1. Risk Management
Presented by You Exec

2. Table of Contents I II III IV Introduction Stakeholders Engagement
Types of Risk
Risk Categories
Risk Identification
Risk Appetite
Risk Tolerance
III IV
Risk Management Procedure
Tools & Practices
Risk Planning
Risk Identification
Risk Assessment
Risk Monitoring
Risk Tracking
Impact &Probability Analysis
Risk Mitigation Strategies
Qualitative Analysis
Quantitative Analysis

3. Introduction

4. Types of Risks Operational Strategic Hazard Financial Cost Overrun
Operational Controls
Capacity management
Supply Chain Issues
Employee Issues incl. fraud
Bribery and Corruption
Commodity prices
Demand Shortfall
Customer retention
Integration problems
Pricing pressure
Industry downturn
JV or partner losses
Types of Risks
Macroeconomic
Political Issues
Legal Issues
Terrorism
Natural disasters
Debt and interest rates
Financial management
Asset losses
Goodwill and amortization
Accounting problems
Hazard
Financial

5. Internal & External Risks
Internal Risks
Strategic
Operational
Enablers
Governance
Strategic Planning
Ethics & Values
Stakeholder Relations
Demand
Regulatory
Economical
Socio- Political
Environment
Access to Services
Processes
Business Interruption
Emergency Response
People
Financial
Technology
Infrastructure

6. Risk Categories Product Design System/ Software Manufacturing
All Other
Project Management
Quality
Product Performance
Data Accuracy
Assembly
Consumer service
Team work
Quality system
Design
Security
Tools
Environment
Product cost
Sigma Levels
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7. Identification of Risk Categories
Risk Category
Financial
Operational
Strategic
Risk Sub Category
Funding
Capacity
Availability
Customer Retention
Demand Shortfall
Likelihood 2 3 4 5
Risk level
Profitable Growth
Low Price
Develop New product
Leverage Technology
Risk Score by Risk Category

8. Risk Severity Dial Medium High Low
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Low
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High
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9. Stakeholders Engagement

10. Exceeding Risk Appetite
Low
Medium
High
Exceeding Risk Appetite
Impact
Within Risk Appetite
Obtain an estimate of the risk appetite of the shareholders with the help of the below bar graph. This will help in assessing the acceptable risk level
Low
Medium
High
Likelihood

11. Risk Tolerance Very Low Very High Low Moderate High 0.7 0.2 0.1 0.9
0.5
Cost
Schedule
Scope
Quality
Insignificant
increase
<10% cost increase
10- 20% cost increase
20- 25% cost increase
> 25% cost increase
Insignificant fall
in schedule
<7% schedule slippage
7-10% schedule slippage
10-15% schedule slippage
15-20% schedule slippage
Insignificant scope decrease
Minor areas of
scope affected
Major areas of
Reduction unacceptable
Project end item
is useless
Barely noticeable degradation
Only demanding applications are affected
Reduction requires approval
is unusable

12. Risk Tolerance Impact Likelihood Loss of key managers
Business continuity problems
Supplier default
IT problems
Product or service quality
Loss of key partnerships
Poor project management
Likelihood

13. Risk Management Procedure

14. Procedure for Managing Risks
Risk Planning
Risk Register
Risk Monitoring
Risk Tracking
Risk Assessment
Risk Identification

