a real case study ("PMP certification course") has been chosen to demonstrate the applicability of the methodology in which risk management has proven to be the key factor for the success of the project.
In this presentation we look at approach of analyzing risks, we get into details of qualitative risk analysis and quantitative risk analysis. This presentation will help professionals who are preparing for PMP certification exam
Contents are sourced from different authors including PMBOK 5th Edition.
This is provided for free as part of our Continuing Practice in Project Management Professional Certification. You may download, share but please refrain from commercializing it or altering parts. Thanks.
For more on Innovations and Project Management, please visit www.facebook.com/SigmaProcessExcellence
Excited to share my presentation on Lesson 03 - "Doing the Work" for PMI Authorized PMP Exam Preparation! 📊🌐
In this session, I'll delve into the core aspects of effective project management, aligning your skills with PMI's renowned PMP certification. We'll explore the art of translating theory into practical action, delivering tangible results in complex projects. Join me in unraveling the secrets to success in the PMP exam journey! 💡🚀
#PMPExam #ProjectManagement #PMP #PMI #Certification #ProfessionalGrowth
Auditing of business applications is very important especially in online banking because we are working with monetary transactions. Privredna banka Zagreb had an requirement
to implement a flexible system to audit user activity in our online banking for SME clients especialy since are authorization model was rather complex, for that we decided to use api with Java filters and intereceptors on are web application and for storage system we choosed MongoDB NoSQL database. In this presentation we are going to show you how we did it.
Elasticsearch as a search alternative to a relational databaseKristijan Duvnjak
The volume of data that we are working with is growing every day, the size of data is pushing us to find new intelligent solutions for problem’s put in front of us. Elasticsearch server has proved it self as an excellent full text search solution for big volume’s of data.
Understanding the risks in enterprise project managementOrangescrum
Risks are a given for any initiative or enterprise across industries. No wonder, PMI has dedicated a detailed process around risk management as part of their PMP certification. Risk Management requires experience, thorough knowledge of your business, the projects you are dealing with and a lot of foresight. Read the full article: https://www.orangescrum.org/articles/
Risk Management is essential for the success of any significant project. Information about key project cost, performance, and schedule attributes is often unknown until the project is underway.
Risk management is essential for the success of any significant project. Information about key project cost, performance, and schedule attributes are often unknown until the project is underway.
5 Project Risk Management
adrian825/iStock/Thinkstock
Learning Objectives
By the end of this chapter, you will be able to:
• Define and describe project risk.
• Understand the risk management process.
• Discuss the risk identification process.
• Explain the risk analysis process.
• Describe the risk response process.
• Explain the role of risk monitoring and control.
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Introduction
Pretest
1. Brainstorming is a good initial approach for identifying risks to a project.
a. True
b. False
2. The risk management process is a three-step process.
a. True
b. False
3. When risks are identified later in the project process, the cost to address these issues
will increase.
a. True
b. False
4. A risk that has a high probability of occurring might have little impact on a project.
a. True
b. False
5. A project manager who has not created a documented risk response plan has not
considered risks fully enough.
a. True
b. False
6. An output of risk monitoring and control includes updating the risk database.
a. True
b. False
Answers can be found at the end of the chapter.
Introduction
Have you ever visited a public park facility and seen an observation tower with a sign reading
“Climb at your own risk?” That is a good example of risk, the chance that something could go
wrong. The park is not only warning you about the risks of climbing the tower, but also saying
that it is not liable should something happen during the climb. In other words, the park is not
willing to share in the risk—it is all yours. In project management there are similar risks that
something will go wrong. The best way to handle anticipated risks is to document and analyze
them beforehand and decide what to do about them should they occur.
Good managers look for risks throughout the project cycle, know what the risks are before they
occur, and work to communicate, prevent, and offset them in their daily decisions and routines.
For instance, if the project manager is aware that a supplier of a key product component might
not keep an adequate inventory of that component on hand and could potentially delay the
project when it is due, the manager may adjust the relevant supply contract to include a penalty
clause for late delivery or make other changes in the way the supplier’s inventory is handled.
The principle is that project managers should be able to identify what might happen, what
the probabilities are that a risk event might occur, what the impacts will be, and how to
prevent or mitigate risks. This principle assumes that failure can be attributed to key events
or circumstances.
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Section 5.1 The Risk Problem
Risk management is the process of recognizing risks and dealing with them in a project. This
means that risks are identified, ana.
