1. 10.30 Alastair Brown Valtech 11.30 Val Jonas Risk Decisions Group 12.30 Paul Bamforth Asta Development Plc 1.30 Kelvin Kirby EPM Consulting Group 2.30 Vince Hines Wellingstone Ltd Solutions Presentations Zone

2. Portfolio Risk Management – No Time to Waste Project Challenge 26 th March 2009 Val Jonas, CEO Risk Decisions

3. Agenda  The Management challenge  Multiple perspectives  Implementing Portfolio Risk Management  Summary & Conclusion

4. Portfolio Management – the challenge InterdependentCompetingStrategicSponsoredEvolving Project Z Project Y Project X Project E Project D Project A Project B Project C

5. Management & Communication Set objectives & context Create detailed delivery plans Raise concerns & assumptions Corporate/Strategic Business objectives Air gap

6. Senior managers risk management role  Understand the portfolio of business objectives  Set clear objectives for staff and the organisation  Set the context in which to manage risk (trade-offs & risk appetite)  Establish and manage risk management reserve  Ensure good communication takes place

7. Project Managers Risk Management Role  Understand business case and project context  Baseline the risk register  Oversee risk management activities  Embed risk thinking into project review meetings  Ensure risk response actions are carried out (threats, issues & opportunities)  Utilise risk management reserve efficiently  Manage stakeholder expectations  Deliver to time, cost and quality

8. Portfolio management - the challenge Shareholder / Stakeholder Value Project Deliverables Programme & Operational Benefits What are the risks? What are the risks? What are the risks?

9. Agenda  The Management challenge  Multiple perspectives  Implementing Portfolio Risk Management  Summary & Conclusion

10. Strategic Perspective GOVERNANCE (Risk, Controls & Compliance) STRATEGY (Objectives) ORGANISATION (Structure & Stakeholders) Shareholder /  stakeholder Value

11. Project Perspective COST (Budgets) SCHEDULE (NPV) QUALITY  Deliverables (Constraints & Assumptions)

12. Programme / Operational Perspective DEPENDENCIES ESCALATION / DELEGATION SCOPE & BUDGETS  Benefits

13. OGC risk perspectives © OGC, Management of Risk, 2007

14. Agenda  The Management challenge  Multiple perspectives  Implementing Portfolio Risk Management  Summary & Conclusion

15. Risk Management Process  Establish context and risk appetite  Identify risk events and uncertainties  Plan appropriate response actions  Assess required contingencies  Understand and manage exposure Same process for strategic, programme, operational and project risks

16. Timely risk management? Risk Management looks into the future to identify potential threats and opportunities Risks ? ProgressTargets Lessons learned Take appropriate action, before it is too late to influence the outcome Now

17. Perspective on Risk Management Actions  Strategic  Review / amend targets & scope  Mature approach to risk budgeting  Manage expectations  Programme / Operational  Reconcile dependencies & juggle resources  Manage systemic risks  Oversee risk escalation / delegation  Project  Optimal use of mitigation budget  Managed risk taking  Aggressive targets and use of schedule reserve

18. Management & Communication Set objectives & context Create detailed delivery plans Raise concerns & assumptions Corporate/Strategic Business objectives Air Gap

19. The Corporate Risk Tree Objectives Risk Appetite Priorities Strategic Mitigation Authorisation Behaviour Tactical Risks Significant Tactical Risks Corporate Risks Strategic Risks +

20. Portfolio risk management Executive Board OperationsProgrammes Functional ProjectsLogisticsContractors Supply chain Contractors Information Guidance Supply chain

21. Agenda  The Management challenge  Multiple perspectives  Implementing Portfolio Risk Management  Summary & Conclusion

22. Culture & Behaviours  For the benefits of risk management to be fully realised there needs to be:  a clear process with the interfaces across all levels clearly understood and responsibility for the process elements clearly defined  downward (not just upward) communication  improved access to data and co-operation between the practitioners (tools & processes)

23. Portfolio management is a risk to your project!  Business Case Approvals  Just one of many projects  Change of business context  Project inevitably has subjective view  Is excellent performance enough?  Each project must also deliver portfolio value

24. Conclusion  Risk management must work coherently at different levels to be fully effective Operational - Project – Programme - Strategic  Too often exercised independently, at different levels, by specialists working only within their area  The human aspect of achieving porfolio risk management must not be overlooked  Joining up risk management across the organisation is a challenging task, so start now, there’s no time to waste!

25. Conclusion!

26. ‘Portfolio Risk Management – No time to waste’ White paper : - visit Risk Decisions at Stand 25 - www.riskdecisions.comwww.riskdecisions.com Val Jonas, CEO Risk Decisions Group