Risk Management Process And Procedures PowerPoint Presentation Slides

Risk Management Process and Procedures
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2
Introduction
› Risk Management- Introduced
› Types of Risk
› Risk Categories
› Identify Risk Categories
Procedure for managing the Risk
› Risk Planning
› Risk Identification
› Risk Assessment
› Risk Monitoring
› Risk Tracking
Tools & Practices
› Risk Impact Analysis
› Impact &Probability Analysis
› Risk Mitigation Strategies
› Qualitative Analysis
› Quantitative Analysis
Stakeholders Engagement
› Risk Appetite › Risk Tolerance
Risk Management Lifecycle
› Your text here › Your text here
Content

Risk Management Lifecycle
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attention.
Plan Risk Response
attention.
Identify Risks
Development Risks
Management Plan
attention.
Analyze Risks
attention.
Monitor & Control
Risks Management
Close-out
Risk
Management
Lifecycle
3

Introduction
Risk Management- Introduction
Types Of Risk
Risk Categories
Identify Risk Categories
4

Risk Management- Introduction
Resources
Identification Of
Risks
Assessment Of
Risks
Prioritization Of
Risks
Minimize Monitor Control
Maximize
Realization Of
Opportunities
Probability And/Or Impact
Of Unfortunate Events
5

Types Of Risks (1/2)
Internal Risks Strategic Operational Enablers
Demand Governance Access To Services People
Regulatory Strategic Planning Processes Financial
Economical Ethics & Values Business Interruption Technology
Socio- Political Stakeholder Relations Emergency Response Infrastructure
External Risks
6

Types Of Risks (2/2)
» Cost Overrun
» Operational Controls
» Poor Capacity management
» Supply Chain Issues
» Employee Issues incl.fraud
» Bribery and Corruption
» Regulation
» Commodity prices
» Demand Shortfall
» Customer retention
» Integration problems
» Pricing pressure
» Regulation
» R & D
» Industry or sector downturn
» JV or partner losses
» Debt and interest rates
» Poor Financial management
» Asset losses
» Goodwill and amortization
» Accounting problems
» Macroeconomic
» Political Issues
» Legal Issues
» Terrorism
» Natural disasters
Operational
FinancialHazard
Strategic
7
Below are four broad
categories of risk and
the various factors
associated with the
same. You can modify
them as per your needs

Risk Categories
Product Design
System/
Software
Manufacturing All Other
Project
Management
Quality
Product Performance Data Accuracy Assembly Consumer Service Team Work Quality System
Design Security Tools Environment Product Cost Sigma Levels
Text Here Text Here Text Here Text Here Text Here Text Here
8

Identify The Risk Categories
Risk Category Financial Financial Operational Operational Strategic Strategic
Risk Sub Category Funding Capacity Capacity Availability
Customer
Retention
Demand Shortfall
Likelihood 2 3 3 4 5 5
Risk level
Profitable Growth
Low Price
Develop New product
Leverage Technology
Risk Score by
Risk Category
9

10
Stakeholders Risk
Appetite
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RISK
Risk Tolernce
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Stakeholder Engagement

StakeholdersRisk
Appetite
Likelihood
Impact
Within Risk
Appetite
Exceeding Risk
Appetite
LowMediumHigh
Low Medium High
Forming Risk Appetite
11
Obtain an estimate of
the risk appetite of the
shareholders with the
help of the below bar
graph. This will help in
assessing the
acceptable risk level

Risk Tolerance (1/2)
Cost Insignificant increase <10% cost increase 10- 20% cost increase 20- 25% cost increase > 25% cost increase
Schedule
Insignificant fall
in schedule
<7% schedule slippage
7-10% schedule
slippage
10-15% schedule
slippage
15-20% schedule
slippage
Scope
Insignificant scope
decrease
Minor areas of
scope affected
Major areas of
scope affected
Reduction unacceptable
Project end item
is useless
Quality
Barely noticeable
degradation
Only demanding
applications are affected
Reduction requires
approval
Reduction unacceptable
Project end item
is unusable
Very Low Very High
Ordinal Scale (Example)
0.7 0.2 0.1 0.9 0.5Cardinal Scale (example)
Low Moderate High
Estimate the Risk
tolerance level of the
stakeholders on the
basis of the below
mentioned criteria. You
can modify these as per
your requirements
12