Embedding risk management as an integral part of the project framework is an essential and fundamental part of any project, programme or portfolio as a way of keeping costs down, benefits high, and increasing the probability of successful delivery.
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Most organizations have multiple project going on concurrently. They need a framework that allows them to evaluate (and mitigate) project risk in a way that reflects the potential business impact of this portfolio of projects.
1. PMI Delaware Valley Chapter Dinner Meeting Sept. 17, 2009 Chetan Gautam, MBA, PMP President, globe 1, inc. Project management, strategic management & risk management consulting cgautam@globe1management.com P: 215-262-0557 | f: 1-888—749-8519 Project Risk Management in Current Business Environment
2. IT PMs Intentionally Opt-out of Risk Management Globe 1, Inc. 2 “IT projects seem to be more problematic than other types of projects, with a particularly high rate of failure. Despite well-established best practice project management processes, project managers appear to be ineffective in the light of such failure. Risk is any project-related event, or managerial behavior, that is not definitely known in advance but has the potential of adverse consequences on a project objective (PMI, 2004). Project risk management claims to enable project managers to effectively manage risk and minimize the adverse influence of risk on the project outcome. However, we have found that IT project managers often do not apply a process to manage risks. The reasons for this vary. Nevertheless, the evidence behind this phenomenon is very scarce, often descriptive, and inchoate.” (Kutch & Hall , 2009 , “Rational Choice of Not Applying Project Risk Management in Information Technology Projects”, Project Management Journal, Volume 40, Issue 3)
3. Reasons for Opting Out Globe 1, Inc. 3 Lack of time Problem of Hindsight Seen as No value-add/or little value add Lack of skill-set Ownership Problem of Cost -justification Lack of tools Too Complex Risk Culture is Missing Politics Missing Framework “Machismo – Wild-Wild West”
4. Challenges in Current Business Environment Rating agencies & regulators expect well defined risk management processes implemented across enterprise Businesses must: Cut costs to maintain their competitive edge Re-strategize to exploit both short-term & long-term goals Prepare for further changes in regulatory environment (finance, insurance, healthcare and Pharma industries) 4 Globe 1, Inc.
7. Integrated IT systems cannot be built overnight to support changes in strategic direction
8.
9. Expectations from PMOs/PMs Partner with business in improved risk management at implementation level Quickly develop a roadmap that would translate strategy into feasible projects, with a focus on Risk Communicate in a timely manner, the threats, opportunities and issues that impact the achievement of strategic goals Time is of essence, no tolerance for delays, just get it done! Help build a “Risk Culture” in the long-term 7 Globe 1, Inc.
10. Project Management Challenges as Usual Stakeholders expect it all: Timeliness Best quality Uncompromised Scope Low Costs Lack of well established PM methodology, processes, tools, to meet business needs Lack of understanding of PM best practices, methodology, and processes across the organization 8 Globe 1, Inc.
11. A Project Manager’s Promise Globe 1, Inc. 9 “Results Orientation” “Measurability” “Self-Motivation” “Get things Done!” “Dependable”
12. What PMs / PMOs could be doing wrong? Not adapting or making necessary changes to meet the new expectations Not defining a formal risk management process that is supported by tools & techniques On the contrary, making the process too complicated, rigid or time-consuming Making risk-register a project-level deliverable not tied to enterprise risk management database Not aligning project & strategic risks Keeping risk management optional 10 Globe 1, Inc.
13. The Ideal Risk Management for PMOs Step 1 - Define Project Risk Management Methodology Step 2 - Identify methodology maturity levels Step 3 - Start with “must-have” deliverables (level 1) Step 4 - Perform Pilot Implementation Step 5 - Improve & implement in all projects Step 6 - Repeat steps 4, 5 and 6 for next levels 11 Globe 1, Inc.
14. Challenges for PMs Methodologies cannot be built and institutionalized in a day! Contractor PMs depend on Client’s methodology, which may or may not exist Scaling and integrating Project-level risk management to Enterprise-Level risk management Finding time to do Risk Analysis Stakeholders’ and PM’s perception of risks may differ 12 Globe 1, Inc.
