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Project Risk Management And Case study. Eng.Ahmed Ibrahim.

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1 Project Risk Management And Case study. Eng.Ahmed Ibrahim

2 AHMED IBRAHIM, MSc (student),BSc, PMP ®, PMI- RMP® Ahmed Ibrahim holds a Bachelor of Civil Engineering. Member and Certified by the project management institute – Pennsylvania - USA as: 1 - Project manager professional (PMP ®) – 2011 2 - Risk Manager Professional (PMI-RMP ®) – 2013 3 - Master of projects management student., in addition to practical experience in the field of project management, executive management and human resources. He have projects management knowledge that always seek to develop, update, and share with others, especially the professionals in the field of project Management. Other skills and interests. (PMP Certificate training, PMI-RMP Certificate training, planning and schedulingbyprimaveraP6.8.2training,Excelandreports&dashboardstraining) PMO (projects management office) creation and workflow process improvement. This is me 2 All copy right reserved to CELL: + 966 545821579 E-mail: E-mail : Web:

3 Project Management Over View 3 All copy right reserved to Project Start Project finish Circumstances 1 Circumstances 2 Circumstances 3

4 Project Risk Management over view 4 What is a risk?  Risk is an uncertain event or condition that, if it occurs, has an effect on at least one project objective.  A risk may have one or more causes and, if it occurs, it may have one or more impacts. Objectives can include scope, schedule, cost, and quality. A cause may be a requirement, assumption, constraint, or condition that creates the possibility of negative or positive outcomes. All copy right reserved to

5 WHY IS RISK MANAGEMENT IMPORTANT? For instance, but not limited to:  Fewer sudden shocks and unwelcome surprises.  More efficient use of resources.  Better service,product and result delivery.  Reduction in management time spent (fire-fighting).  Better management of project and maintenance activities.  Lower cost of budget at completion.  Improved innovation.  Increased likelihood of change initiatives being achieved. 5 All copy right reserved to

6 RISK COMPONENTS Risk – Events or consequences that have the probability of occurring during a project and that are measured by their impacts on the project. Components ‒ Risk event ‒ Risk event probability ‒ Risk outcome or consequence (Amount at stake) ‒ Risk event status (Probability x amount at stake) RISK & PROJECT LIFE CYCLE Risk varies over the life cycle Risk is high in the concept and development phases, decreasing as work is accomplished 6

7 7 A risk statement could be: “We may have insufficient resources to conduct the beta tests which would delay the project by one week.” (can’t be 100% certainty) All copy right reserved to RISK VS PROBLEM A problem statement would be: “We have insufficient resources to conduct the beta tests which will delay the project by one week.” (100% certainty)

8 1. Plan Risk Management Process of deciding how to approach and conduct (plan & execute) the risk management activities for a project. 2. Identify Risks Determine which threats/opportunities might affect the project & document their details 3. Perform Qualitative Risk Analysis Assess each risk's chance of occurring & probable impact to get a prioritized list of risks requiring more analysis or action 4. Perform Quantitative Risk Analysis Numerically analyze identified risks' effect on overall project objectives 8 All copy right reserved to RISK PROCESSES 1/2 RISK PROCESS DEFINITIONS

9 5. Plan Risk Responses Analyze risks and make a plan of actions & options to enhance opportunities & reduce threats to project objectives 6. Control Risks Track identified & residual risks, identify new risks, execute risk response plans & evaluate their effectiveness 9 RISK PROCESSES 2/2 RISK PROCESS DEFINITIONS Planning.1 Plan Risk Management.2 Identify Risks.3 Perform Qualitative Risk Analysis.4 Perform Quantitative Risk Analysis.5 Plan Risk Responses Monitoring and controlling.6 Control Risks Processes by process group All copy right reserved to

10 Establish an agreed-upon approach for conducting risk management activities & evaluating risk Ensure that the level, type, and visibility of risk management are suitable with both risk and importance of the project to the organization Provide sufficient resources and time for risk management activities Planning Risk management should be completed early during project planning, since it is critical to successfully performing the other processes 10 1.PLAN RISK MANAGEMENT HOW DO YOU PLAN FOR RISK? All copy right reserved to