Likelihood
Impact
Business
continuity
problems Supplier
default
Loss of key
partnerships
IT problems
Poor project
management
Product or service
quality
Loss of key
managers
Risk Tolerance
(2/2)
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13
Below is a heat map
showing the risk
tolerance limit of the
stakeholders, where the
redline shows the
boundary between risks
that are acceptable &
those that are not

Procedure
Risk Planning Risk Identification Risk Monitoring
Risk Register Risk Assessment Risk Tracking
14

Risk Management Plan
Type Of
Risk
Outcome
Existing Risk
Treatment
Actions In
Place
Rating
Proposed Risk
Treatment
Actions To
Mitigate Risk
Additional
Resources
Target Date
Person
Responsible
Strategic risk
Performance
Deterioration
Proper
assessment of
underlying
strategies
2
Detailed
understanding of
the market
text here 31/4/2018
John
Smith
Text Here Text Here Text Here Text Here Text Here Text Here Text Here Text Here
15
Below is the template
to list down the plan to
manage the types of
risks expected by the
company

Risk Register
Type Of
Risk
Description
Of Risk
Probability Impact Risk Reduction
Strategy
Contingency
Plans
Risk
OwnerH M L Perf. Cost Time
Text Here - - - - - - - - - -
- - - - - - - - - - -
Text Here - - - - - - - - - -
- - - - - - - - - - -
Text Here - - - - - - - - - -
Text Here - - - - - - - - - -
- - - - - - - - - - -
16
Maintain a risk register
to keep a close track of
all the risks faced by
the company and their
impact on the company
performance

17
Consequences
Likelihood
Transfer Terminate
Tolerate Treat
Risk Identification
(1/2)

Risk Identification - Example
How Long Can
You Do Without?
Impact Of Doing
Without?
Vulnerabilities?
Contingency In Case Of
A Disaster?
Equipment
(IT only)
5 days
After five days no way to schedule
production or track orders
No UPS/ generator., MD hardware,
SPOF SME
Use paper reports for 5 days then
go manual for as many members
as possible
Facility 0 days
No production, potential for
bankruptcy, IT non- existent
Metal building, flood zone, poor
maintenance, no perimeter security , door
lock broken
Look for warehouse space, attempt
to salvage equipment and restart
operation, file bankruptcy
Personnel 0 days
Degraded operations, low service
levels
Too many SPOF
Best effort shifting of available staff,
temps
Raw Materials
30 days before new
deliveries
None until on hard exhausted Single supplier relationship Search for alternatives supplier
Transportation
System
30 days in 2 days out
No suppliers
No deliveries
Location, design of entrance None
Utilities
0 hours/power
0 hours/water
Extrusion shuts down, lines
cleaned, waste collected and
prepared for grinder, IT non-
existent
Single power feed, no generator or
backup water supply
None
Vendors (Sourcing) 4 hours No call center Mercy of vendor Being in-house
18
We have given an
example of identifying
risk in the below table,
you can alter the fields
as per your needs

Risk Identification (2/2)
» Budget Exceeded
» Unanticipated Expenditure
» Team is under-resourced
» Materials shortage
» Machinery unavailable
» Industrial Action
» Skills gap
» Bad weather results in re-work
» Weather delays progress
» Adverse environmental effects occur
» Environmental approvals not
complied with
» Poor communication
(Stakeholder dissatisfaction)
» Positive & timely
communications (positive
publicity)
» Schedule overruns
» Tasks omitted from Schedule
» Opportunity to compress Schedule
» Scope creep
» Scope poorly defined
» Project changes poorly managed
Identify
Risks
ResourcesCommunication
CostTime
EnvironmentalScope
19
This is another way of identifying
the types of risk associated with
a project basis different types of
factors like cost, time, resources
etc. You can list down the risk
associated with all/ some of
these factors as per your
requirements

