6-1 ELC 347 project management Day 13

Agenda Questions Assignment 5 posted –Due Oct 12:35 PM Integrative Project part 2 feedback –You needed more training on MS project which I did not provide, it was not counted against you Integrative Project Part 3 –Page –Due Date October 28, 2010 Today Risk Management and MS project MS project tutorial 3-2

7-3 Risk Management Chapter 7 © 2007 Pearson Education

6-4 There is no security on this earth. Only opportunity. ~Douglas MacArthur The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty. ~ Winston Churchill You'll always miss 100% of the shots you don't take. ~Wayne Gretzky The Chinese use two brush strokes to write the word 'crisis'. One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger-but recognize the opportunity. ~John F. Kennedy In these matters the only certainty is that nothing is certain. ~ Plinius the older

7-5 Risk Risk management - the art and science of identifying, analyzing, and responding to risk factors throughout the life of a project and in the best interest of its objectives. Project risk – any possible event that can negatively affect the viability of a project Risk Uncertainty Opportunity

7-6 Risk Vs Amount at Stake Phase 1 Concept Conceive (C) Phase 2 Development Develop (D) Phase 3 Implementation Execute (E) Phase 4 Termination Finish (F) Time $ Value Increasing Risk Total Project Life Cycle Amount at stake PlanAccomplish Opportunity and risk Period of highest risk impact

7-7 Tony’s Project Risk Model Time (uncertainty) Success Failure Project Start Opportunity Risk Project time line

7-8 Process of Risk Management What is likely to happen? Known risks What can be done? Known mitigation techniques What are the warning signs? Indicators What are the likely outcomes? Forecasts Project Risk = (Probability of Event)(Consequences of Event)

7-9 Four Stages of Systematic Risk Management  Risk identification  Analysis of probability and consequences  Risk mitigation strategies  Control and documentation

7-10 Risk Clusters Financial Technical Contractual/Legal Common Types –Absenteeism –Resignation –Staff pulled away –Time overruns Commercial Execution –Skills unavailable –Ineffective Training –Specs incomplete –Change orders

7-11 Risk Factor Identification  Brainstorming meetings  Expert opinion  Past history  Multiple (team based) assessments  The person closest to the risk knows it best

7-12 Risk Management Assessment Matrix Consequences Likelihood High Low High

7-13 Qualitative assessment

7-14 Project Risk Scoring 1.Identify factors and assess the probability (P f ) and consequences (C f ) of failure 2.Calculate overall probability & consequence 3.Calculate overall risk factor

7-15 Quantitative Risk Assessment

7-16 Risk Mitigation Strategies Accept Minimize Share Transfer Contingency Reserves – Task contingency – Managerial contingency Mentoring Cross training

7-17 Control & Documentation Help managers classify and codify risks, responses, and outcomes Change management report system answers What? Who? When? Why? How?

6-18 CONTINGENCY DOCUMENT FOR ADJUSTMENTS TO PROJECT PLAN

7-19 Project Risk Analysis & Management Extends risk management over project’s life cycle Key Features of PRAM  Risk management follows a life cycle  Risk management strategy changes over the project life cycle  Synthesized, coherent approach

7-20 Nine Phases of Risk Assessment 1.Define 2.Focus 3.Identify 4.Structure 5.Clarify ownership of risks 6.Estimate 7.Evaluate 8.Plan 9.Manage