15. Likelihood of Detection Likelihood of Occurrence
Risk Assessment
Risk Rating Guide
Probability
Impact
Low
Med
High
Very High 1 3 5 R
Show stopper 15 25 O
Significant risk 9 Y
Proceed w/ caution G
No concern
High (5)
Medium (3)
Low (1)
Major uncertainties remain
No or little prior experience or data
Infrastructure and/or resources not in place
Some uncertainties remain
Some experience and data exist
Infrastructure in place but under-resourced
Few uncertainties remain
Significant experience and data exist
Infrastructure in place and fully
Performance, quality, cost or safety impacts resulting in major redesign and program delay
Performance, quality, cost and/or safety impacts resulting in minor redesign and schedule adjustment
Performance, quality, cost and safety requirements met within planned schedule
Risk Scoring System
Likelihood of Detection
Detectability is very high
Considerable warning of failure before occurrence
Some warning of failure before occurrence
Little warning of failure before occurrence
Detectability is effectively zero
Likelihood of Occurrence
Consequences
No. direct effect on operating service level
Minor deterioration in operating service level
Definite reduction in operating service level
Source deterioration in operating service level
Operating service level approaches zero
E. Probability of once in many years
D. Probability of once in many operating months
C. Probability of once in some operating weeks
B. Probability of weekly occurrence
A. Probability of daily occurrence

16. Risk Assessment (Cont.)
Consequences
Insignificant
Minor
Moderate
Major
Catastrophic 1 2 3 4 5
Likelihood
A. Almost Certain
B. Likely
C. Possible
D. Unlikely
E. Rare - - - - - - - - - - - - - - - - - - - - - - - - -
Extreme Risk
Immediate Action where senior management get involved
High Risk
Management responsibility
Should be specified
Moderate Risk
Managed by specific
responsible person
Low Risk
Managed by
routine process

17. Risk Response Strategy
Risk Register
Type of Risk
Description of Risk
Probability M L
Impact
Perf.
Cost
Time
Risk Response Strategy
Risk
Owner H
Design
Lack of acceptance by
investor of design proposals
50k-500k
Market observation, alternative
designing solutions
Investor
Delays and difficulties in obtaining opinions and permits
500k-2m
Earlier diagnosis of the situation in local authorities offices, organization of meetings preceding designing process
Conflict among designing
team members
Response of a team leader to all forms
of conflicts – mediation in a team
Designer Office
Overly optimistic assessment
of employee workload
Proposing for employees to work overtime or ordering of part of work to another designing team
Incorrect information from investors and lack of clear guidance
2m-5m
Application to investor for extension of time to complete a design due to additional circumstances
Time
Acceptance of unrealistic deadlines in contact
Employment of new employees or ordering part of work to another party during a contract
Budget
Underestimation of
design budget
Limiting scope of design to
necessary minimum.

18. Risk Management Plan Type of Risk Outcome
Existing risk treatment actions in place
Rating
Additional Resources
Target Date
Person Responsible
Proposed risk treatment actions to mitigate risk
Strategic risk
Performance Deterioration
Proper assessment of underlying strategies 2
Detailed understanding
of the market
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31/4/2018
John
Smith

19. Risk Identification Identify Risks Cost Time Resources Communication
Schedule overruns
Tasks omitted from Schedule
Opportunity to compress Schedule
Budget Exceeded
Unanticipated
Expenditure
Resources
Communication
Identify Risks
Team is under-resourced
Materials shortage
Machinery unavailable
Industrial Action
Skills gap
Poor communication (Stakeholder dissatisfaction)
Positive & timely communications (positive publicity)
Environmental
Scope
Bad weather results in re-work
Weather delays progress
Adverse effects occur
Environmental approvals not complied with
Scope creep
Scope poorly defined
Project changes poorly managed

20. How Long Can You Do Without? Impact of Doing Without?
Risk Identification
How Long Can You Do Without?
Impact of Doing Without?
Vulnerabilities?
Contingency in case
of a disaster?
Utilities
Equipment
(IT only)
Facility
Personnel
Transportation System
Vendors (Sourcing)
Raw Materials
5 days
After five days no way to schedule production or track orders
No UPS/ generator,
MD hardware, SPOF SME
Use paper reports for 5 days then go manual for as many members as possible
0 days
No production, potential for bankruptcy, IT non- existent
Metal building, flood zone,
poor maintenance, no perimeter security, door lock broken
Look for warehouse space, attempt to salvage
equipment and restart operation, file bankruptcy
Degraded operations,
low service levels
Too many SPOF
Best effort shifting of
available staff, temps
30 days before
new deliveries
None until on hard exhausted
Single supplier relationship
Search for alternatives supplier
30 days in
2 days out
No suppliers, No deliveries
Location, design of entrance
None
0 hours/power
0 hours/water
Extrusion shuts down, lines cleaned, waste collected and prepared for grinder, IT non-existent
Single power feed, no generator
or backup water supply
4 hours
No call center
Mercy of vendor
Being in-house

