Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Assumptions and Risk

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand By the end of the session, participants will be able to: Identify and validate project assumptions; Identify and analyze project risk; Have hands-on experience in completing the 4 th column of the DMF. Session Objectives

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Presentation (30min) Learning Team Exercise (1hr 15min) Team Presentation of Output (1hr 30min) Session Flow

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Project Framework ACTIVITIES Design and Monitoring Framework Reference ACTIVITIES Design Summary Performance Targets/Indicators Data Sources/ Reporting Mech. Assumptions/ Risks Outcome Impact Outputs Activities with Milestones Inputs Version

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand 5 Describe necessary internal and external conditions in order to ensure that the activities will produce results Assumptions are risks, which can jeopardize the success of the project Are worded positively, i.e. they describe circumstances required to achieve certain objectives Assumptions

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand 6 Should be relevant and probable If an assumption is not important or almost certain: Do not include If an assumption is unlikely to occur: Killer assumption – abandon project Assumptions

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand 7 Example of Assumptions: Political – stability of government Economic – sustainable economy Assumptions

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand 8 Example of Assumptions: Adequate funds materials. Skilled people – training needs. Approvals & contracts – legal, administrative. Participation of stakeholders. Assumptions

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand 9 Outcome Impact Activities Assumptions Outputs Assumptions Activities to Impact through Assumptions

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Definition PMBOK ® guide definition. Uncertain event or condition, that if it occurs, has a positive or negative effect on a project’s objectives.

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Amount of Risk Total Uncertainty Relative Uncertainty Total Certainty No Information Some Information Complete Information Information vs. Uncertainty Relationship

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Management Processes Risk Identification Risk Analysis Risk Response Planning Risk Monitoring & Control

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Identification Determining the risk events that are likely to affect the project and classifying them according to their cause or source.

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Types of Risks Business risks – those normal risks of doing business that carry opportunities for both gain and losses.

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Types of Risks Pure or insurable risks – those risks that present only an opportunity for loss Direct property damage Indirect consequential loss (business interruptions Legal liability personnel

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Identification Tools Brainstorming Delphi technique Interviewing Checklists Assumptions analysis Cause and effect diagram

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Management Processes Risk Identification Risk Analysis Risk Response Planning Risk Monitoring & Control

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Qualitative Risk Analysis IMPACT PROBABILITY Very High High Moderate Low Very Low LowModerateHighVery High Probability / Impact Matrix

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Probability- 5 Level Scale LevelProbability of OccurrenceIntervention Difficulty 1 Very Low You would be surprised if this happened. Your normal management processes should easily ensure an acceptable outcome 2 Low Less likely to happen than not.Careful oversight of your normal management processes will probably bring about an acceptable outcome. 3 Medium Just as likely to happen as not.Additional time and effort will be required to move forward an acceptable outcome. 4 High More likely to happen than not.Your resources and authority are sufficient to permit only a minor effect on the outcome. 5 Very High You would be surprised if this did not happen. Your ability to affect the outcome is effectively zero.

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Impact – 5 Level Scale

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Management Processes Risk Identification Risk Analysis Risk Response Planning Risk Monitoring & Control

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Response Planning Identification of specific actions to minimize the occurrence of specific risks in a project

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Responding to Risks Avoidance Transference Mitigation Acceptance Transference?

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Response Strategies Avoidance: “ I do not accept this option because of the potentially unfavorable results…”

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Response Strategies Transference: “ I am aware of the risk and will transfer all or a portion of it to another party…”

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Response Strategies Mitigation (or control): “ I am aware of the risk, and I will do my best to minimize its occurrence and effect…”

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk Response Strategies Acceptance: “ I am aware of the risk, and I am willing to accept the consequences should they occur…”

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Other Risks Residual risks – those that remain after avoidance, transfer of mitigation or other minor risks that have been accepted and addressed. Secondary Risks – those that arise as a direct result of implementing a risk response.

Project Management Learning Program 19 – 30 April 2010, Mekong Institute, Khon Kaen, Thailand Risk ID PriorityDate Found Responsible Person DescriptionStrategyCurrent Status Risk Response Plan