15. Build a Risk Universe Reusable inventory of common risk categories & events 13 Globe 1, Inc.
16. Benefits of Creating a Risk Universe Globe 1, Inc. 14 Facilitates reusability, hence reduces time It is independent of project size Can be scaled and customized for industries & project types if required Can be used in strategic alignment of risks Is portable and can be carried from client to client Brings perspective to project environment Facilitates risk identification Basis for building risk identification questionnaires
17. Building Practical Project Risk Profiles Globe 1, Inc. 15 Inventory of risk events & situations aligned with schedule
18. Benefits of Schedule-Aligned Risk Profiles Report and focus attention on risks that are closer Monitor , manage and report risks as part of your project progress reporting and status reporting Manages perception of risky projects as risks expire with time Allows project comparison by their diminishing riskiness Allows you to identify risks and response planning as using progressive elaboration technique 16 Globe 1, Inc.
19. Other Effective Risk Management Techniques Identify Strategic Goals, Sponsor Expectations and Project Dependencies, and keep them in sight at all times Interview stakeholders early in the project life-cycle about potential risks Create a “what if” questionnaire, and keep updating it for different projects Identify critical-path tasks 17 Globe 1, Inc.
20. Essential Techniques Tracking “likelihood” and “impact” of a risk is good, but what good is it without knowing the “urgency”? Don’t forget the residual risk! Communicate more often Be consistent and set the right tone at the beginning Hindsight is 20-20, document the lessons learned 18 Globe 1, Inc.
21. Primary Level Risks Globe 1, Inc. 19 Absence of: Project Management and Risk Management Methodology Trust in the system Leadership support Strategic alignment and vision Understanding & Documentation of Roles & Responsibilities Wrong team fits (who is the weakest Link?)
22. Summary –Project Risk Management Globe 1, Inc. 20 Do not escape from Risk Management – Projects and your success depends on it! View Risk Management as a proactive method that forces involved parties to guarantee project success Bring sponsor’s focus on project priorities & impacts Justify delays or variance during executive reporting Ensure achievement of corporate strategic goals and objectives Help clients maintain their competitive advantage
Cost cutting:Staff-reduction, Let us go lean - limited resource availabilityShrink ongoing project scopeHold back on technology investments such buying new tools, upgrading software, etc.OutsourceLack of controlsRisk of project methodology misalignmentCultural risksTime and Cost associated with on-boarding and learning curve may negate the valueLimited Resource Availability:Lets go lean Hiring freezeFire consultantsGet rid of middle managementShort-long term strategy changes:Outsource IT support operations, Development and QALaunch new productsChange existing productsEnter new marketsWork as usual must go onOngoing programs that have shown promising results must continueEstablished business operations and their support operations must continue
The challengeslisted here can also be identified as broader inherent risks for many businesses today. These challenges have lead business leaders to expect a certain level of service, leadership and speed of execution at project level, which must be delivered by a well established PMO or team of project managers.
Help in managing business-risks at implementation levelPMs, especially consulting are sometimes so lost in managing issues and risks at project level that they lose sight of the strategic goalsPMs must keep the business-strategy, goals and objectives in mind at all timesIts not about project risks that business leaders are worried about, they are worried about business risks Example: If we do not launch the product by end of this year are we going to loose market share?Example: If we do not implement the new IVR system will we be able to handle customer calls in the new market?Align PMs with functional areasKnowledge is retained with the PMsPMs are also able to develop strong working relationships with their stakeholders and recognize the work styles cutting down the expensive forming and norming stages when a new critical project is launched.It allows PMs to share their knowledge of implementation risks and opportunities from previous projects during strategic decision makingPMs, however, become limited in their knowledge of overall enterprise-wide risk functional areasCommunicate earlyProactively get involved in strategic-planning and share risk knowledge gathered from previous projects, for instance feedback about problems faced while dealing with a specific vendor and its staff may prevent business from relying on depending on that vendor to deliver on time for a mission critical project. Also if a vendor is serving at full capacity to other projects and clients, a Project Manager would know this, from his/her dealings with the vendor managers while working on other assigned project schedules.
A unique kind of demand has therefore been created for PMOs. Business is asking PMOs to do what they do best, only this time, with requirements there is no free-float. Things must be done at speed of light and expectations are very specific. For many managers this presents a do-or-die situation.
- Execution Results - Decision Making - Uncertainty Management
Difference in Perception of risksYou view risks as impacts on project schedule, cost and scopeYour stakeholders may be however focused on the impacts to their own functional areas/processes
- Your project may not be critical for the company, but it adds value to a critical project’s deliverables or company’s back-bone processes- Once inherent risk’s mitigation plan is in place, always come back and analyze residual risk
- Builds confidence and stakeholders may identify risks during these sessions
There are risks, which if you manage effectively, many other secondary/dependent risks automatically vanish!