21. Step 2: Consider Likelihood Step 3: Calculation Risk
Risk Analysis – Complex
Description of Risk
Risk Analysis C L
Risk Rating
Control Measures
(Detail any existing Controls)
Risk Analysis (with additional controls)
Additional Control
(Detail additional to be implemented Controls)
Step 1: Consider
Step 2: Consider Likelihood
Step 3: Calculation Risk
Extreme
Critical
Major
Minor
Regulatory
Non compliance
Major non compliance
Warning
Minor non compliance
What is the consequence of the hazard occurring. Consider what is the most possible consequence with respect to work
Safety at work
Sickness
Casualty
First aid
Medical treatment
What is the likelihood of the hazard consequences occurring in Step1
Almost
Is expected to occur in most
Certain
Circumstances (once per year)
Likely
Will probably occur once (every 5 year)
Possible
Event might occur at some time (10years)
Unlikely/ Rare
Event expected to occur only in exceptional circumstances (20+ years)
Take Step 1 rating and select correct column
2. Take Step 2 rating and select correct row
3. Use the risk score where the two ratings cross on the matrix below.
H = High, S = Serious, M = Medium, L = Low
Min
Maj
Crit
Ext
Almost Certain
S(A4)
S(A3)
H(A2)
H(A1)
Likely
M(B4)
S(B3)
H(B2)
H(B1)
Possible
L(C4)
M(C3)
S(C2)
S(C1)
Unlikely Rare
L (D4)
M(D3)
M(D2)
S(D1)
Likelihood

22. Risk Analysis – Simplified
Likelihood of Risk Item Occurring
Impact to Project if Risk Item Does Occur
Priority (Likelihood * Impact)
Risk Items (Potential Future Problems
Derived from Brainstorming) 10
100 8 9 72 6 54 7 49 4 32 2 20
New operating system may be unstable
Communication problems over system issues
We may not have the right requirements
Requirements may change late in the cycle
Database software may arrive late
Key people might leave

23. Rare
Possible
Almost Certain
Medium Risk
High Risk
High Risk
Risk Matrix
Medium Risk
High Risk
Low Risk
Use the Risk Matrix during risk assessment to define the level of risk by considering the category of probability or likelihood against the category of consequence severity. This is a simple mechanism to increase visibility of risks and assist management decision making.
Low Risk
Low Risk
Medium Risk
Insignificant
Moderate
Significant

24. Risk Response Matrix Risk Event Response Contingency Plan Trigger
Who is responsible
Interface Problems
Mitigate: Test prototype
Work around until
help comes
Not solved within 24 hours
John
System Freezing
Reinstall OS
Still frozen after one hour
Louise
User Backlash
Mitigate: Test Demonstration
Increase Staff Support
Call from top management
Helen
Hardware Malfunctioning
Mitigate: Select Reliable Vendor
Transfer: Warranty
Order replacement
Equipment fails
Tom

25. Risk Tracker ID Description of Risk Impact Risk Response Risk Level
Risk Owner
Notes 1
Supplier Delay
Pushes Launch
Confirm delivery dates
by Phase 2
High
John
Add notes here 2
Factory Availability
Cost Overruns
Stakeholder trip to China
Dave 3
Steering Committee Unavailable
Delay Launch Marketing
Define Marketing
Plans in March
Low
Carey 4 5 6 7 8 9 10 11