Risk Assessment
Risk Rating Guide
Probability Impact Impact
High (5)
» Major uncertainties remain
» No or little prior experience or data
» Infrastructure and/or resources not in place
Performance, quality, cost or safety
impacts resulting in major redesign and
program delay
Medium (3)
» Some uncertainties remain
» Some experience and data exist
» Infrastructure in place but under-resourced
Performance, quality, cost and/or safety
impacts resulting in minor redesign and
schedule adjustment
Low (1)
» Few uncertainties remain
» Significant experience and data exist
» Infrastructure in place and fully
Performance, quality, cost and safety
requirements met within planned
schedule
Risk Scoring System
Consequences Likelihood of Occurrence Likelihood of detection
1. No. direct effect on operating service level
2. Minor deterioration in operating service level
3. Definite reduction in operating service level
4. Source deterioration in operating service level
5. Operating service level approaches zero
E. Probability of once in many years
D. Probability of once in many operating months
C. Probability of once in some operating weeks
B. Probability of weekly occurrence
A. Probability of daily occurrence
A. Detectability is very high
B. Considerable warning of failure before occurrence
C. Some warning of failure before occurrence
D. Little warning of failure before occurrence
E. Detectability is effectively zero
L M H
1 3 5 R Show stopper
H
5
5 15 25 O
Significant
risk
M
3
3 9 15 Y
Proceed with
caution
L
1
1 3 5 G No concern
20
We have listed the
framework for
assessing the risk
level. You can use the
same for risk
assessment

Risk Assessment (Contd..)
Risk Scoring Results
Consequences
Insignificant Minor Moderate Major Catastrophic
Likelihood 1 2 3 4 5
A. Almost Certain - - - - -
B. Likely - - - - -
C. Possible - - - - -
D. Unlikely - - - - -
E. Rare - - - - -
Extreme Risk High Risk Moderate Risk Low Risk
Immediate Action where senior
management get involved
Management responsibility should
be specified
Managed by specific
responsible person
Managed by
routine process
21
On the basis of the
framework, you can
obtain the risk score
and determine its
likelihood of
occurrence

Risk Analysis - Simplified Format
Risk Items (Potential Future Problems
Derived from Brainstorming)
Likelihood of Risk
Item Occurring
Impact to Project if
Risk Item Does
Occur
Priority (Likelihood
* Impact)
New operating system may be unstable 10 10 100
Communication problems over system issues 8 9 72
We may not have the right requirements 9 6 54
Requirements may change late in the cycle 7 7 49
Database software may arrive late 4 8 32
Key people might leave 2 10 20
22
Below is the simple version
of analysing the risk level on
the basis of the mentioned
parameters. You can alter
these values & parameters
as per your requirements

Risk - Analysis Complex
Step 1: Consider Step 2: Consider Likelihood Step 3: Calculation Risk
What is the consequence of the hazard occurring. Consider what is
the most possible consequence with respect to work
What is the likelihood of the hazard consequences
occurring in Step1
1. Take Step 1 rating and select correct column
2. 2. Take Step 2 rating and select correct row
3. 3. Use the risk score where the two ratings cross on
the matrix below.
Safety at work Regulatory Almost Is expected to occur in most H = High, S = Serious, M = Medium, L = Low
Extreme Sickness Non compliance Certain Circumstances (once per year)
Critical Casualty Major non compliance Likely
Will probably occur once
(every 5 year)
Major Medical treatment Warning Possible
Event might occur at some
time (10years)
Minor First aid Minor non compliance Unlikely/ Rare
Event expected to occur only
in exceptional circumstances
(20+ years)
Description of Risk
Control Measures
(Detail any existing
Controls)
Risk Analysis Additional Control
(Detail additional to be
implemented Controls)
Risk Analysis(with
additional controls)
C L
Risk
Rating
C L
Risk
Rating
Text Here Text Here Text Here Text Here Text Here
Text Here Text Here Text Here Text Here Text Here
Min Maj Crit Ext
Almost
Certain
S(A4) S(A3) H(A2) H(A1)
Likely M(B4) S(B3) H(B2) H(B1)
Possible L(C4) M(C3) S(C2) S(C1)
Unlikely Rare L (D4) M(D3) M(D2) S(D1)
Likelihood
23
Below is a complex version
of analysing the risk level.
We have listed the steps to
be followed in calculating
the risk and its certainty.
Using these steps you can
estimate the risk level
associated with your project/
company.

Risk Response Plan
Avoid
Mitigate
Transfer
Accept
Negative
Risk
Positive
Risk
Exploit
Enhance
Share
Accept
Responding to Risk
24
There are many ways in
which you can respond to
the risk levels. We have
listed down below both the
negative & positive risk
response ways. You can
choose any as per your
requirements.

Risk Response Matrix (1/2)
Risk Event Response Contingency Plan Trigger Who is responsible
Interface Problems Mitigate: Test prototype
Work around until help
comes
Not solved within 24 hours John
System Freezing Mitigate: Test prototype Reinstall OS Still frozen after one hour Louise
User backlash Mitigate: Test Demonstration Increase Staff Support Call from top management Helen
Hardware
malfunctioning
Mitigate: Select Reliable
Vendor
Transfer: Warranty
Order replacement Equipment fails Tom
25
Once you estimate the risk
and plan the response. The
next step is to prepare a
detailed response matrix
stating the contingency plan,
its duration and the person
responsible.

