IT-301 Project Management I: Unit 8: Risk Management

Agenda Unit 8 Risk Management Assignment Discussion

Definition of Project Risk Management “Project Risk Management includes the processes of conducting risk management planning, identification, analysis, response planning, and monitoring and control on a project. “The objectives of Project Risk Management are to increase the probability and impact of positive events, and decrease the probability and impact of negative events in the project.” Project Management Institute (PMI) PMBOK, Project Management Body of Knowledge Key component of identification of risk is to learn to listen and recognize the risk voiced by team members that may be given during status meetings. The actions taken to further investigate an uncertainty, may be the one item that prevents schedule slip, cost over run or averts another crisis! Don’t ignore this source of continuous risk identification. Don’t hound your teams, but ask if they feel the uncertainty should be investigated further.

One of the Biggest impediments to Risk Management: Some Stakeholders Think They Don’t Have Risks! Risk Aversion – hear no evil, see no evil, speak no evil but then you loose the proactive time period to plan for risk events

Risk Management in Application “For risk to happen once is understandable, since uncertain events can occur even on the best-managed projects. If the same risk occurs twice, that is unfortunate, because the chances should be less than the first time. But for a risk to happen a third time is unacceptable, as it exposes a lack of learning from the past.” Dr. David Hillson, Risk Doctor Limited www.risk-doctor.com Significance is that no action taken – didn't learn, didn’t change, same result

Unit 8: Risk Management Planning Risk Management Identify Risks Deciding how to approach/plan activities related to the project Identify Risks Documenting the risks that can occur for the project (IF-EVENT-IMPACT-RESPONSE) Establish a risk register, responses, contingency, fallback Tools: Risk Break Breakdown, List of Common Conditions, brainstorming, SWOT Analysis Perform Qualitative Risk Analysis Understanding effect of the risks on the project Top Ten Impact Tracking, Probability/Impact Perform Quantitative Risk Analysis Understanding the scope of the risks (prioritize for further analysis) Tools: Decision Trees, Monte Carol Simulation, Expected Monetary Value, etc. Proactive Planning for known risks is key, the format and clarity of the risk statement is important. If the risk is not clearly documented, time can be wasted figuring out just what is this risk…

Unit 8: Risk Management Plan Risk Responses Monitor and Control Risks Threat Responses: Avoid, Accept, Transfer, Mitigate Opportunity Responses: Exploit, Share, Enhance, Accept Responses to risk may need to change as the situations surrounding the risk change Perform a Project S.W.O.T Analysis to understand your projects special needs Establish triggers that prompt for evaluation of risk status and surrounding project events or activities Monitor and Control Risks Executing the planned responses Review project performance information Evaluate Change requests for risk/impact Reviewing updates to overall project for risk Reviewing other risks for impact to other risks Strength Weakness Opportunity Threat Mitigate very overloaded term – it is only one of the risk responses SWOT Analysis done by a team can uncover risks that may have lain dormant Establish a risk breakdown structure by looking at each area of the WBS and brainstorming what risks can come from this area Don’t forget environmental or external items as well as internal team, process or product ones.

Common Mistakes in Risk Management Risk Management Is Done at the Wrong Time Risks are not properly named Categories of risk are missed Risk Qualification Takes too long Team does not realize risk management can help prove the value of project management (Effective Planning decrease project time and cost) Team does not realize there should be an action plan in place before the risk occurs Team wastes time by doing the wrong things while the project work is being done Project managers do not push back

Common Mistakes in Risk Management Teams forget to perform these monitor and control activities: Revisit low ranking risk or non-critical risks to see if update needed to response plan Adjustments are done to deal with the severity of the actual risk Look for any unexpected effects or consequences of risk events Re-evaluate when the project deviates from the baseline Update risk response plans Updating the project plan when new risk plans are developed Create a risk register or database for use through out the organization Periodic evaluation of risk is key to prevent risk from converting to problems, issues, disasters… As the project phases changes so does the risk environment

Additional References Risk Management, Tricks of the Trade® for Project Managers book PM Crash Course™ book Common Risk Management Errors Online Workshop Risk Management, Tricks of the Trade® for Project Managers Online Course Free Tricks and Tools at: www.rmcproject.com