11 Identify Risks determines which risks might affect the project & documents their characteristics Participants in identify risk activities can include the following, where appropriate: project manager, project team members, risk management team (if assigned), risk experts from outside, customers or end-users, stakeholders, etc. All project personnel should be encouraged to identify risks. Identify risks - is an iterative process because: – Risk events may happen, which may cause new risks – Status of identified risks may change. – New risks may occur. 11 IDENTIFY RISKS WHAT HAPPENS IN IDENTIFY RISKS? All copy right reserved to

12 QUALITATIVE RISK ANALYSIS HOW DO YOU PERFORM QUALITATIVE RISK ANALYSIS? Prioritize identified risks for further action, such as Quantitative Risk Analysis or Risk Response Planning. Organizations can improve the project’s performance effectively by focusing on high-priority risks. Assess the priority of identified risks using their probability of occurring, the corresponding impact on project objectives if the risks occur. Also use factors such as time frame & risk tolerance of the project constraints of cost, schedule, scope & quality 12 All copy right reserved to

13 Analyze priority risks (identified in Qualitative Risk Analysis) Analyzes the effect of those risk events and assigns a numerical(quantitative) rating to those risks. It also presents a quantitative approach to making decisions in the presence of uncertainty. The process uses techniques such as Monte Carlo simulation & decision tree analysis to: ‒ Quantify possible outcomes for the project and their probabilities ‒ Assess probability of achieving specific project objectives ‒ Identify risks requiring the most attention ‒ Identify cost, schedule & scope targets in the light of risk ‒ Make best decisions when conditions or outcomes are uncertain Experienced risk managers sometime perform it directly after Identify Risk. 13 PERFORM QUANTITATIVE RISK ANALYSIS All copy right reserved to

14 PLAN RISK RESPONSES Develop options & determine actions to enhance opportunities and reduce threats Risk responses must be: o Appropriate to the significance of the risk o Cost effective o Timely o Realistic o Within the project context o Agreed upon by all parties involved o Owned by a responsible person 14 All copy right reserved to

15 15 1. Strategies for Negative Risks or Threats AvoidAvoid MitigateMitigate AcceptTransfer PLAN RISK RESPONSES All copy right reserved to

16 2. Strategies for Positive Risks or Opportunities 16 EFFECT Exploit ShareEnhance Ignore/ Accept All copy right reserved to

17 Identify, analyze & plan for new or changed risks keep track of the identified risks and those on the watch list reanalyze existing risks Monitor trigger conditions for contingency plan Monitor residual & secondary risks Review the execution of risk responses while evaluating their effectiveness. Monitor & Control Risk process applies techniques, such as variance and trend analysis, which require the use of performance data generated during project execution 17 CONTROL RISK WHAT HAPPENS IN MONITOR AND CONTROL RISK? All copy right reserved to

18 Some of Project Properties. Location on KSA-Yanbu (Royal commission zone) Project consisted of 7 housing buildings 6 floors each. Area of the project was 25000 M2 Project final budget was 56 000 000 SAR. Project start date was 19 April 2010. Project planned end date was 18 April 2012. Project actual finish date was 5 Jun 2012. Project end slippage (delay) 48 days. Project owner management staff members was 16. Project contractor management staff was 22 18 Our case study All copy right reserved to

19 REFERENCES.. Lecture References PPPProject Management Body Of Knowledge (PMBOK® Guide) 5th edition TTTThe Standard for Portfolio Management (PMI) PPPPractice Standard For Project Risk Management QQQQ & As for The PMBOK® Guide Fourth Edition OOOO’Reilly Media, Inc., Head First PMP, Jennifer Greene, PMP & Andrew Stellman, PMP. RRRRita Mulcahy, PMP, M.B.A, PMP® Exam Prep, 8th Edition,  http://  http:// WWW.PROFESSIONALENGINEERS.US  http:// WWW.PLANNINGENGINEER.NET19

20 WWW.PLANNINGENGINEER.NET20 Thank you too much for spending your time and effort for earn more knowledge Ahmed Ibrahim WWW.PROFESSIONALENGINEERS.US GM@PROFESSIONALENGINEERS.US

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