Risk Response Matrix (2/2)
High
Low
Probability
» Labor
Productivity
» Design
Changes
Avoid
» Different Site
Conditions
» Weather
Delays
» Unrealistic
Schedule
Retain
» Defective Work
Transfer
» Labor dispute/
Strike
» Equipment
Failure
Retain
High
26
You can also show the risk
response with the help of
graph showcasing the
probability of risk and the
risk response associated
with the same.

Risk Control Matrix
Key Process
Number
Process
Risk
Number
Risk
Control
Objective
Control
Number
Control
Description
Control
Owner
Your Text Here - Your Text Here - Your Text Here - Your Text Here -
27
Prepare a risk control matrix
to have a close tap on the
risk related measures you
have intended to take. The
below table helps you to
keep a log of the control
measures you have decided
to take to manage the risk
levels.

Risk Tracker (1/2)
ID
Description of
Risk
Impact Risk Response High Level
1 Text Here Text Here Text Here Text Here
28
which could be used to
track the risk factors
and how we are
planning to overcome
the same

Risk Item Tracking (2/2)
Risk Items
Monthly Ranking
Risk Resolution
This Month Last Month Number of months
Inadequate Planning 1 2 4 Working on revising the entire project plan
Poor Definition of Scope 2 3 3
Holding meetings with project customer and
sponsor to clarify scope
Absence of leadership 3 1 2
Just assigned a new project manager to lead
the project after old one quit
Poor Cost Estimates 4 4 3 Revisiting cost estimates
Poor time Estimates 5 5 3 Revisiting schedule estimates
29
which could be used to
track the risk factors
and the progress we
have made so far.

Tools & Practices
Probability &
Impact Assessment
Risk Mitigation
Strategies
Quantitative
Analysis
Risk Impact
Analysis
Qualitative
Analysis
30

Risk Impact and Probability Analysis
Impact Cost Time Quality
Very Low
Manageable by exchange against Internal
budgets
Slight slippage against internal targets
Slight reduction in quality/scope, no overall
impact
Low
Require some additional funding from
Institution
Slight slippage against key milestones or
published targets
Failure to include certain ‘nice to have’
elements
Medium
Requires Significant additional funding from
Institution
Delay affects key stakeholders – loss of
confidence in the project
Significant elements of scope for functionality
will be unavailable.
High
Requires Significant reallocation of
Institutional funds (or borrowing)
Failure to meet key deadlines in relation to
academic year or strategic plan
Failure to meet the needs of a large
proportion of stakeholders
Very High Increases threaten viability of project Delay jeopardises viability of project Project outcomes effectively unusable
31
Impact analysis is a tool the
assess the level of risk on
the project/ company. We
have listed down three
broad criteria's and the risk
impact associated with
them. You can alter them as
per your requirements.

Risk Impact & Probability Analysis
Impact Assessment Schedule Cost Performance
Probability Of Risk
Occurring
3
Large slip to key milestone of
contractual importance
Large increases in total cost
Major shortfall in operational
performance
>50%
2
Small slip to key milestone of
contractual importance
Significant increase in total cost
Minor shortfall in operational
performance, which impacts
upon the customer
5-10%
1
Small slip to an internal
milestone
Small increase in total cost
Minor shortfall in operational
performance, which does not
impact upon the customer
5-10%
0 No impact on schedule No increase in total cost
No impact on operational
performance
<5%
32
Impact & probability analysis is
another tool to assess the level
of risk on the project/ company.
We have listed down three broad
criteria's and the risk impact as
well as probability associated
with them. You can alter them as
per your requirements.

Risk Mitigation Strategies
Technical Risk Cost Risks Schedule Risks
Emphaisize team support and avoid stand-alone
project Structure
Increase the frequency of project monitoring Increase the frequency of project monitoring
Increase project manager authority
Improve problem handling and communication
Improve communication, project goals
understanding, and team support
Select the most experienced project manager
Increase the frequency of project monitoring Increase project manager authority
33
This strategy is used to
reduce the adverse effects
of risk. We have listed down
the three categories of risk
and also the strategies to be
opted to manage the risk
levels. You can alter these
as per your requirements.

