The document outlines a risk management process including risk identification, assessment, response planning, and control. It discusses internal risks like technical and market risks as well as external risks outside a project manager's control. Risks are identified and assessed based on probability and impact. Responses include transferring risk, avoiding risk through plan changes, reducing risk through contingency planning, and accepting some level of risk. The overall process helps manage risks to meet schedule, budget and technical objectives.

1. RISK ANALYSIS
AND
MANAGEMENT
Submitted By:
XYZ
Submitted To:
Mr. ABC

2. CONTENT
 Introduction
 Process of Risk Management
 Risk Identification
 Internal Risks
 External Risks
 Risk Assessment
 Risk Response Planning and Control

3. INTRODUCTION
 Risk is a function of the chance and the result of an
undesired event happening.
 Risk can also be said to be the failure of not
meeting the schedule/ budget/ technical
parameters.
 Risk cannot be eliminated, only reduced.

4. PROCESS OF RISK MANAGEMENT
 Risk Identification
 Risk Assessment
 Risk Response Planning
 Risk Response Control

6. RISK IDENTIFICATION
 SOURCES OF RISK
Any factor which can influence the end result of
project is a Risk factor or Risk hazard.
 Risk classified as- internal and external

7. INTERNAL RISKS
 Originates inside the project
 Project managers & the organization generally have
a degree of control over them.
 Market risk and Technical risk
 Market risk- Incomplete identification of customer
needs
- Failure to identify changing needs
- Failure to identify new products

8.  Technical Risk is not meeting the cost, time and
performance requirements due to technical
problems with the end items of project.
 Technical risk is high in new technologies, new
skills, new products
 Technical risk is low in projects dealing with familiar
activities

9. EXTERNAL RISKS
 Market Conditions
 Competitor’s action
 Government Regulations
 Interest Rates
 Customer Needs and Behavior
 Supplier relations
 Weather
 Labor and material availability

10. RISK ASSESSMENT
 Only the important ones need to be assessed.
 Risk chance is -- the probability of happening-
low/ medium/ high -- assign numerical values - 0 to 1.0
 Risk impact (result) -- specified in terms of time, cost and
performance measures-- assign numerical values.
 The expected value of risk is calculated as-
(result) x (chance) = probability of happening

11. RISK RESPONSE PLANNING AND CONTROL
 Methods of dealing with risk-
 Transferring risk
 Altering plans or procedures to avoid or reduce risk
 Prepare contingency plans
 Accepting the risk

12.  Transfer the Risk
Paying a premium to pass the risk to another party.
 Warranties, penalties, contractual incentives attached to
project cost, schedule or performance measures.
 Different types of contract share it in different ways
 Fixed cost contract- with contractor
 Fixed price with incentive fee- contractor accepts about
60%
 Cost + incentive- contractor accepts about 40%
 Cost + fixed fee- with the customer

13.  Avoid Risk
Changing the project plan to eliminate the risk or
condition.
 By altering the original project concept
 Eliminating the risky elements
 Minimizing system complexity
 Reducing end-item quality requirement
 Changing contractor
 Safety procedures
 Avoiding reduces payoff opportunities
 New product design

14.  Reduce Risk
Reducing the chance that an adverse event will occur
Reducing the impact of adverse event.
Reducing Technical Risk-
 Employ the best technical team
 Base decisions on models and simulation of key
technical parameters
 Use computer aided system engineering tools
 Perform test and evaluations
 Minimize system complexity

15. Reducing Schedule Risk-
 Create a master project schedule and adhere to it
 Maintain focus on critical activities
 Allot best workers on time-critical activities
 Schedule risky tasks as early as possible to allow time for
failure from recovery
Reducing Cost Target Risk-
 Identify and monitor the key cost drivers
 Use low-cost design alternative reviews and
assessments
 Use proven technology
 Perform prototyping and testing on risky components and
modules

16.  CONTIGENCY PLANNING
 Identify the risk, anticipate whatever might happen, and
prepare a detailed plan of action to cope with it.
 Initial project is followed, and monitored closely
throughout execution.
 A remedial measure to compensate for impact
 An action taken in parallel to original plan

17.  ACCEPT RISK
 Do nothing!
 Cannot be used as an option when the impact is likely to
severe.

18. THANK YOU