1 Project Risk Management Sharif Project Management Session 10.2
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Project RiskManagement
Sharif Project Management
Session 10.2
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Preparing for Possibilities
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Risk Management Plan
The systematic processes of identifying, analyzing & responding to project risks
A formal approach to the process as opposed to an intuitive one.
1. Define objectives2. Identify Risk3. Quantify Risk4. Develop Response5. Risk Control
Risk Management
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1- Define Objectives
Divide and then defineSubdivide by stakeholders
Subdivide by PM knowledge area
Subdivide by OBS (departments)
Subdivide by WBS (work package)
Subdivide by constraints
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Define Objectives, Sub-divide Objectives
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2- Risk Identification
Start with each objective•Cause to effect•Effect caused by
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Risk IdentificationHistorical data/closeout reportsStructured questionnairesStructured interviewsBrainstormingStructured checklist (WBS)Flow charts (build methods)Judgment based on experienceSystem AnalysisScenario Analysis
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Why Projects Fail
InnovationConcurrencyStakeholders CommunicationScope of workPoor estimatingPoor planning
Insufficient reviewsInsufficient controlLack of commitmentIncomplete and/or in-accurate informationLack of supportfrom team members. . . .
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3- Risk Qualification
For each risk, identify the risk degree,qualify by experts, and quantify!
Subjective
Objective
• Probability• Expected Value• Variance
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Consequence, Priority
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5- Risk Response
• Eliminate Risk Remove early
• Mitigate Risk Reduce probability/impact
• Deflect Risk Transfer to another party
• Accept Risk
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Contracting
Fixed price contract
Cost plus contract
Unit rates contract
Turnkey contract
BOOT contract
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Risk Management Plan
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6- Risk ControlImplements Risk Management plan to make it happen. Most neglected, but most important.Includes communication, training, practice runs. Develop company culture & attitude.Risk Management plan is monitored/updated on a regular basis to include any changes:
Changes in the scope of workChanges in the build methodChanges in the team membersChanges in the suppliers
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You Never Know . . . .