Lecture 2 Risk Management Process 1

Risk management It paves the path for project management. It results in analysis of external & internal situations Has the potential to discover opportunities and uncover risks. 2

What is risk Management 3 Definition 1: The objective of risk management is to reduce the harm due to risks. Definition 2: Risk management is a systematic approach to reducing the harm due to risk, making the project less vulnerable and product more robust.

What is risk Management 4 The benefits of risk managements can be grouped under two categories: 1. Primary (Direct) Benefits & 2. Secondary (Indirect) Benefits

What is risk Management 5 Primary benefits: 1. Targets are met 2. The projects are saved from major risks 3. The projects is less vulnerable to risks 4. People are prepared and ready to solve problems. 5. Products are more reliable and dependable 6. Cost of poor quality drops 7. Ad hoc crisis management practices are discouraged.

What is risk Management 6 Secondary Benefits: 1. Improvement in goal setting, estimation and planning 2. Sensible decision making 3. Process optimization 4. Proactive Strategies 5. Team-work & group thinking 6. Continued improvement

Risk OR Opportunity 7 Definition: “Risk management also aims to read risks as improvement opportunities and provide inputs to growth plans”

Risk Management Paradigms 8 Risk management flourish on attitude & healthy approaches.  These bring foster sensitivity and vision in development meanwhile depth in planning and decision making. The Project Management Institution (PMI) has developed guidelines for risk management. One of the best set of guideline available in any kind of project.

Risk Management Paradigms 9 The PMI presents the guidelines in a few carefully chosen process steps; 1. Risk management planning 2. Risk identification 3. Qualitative Risk Analysis 4. Quantitative Risk Analysis 5. Risk Response planning 6. Risk Monitoring & Tracking For each process step, PMI defines input, tools, techniques and output.

Risk Management Paradigms 10 Institution of Risk Management (IRM) has developed a generic and valuable standards: 1. Risk definition 2. Risk management 3. Risk assessment 4. Risk analysis 5. Risk evaluation 6. Risk reporting & communication 7. Risk treatment 8. Monitoring and review of RM process.

Risk Management Paradigms 11 The SEI has developed the continuous Risk management (CRM) paradigm, that have universal appeal; 1. Identify 2. Analysis 3. Plan 4. Mitigate 5. Track 6. Communicate

Risk Management Paradigms 12 Barry Boehm, the director of center for software Engineering, University of southern California, present a good Risk Assessment and Risk control. This Involves two phases; 1. Risk Assessment, 2. Risk Control.

Risk Management Paradigms Risk Assessment: a. Risk Identification, b. Risk Analysis, c. Risk Prioritization. 2. Risk Control: a. Risk Management Planning, b. Risk Resolution, c. Risk Monitoring.

Is there a process? 14 Some questions exists regarding risk management process are: 1. Can a risk culture be brought into a framework? 2. Can be managed by institution by a defined process. 3. Can be there any scientific procedures to manage Risk that are unknown, unpredictable & uncertain. 4. Is there any entry or exit criteria? 5. Do we need creative steps that go beyond traditional tactics?