Risk Mitigation Plan
Category Identified Risk Mitigation Plan
Client
Management
Miscommunication with sponsor/ client regarding project
requirement and expectations
Update client more frequently along the way with project progress
Server
Server is down which causes project to be slightly delayed due to
application not able to load
Perform periodical check on server status
Technical
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discontinue support for features used in our development as we
using responsive bootstrap. This will lead to changes in
development plan and will delay our progress
Monitor any updates on popular web browser and / or bootstrap and
make sure all UI design works as intended on updated web
browsers or responsive bootstrap
34
Once you decide on the risk
mitigation strategy then you
plan to implement the same.
Below is the table wherein
you can list down the risk
identified and the mitigation
plan to curb the same.

Qualitative Risk Analysis
Impact 1 2 3 4 5
Probability Negligible Minor Moderate Significant Severe
(81-100)%
Low
Risk
Moderate
Risk
High
Risk
Extreme Risk Extreme Risk
(61-80)% Minimum Risk
Low
Risk
Moderate
Risk
High
Risk
Extreme Risk
Low
Risk
Moderate
Risk
High
Risk
High
Risk
Low
Risk
Low
Risk
Moderate
Risk
High
Risk
(1-20)% Minimum Risk Minimum Risk
Low
Risk
Moderate
Risk
High
Risk
Each threat and opportunity will be further looked at for quality of data available and the risk ratings imparted
Project Risk (Threat and Opportunity) Matrix
35
This technique helps in
assessing the probability of
risk event occurring and its
relative impact if it does
occur. Using the table below
you can assess the risk level
associated with the project.

Quantitative Risk Analysis
Risk Title &
Description
Resp Due Date Cat. Rating Prob. Impact Total Score
Mitigation
Actions
Contingency
Plan
Cost Risk
Insufficient
funds to
support the
bid
ABC 5/31 Cost High .80 4 3.20
Find a partner
to help share
costs
Borrow money
from the bank
or investor to
fund the effort
Schedule
Risk
Insufficient
resources to
complete work
on time
BMC 6/1 Sched. Low .55 4 2.20
Borrow
additional
proposal staff
from another
division
Hire additional
proposal staff
or consultants
» Risk Score = Probability * Impact
» Risk Score values are between 1-4 (with 4 being the highest risk) or
red, yellow, green, blue.
» Risk Probability values are between 0.1 (Remote Chance) – 1.0
(Certain)
» Risk Impact values are between 1 (insignificant) - 4 (Unable to
meet objectives)
36
This technique helps in
assessing the probability of
risk event occurring and its
relative impact if it does
occur. Using the table below
you can assess the risk level
associated with the project.

Risk Management Process and Procedures icon slide37

39
Coffee Break
10:00 To 10:30
Let’s Start again
in 30 Minutes

Area Chart
This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”.
40
0
10
20
30
40
50
60
70
80
90
100
FY '12 FY '13 FY '14 FY '15 FY '16 FY '17 FY '18
SalesInPercentage(%)
Product 02Product 01

Stacked Bar
0 10 20 30 40 50 60 70 80 90 100
FY 01
FY 02
FY 03
FY 04 70%
55%
40%
30%
41
Product 01 Product 02
This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”.

Our Mission
Mission
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Value
Vision
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43
Name Here
Designation
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Adapt it to your needs and
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Name Here Name Here
Designation
attention.
Designation
attention.
Our
Team

44
About Us
Values Client
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Target Audiences
Preferred by Many

Our Goal45
Goal 02
Goal 03
Goal 01

Comparison46
VS
Female
45%
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and capture your audience's attention.
Male
60%
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Users Of Social Media Users Of Social Media

Financial47
$150
Minimum
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$250
Medium
$350
Maximum

48
It’s not just about being better. It’s
about being different. You need to
give people a reason to choose
your business.
Quotes

Dashboard
0 100
20
10
30
40
80
90
70
60
50
0 100
20
10
30
40
80
90
70
60
50
0 100
20
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50
attention.
40%
attention.
60%
attention.
80%
49

Timeline
01
2014
02
2015
03
2016
04
2017
05
2018
50

Our Target
1
your needs and capture your
Your Text Here
2
Your Text Here
3
Your Text Here
51

Mind Map
02
03
01
04
52

53
Thanks For Watching!
Address:
# street number, city, state
Contact Numbers:
0123456789
Email Address:
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