The document discusses risk management for projects. It begins by defining what a risk is and listing the benefits of risk management. It then outlines the key processes in risk management: plan risk management, identify risks, perform qualitative and quantitative risk analysis, plan risk responses, and monitor and control risks. Examples are provided for each step, including how to create a risk registry to track identified risks. The document emphasizes that risk management should be integrated throughout the project and communicate risks to stakeholders. It concludes with rules for effective risk management.

1. Risk Management
By Andriy Mudry
VP Delivery / CTO @ Team Technologies

2. “The major difference between a thing
that might go wrong and a thing that
cannot possibly go wrong is that when a
thing that cannot possibly go wrong goes
wrong it usually turns out to be impossible
to get at or repair…”
Douglas Adams

3. Initiating
Processes
Planning
Processes
Executing
Processes
Monitoring &
Controlling
Processes
Closing
Processes
Project Integration Management
Project Scope Management
Project Time Management
Project Cost Management
Project Quality Management
Project Human Resource Management
Project Communication Management
Project Risk Management

4. What is a risk ?
Uncertain
Event or
Condition
Always in
the Future
Impact on
project
Objectives
Ha s Causes,
Impact and
Probability
Negative or
Positive
Outcome

5. What are the Benefits of the Risk Mgmt. ?

6. Risk Mgmt. Process
Plan Risk Management *
Identify Risks
Perform Qualitative Risk Analysis
Perform Quantitative Risk Analysis *
Plan Risk Responses
Monitor & Control Risks

7. Plan Risk Mgmt.

8. Risk Breakdown Structure

9. Risk Sources
• Platforms, environment of development and implementation,
tools, security, performance
1.Technologies
• Government regulations, natural factors, competitors, industrial
standards
External Environment
• Terms, Budget, Scope, Business area, Infrastructure, Working
processes
Internal conditions (Project, Process):
• Client, Management, Team, Staffing, Professionalism and
qualification
People | Communication

10. Categorize Cause & Impact
Impact
Source Time Budget Quality Scope …
Technologies
External Environment
Internal conditions, Project,
Process
+ + +
People, Communication
+ +
…

11. Probability & Impact Matrix
Scale: 1… 3 | 1… 5 | 1… 10 | …

12. Probability & Impact Matrix
Scale: 1… 3 | 1… 5 | 1… 10 | …

13. Impact Definition Matrix
Correlates with:
• Probability & Impact Matrix
• Categorization of Sources and Influence

14. Impact Definition Matrix
Project
Objective
Very Low
5%
Low
10%
Moderate
20%
High
40%
Very High
80%
Cost Insignificant
cost increase
<5% cost
increase
5-10% cost
increase
10-20% cost
increase
>20% cost
increase
Schedule
Insignificant
schedule
slippage
Schedule
slippage <5%
Overall
project
slippage 5-10%
Overall
project
slippage 10-
20%
Overall
project
schedule slips
>20%
Scope
Scope change
barely
noticeable
Minor areas of
scope are
affected
Major areas of
scope are
affected
Scope
reduction
unacceptable
to the client
Project output
is effectively
useless
Quality
Quality
degradation
barely
noticeable
Only very
demanding
applications
are affected
Quality
reduction
requires client
approval
Quality
reduction
unacceptable
to the client
Project output
is effectively
unusable

15. Give it a Try…
There is a web application – business analytics. Known technologies, DB, 23 main modules, DB architecture is
very complex, DB performance is very critical with the strict acceptance criteria. Requirement are 50% defined,
very low chances forrequirementsto be changed,but they should be very clearbeforethe realization.
Now is August, release is on April 1. Client wants to have full transparency on progress. There couldn’t be delay
withthe deliveryof the wholescope,it is moreimportant thanbudget.
Test environment is on client’sside, very big loadon the network connection(morethanthe channel is now).
Client is very qualified in business area, will be doing UAT. Main expert on the client’s side is Jar Jar Binks.
Project team should be 15 people, 5 are missing, they will be not used after project completion. DB architect
works on another project 60-70%. Client’s expert Jar Jar Binks hardly uses email and has strong non-English
accent.

16. Give it a Try…
Challenge:
1. Categorization of Sources and Influence (Matrix)
2. Matrix of Probability and Impact
3. NB! Matrix of Influence Definition
4. Roles and responsibilities. Plan of activities in risks management.
5. Tolerance and watchlist, reserves.
6. Present

17. Identify Risks

18. Risk Registry
ID Risk Impact Probability Impact Risk Value Notes
1
Application
response will be
worse than
expected according
to the acceptance
criteria
Architecture redesign –
3 weeks
2
Specifications aren’t
confirmed by client
Corresponding time
delay, budget increase
3 … …

19. Risk Registry
• ID
• Description
• Impact
• Likelihood
• Impact
• Score
• Status
• Type (risk | opportunity)
• Responsible person
• Response strategy
• Comments (history)
• I use it to track all the action and
comments to see the track record
of what was going on with this risk

20. Keep up giving it a try …
• Identify 10 Risks
• Create Risk
Register.

21. Qualitative Risk Analysis
Likelihood |
Impact | Score
Current Risks
& Watchlist
Additional
properties

22. Qualitative Risk Analysis
ID Risk Impact
Probabilit
y Impact Risk Value Notes
1
Application response will
be worse than expected
according to the
acceptance criteria
Architecture
redesign – 3 weeks
3 5 15
2
Specifications aren’t
confirmed by client
Corresponding
time delay, budget
increase
2 1 2
3 … …
Current Risks
Watchlist

23. Quantitive Risk Analysis

24. Plan Risk Responses
Negative
• Avoid
• Transfer
• Mitigate
Positive
• Exploit
• Share
• Enhance

25. Plan Risk Responses

26. Plan Risk Responses: Likelihood & Impact Matrix

27. Monitor & Control Risks
Planning
Identification
Analysis
Response Monitor &
Control Risks
Project Plan
Change Requests
Risk Registry
Project Documentation

28. Risk Management Rules
Make Risk Management Part of Your Project
Identify Risks Early in Your Project
Communicate About Risks
Consider Both Threats and Opportunities
Clarify Ownership Issues
Prioritize Risks
Analyze Risks
Plan and Implement Risk Responses
Register Project Risks
Track Risks and Associated Tasks

29. Questions ?
“Questions are never indiscreet,
Answers sometimes are.”
Oscar Wilde