Risk ManagementBy Andriy Mudry

VP Delivery / CTO @ Team Technologies

“The major difference between a thing that might go wrong and a thing that cannot possibly go wrong is that when a thing that cannot possibly go wrong goes wrong it usually turns out to be impossible to get at or repair…”

Douglas Adams

Initiating Processes

Planning Processes

Executing Processes

Monitoring & Controlling Processes

Closing Processes

Project Integration Management

Project Scope Management

Project Time Management

Project Cost Management

Project Quality Management

Project Human Resource Management

Project Communication Management

Project Risk Management

Project Procurement Management

What is a risk ?

Uncertain Event or Condition

Always in the Future

Impact on project

ObjectivesHa s

Causes, Impact and Probability

Negative or Positive Outcome

What are the Benefits of the Risk Mgmt. ?

Risk Mgmt. Process

Plan Risk Management *Identify Risks

Perform Qualitative Risk AnalysisPerform Quantitative Risk Analysis

*Plan Risk Responses

Monitor & Control Risks

Plan Risk Mgmt.

Risk Breakdown Structure

Risk Sources

Platforms, environment of development and implementation, tools, security, performance

Technologies

• Government regulations, natural factors, competitors, industrial standards

External Environment

• Terms, Budget, Scope, Business area, Infrastructure, Working processes

Internal conditions (Project, Process):

• Client, Management, Team, Staffing, Professionalism and qualification

People | Communication

Categorize Cause & Impact

Impact Source Time Budget Quality Scope …

Technologies

External Environment

Internal conditions, Project, Process

+ + +

People, Communication+ +

…

Probability & Impact Matrix

Scale: 1… 3 | 1… 5 | 1… 10 | …

Probability & Impact MatrixScale: 1… 3 | 1… 5 | 1… 10 | …

Impact Definition MatrixCorrelates with:• Probability & Impact Matrix • Categorization of Sources and Influence

Impact Definition Matrix

Project Objective

Very Low5%

Low10%

Moderate20%

High40%

Very High80%

Cost Insignificant cost increase

<5% cost increase

5-10% cost increase

10-20% cost increase

>20% cost increase

ScheduleInsignificant schedule slippage

Schedule slippage <5%

Overall project slippage 5-10%

Overall project slippage 10-20%

Overall project schedule slips >20%

ScopeScope change barely noticeable

Minor areas of scope are affected

Major areas of scope are affected

Scope reduction unacceptable to the client

Project output is effectively useless

QualityQuality degradation barely noticeable

Only very demanding applications are affected

Quality reduction requires client approval

Quality reduction unacceptable to the client

Project output is effectively unusable

Give it a Try…

There is a web application – business analytics. Known technologies, DB, 23 main modules, DB architecture is very complex, DB performance is very critical with the strict acceptance criteria. Requirement are 50% defined, very low chances for requirements to be changed, but they should be very clear before the realization. Now is August, release is on April 1. Client wants to have full transparency on progress. There couldn’t be delay with the delivery of the whole scope, it is more important than budget. Test environment is on client’s side, very big load on the network connection (more than the channel is now). Client is very qualified in business area, will be doing UAT. Main expert on the client’s side is Jar Jar Binks. Project team should be 15 people, 5 are missing, they will be not used after project completion. DB architect works on another project 60-70%. Client’s expert Jar Jar Binks hardly uses email and has strong non-English accent.

Give it a Try…

Challenge:

1. Categorization of Sources and Influence (Matrix)2. Matrix of Probability and Impact3. NB! Matrix of Influence Definition4. Roles and responsibilities. Plan of activities in risks

management.5. Tolerance and watchlist, reserves.

6. Present

Identify Risks

Risk Registry

ID Risk Impact Probability Impact Risk Value Notes

1

Application response will be

worse than expected

according to the acceptance

criteria

Architecture redesign – 3 weeks

2Specifications

aren’t confirmed by client

Corresponding time delay, budget

increase

3 … …

Risk Registry

• ID• Description• Impact• Likelihood• Impact• Score • Status

• Type (risk | opportunity)• Responsible person• Response strategy• Comments (history)

• I use it to track all the action and comments to see the track record of what was going on with this risk

Keep up giving it a try …

• Identify 10 Risks

•Create Risk Register.

Qualitative Risk Analysis

Likelihood | Impact | Score

Current Risks & Watchlist

Additional properties

Qualitative Risk Analysis

ID Risk ImpactProbabilit

y Impact Risk Value Notes

1

Application response will be worse than

expected according to the acceptance criteria

Architecture redesign – 3

weeks3 5 15

2 Specifications aren’t confirmed by client

Corresponding time delay,

budget increase2 1 2

3 … …

Current Risks

Watchlist

Quantitive Risk Analysis

Plan Risk Responses

Negative• Avoid• Transfer• Mitigate

Positive• Exploit• Share• Enhance

Plan Risk Responses

Plan Risk Responses: Likelihood & Impact Matrix

Monitor & Control Risks

Planning

Identification

Analysis

Response Monitor & Control Risks

Project Start

Project EndProject PlanChange RequestsRisk RegistryProject Documentation

Risk Management Rules

Make Risk Management Part of Your Project Identify Risks Early in Your ProjectCommunicate About RisksConsider Both Threats and OpportunitiesClarify Ownership IssuesPrioritize RisksAnalyze RisksPlan and Implement Risk ResponsesRegister Project RisksTrack Risks and Associated Tasks

Questions ?

“Questions are never indiscreet, Answers sometimes are.”

Oscar Wilde