26. Risk Item Tracking Risk Items Monthly Ranking Risk Resolution
Inadequate Planning
Poor Definition of Scope
Absence of leadership
Poor Cost Estimates
Poor time Estimates
Risk Items
Monthly Ranking
Risk Resolution
This Month
Last Month
# of Months 1 2 4 3 5
Working on revising the entire project plan
Holding meetings with project customer and sponsor to clarify scope
Just assigned a new project manager to lead the project after old one quit
Revisiting cost estimates
Revisiting schedule estimates

27. Tools & Practices

28. Tools & Practices Quantitative Analysis Impact & Probability Analysis
Qualitative Analysis
Risk Mitigation Strategies

29. Risk Impact & Probability Analysis
Cost
Time
Quality
Very Low
Very High
Low
Medium
High
Impact
Manageable by exchange against Internal budgets
Slight slippage against internal targets
Slight reduction in quality/scope, no overall impact
Require some additional funding from Institution
Slight slippage against key milestones or published targets
Failure to include certain ‘nice to have’ elements
Requires Significant additional funding from Institution
Delay affects key stakeholders – loss of confidence in the project
Significant elements of scope for functionality will be unavailable.
Requires Significant reallocation of Institutional funds (or borrowing)
Failure to meet key deadlines in relation to academic year or strategic plan
Failure to meet the needs of a large proportion of stakeholders
Increases threaten viability of project
Delay jeopardizes viability of project
Project outcomes effectively unusable

30. Risk Mitigation Strategies1
Technical Risks
Emphasize team support and avoid stand-alone project Structure
Increase project manager authority
Improve problem handling and communication
Increase the frequency of project monitoring 2
Cost Risks
Increase frequency of project monitoring
Improve communication, project goals understanding, and team support
Increase project manager authority 3
Schedule Risks
Increase the frequency of project monitoring
Select the most experienced project manager

31. Risk Mitigation Plan Client Management Identified Risk Server
Update client more frequently along the way with project progress
Perform periodical check on server status
Monitor any updates on popular web browser and / or bootstrap and make sure all UI design works as intended on updated web browsers or responsive bootstrap
Client Management
Identified Risk
Miscommunication with sponsor or client regarding project requirement and expectations
Server
Identified Risk
Server is down which causes project to be slightly delayed due to application not able to load
Technical
Identified Risk
Popular web browsers may get
an update that will discontinue support for features used in our development as we using responsive bootstrap.

32. Qualitative Risk Analysis
Impact 1 2 3 4 5
Probability
Negligible
Minor
Moderate
Significant
Severe
(81-100)%
Low
Risk
Moderate
High
Extreme Risk
(61-80)%
Minimum Risk
(41-60)%
(21-40)%
(1-20)%
Project Risk (Threat & Opportunity) Matrix: Any Risk with a probability of over 80% will be treated as a fact and will be addressed in the Project Management Plan and not in Risk management. Risk Threshold( which risks move forward) in the process and which one will be

33. Risk Title & Description
Quantitative Risk Analysis
Risk Title & Description
Resp.
Due Date
Cat.
Rating
Prob.
Impact
Total Score
Mitigation Actions
Contingency Plan
Cost Risk
Insufficient funds to support the bid
ABC
5/31
Cost
High
.80 4
3.20
Find a partner to help share costs
Borrow money from the bank or investor to fund the effort
Schedule Risk
Insufficient resources to finish work on time
BMC
6/1
Sched.
Low
.55
2.20
Borrow additional proposal staff from another division
Hire additional proposal staff or consultants
Risk Score = Probability * Impact
Risk Probability values are between
0.1 (Remote Chance) – 1.0 (Certain)
Risk Impact values are between
1 (insignificant) - 4 (Unable to meet objectives)
Risk Score values are between
1-4 (with 4 being the highest risk) or red, yellow, green, blue.