pmp risk management
TRANSCRIPT
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PMP Preparation
PROJECT RISK MANAGEMENT
Waleed El-Naggar, MBA, PMP
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The processes of conducting risk management
planning, identification, analysis, response
planning and monitoring and control on a project
Objectives are to increase the probability and
impact of positive events and decrease the
probability and impact of negative events In the
project
Project Risk Management
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Mapping the Processes
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Initia
tionPlanning Executing Controlling Closing
11. Risk 11.1 Plan Risk
Management
11.2 Identify Risks
11.3 Perform Qualitative
Risk Analysis
11.4 Perform
Quantitative Risk
Analysis
11.5 Plan Risk Response
11.6 Monitor and
Control Risk
PM
Knowledge Area
Process
Group
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The process of defining how to conduct risk
management activities for a project
Important to provide sufficient resources and
time for risk management activities, and to
establish an agreed upon basis for evaluating
risk.
11.1 Plan Risk Management
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Plan Risk Management
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Project Scope Statement
Cost Management Plan
Schedule Management Plan
Communication Management Plan
Enterprise Environmental Factors
Organizational Process Assets
Plan Risk Management: Inputs
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Planning Meetings and Analysis
Project teams meet with stakeholders
High level plans for risk management are
define in these meetings
Plan Risk Management: Tools & Techniques
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Risk Management Plan
Methodology
Roles and Responsibilities
Budgeting
Timing
Risk Categories
Plan Risk Management: Outputs
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Risk Categories
Risk Breakdown Structure
Plan Risk Management: Outputs
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Definition of Risk Probability and Impact
Plan Risk Management: Outputs
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Probability and Impact matrix
Revised Stakeholders' Tolerance
Reporting Formats
Tracking
Plan Risk Management: Outputs
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Q: “ An uncommon state of nature, characterized by the
absence of any information related to a desired
outcome” , is a common definition for:
A. An act of God
B. An amount at stake
C. Uncertainty
D. Risk aversion
Answer C
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Identify Risks is the process of determining
which risks may affect the project and
documenting their characteristics
11.2 Identify Risks
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1. Risk Management Plan
2. Activity Cost Estimates
3. Activity Duration Estimation
4. Scope Baseline
5. Stakeholder Register
6. Cost management Plan
Identify Risks: Inputs
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7. Schedule Management Plan
8. Quality Management Plan
9. Project Documents
10. Enterprise Environmental Factors
11. Organizational Process Assets
Identify Risks: Inputs (contd.)
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Documentation Reviews
Information Gathering Techniques
Brainstorming
Delphi Technique
Interviewing
Root Cause Analysis
Checklist Analysis
Identify Risks: Tools & Techniques
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Assumptions Analysis
Diagramming Techniques
Cause-and-effect diagrams
System or process flow charts
Influence diagrams
SWOT Analysis (Strength, Weakness, Opportunities,
Threats)
Expert Judgment
Identify Risks: Tools & Techniques (contd.)
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Risk Register
List of identified risks
List of potential responses
Identify Risks: Outputs
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Q: Risk tolerances are determined in order to help:
A. The team rank the project risks
B. The project manager estimate the project
C. The team schedule the project
D. Management know how other managers will act
to the project
Answer A
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The process of prioritizing risks for further
analysis or action by assessing and combining
their probability of occurrence and impact
11.3 Perform Qualitative Risk Analysis
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Risk Register
Risk Management Plan
Project Scope Statement
Organizational Process Assets
Perform Qualitative Risk Analysis: Inputs
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Probability and Impact Matrix
Perform Qualitative Risk Analysis: Tools & Techniques
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Risk Probability and Impact Assessment
Risk Data Quality Assessment
Risk Categorization
Risk Urgency Assessment
Expert Judgment
Perform Qualitative Risk Analysis: Tools & Techniques
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Risk Register Updates
Relative ranking or priority list of project risks
Risks grouped by categories
Causes of risk or project areas requiring particular attention
List of risks requiring response in the near-term
List of risks for additional analysis and response
Watch lists of low-priority risks
Trends in qualitative risk analysis results
Perform Qualitative Risk Analysis: Outputs
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The process of numerically analyzing the effect of identified risks on overall project objectives.
Quantitative analysis is performed on risks that have been prioritized by the qualitative risk analysis process as potentially and substantially impacting the project's competing demands.
11.4 Perform Quantitative Risk Analysis
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Risk Register
Risk Management Plan
Cost Management Plan
Schedule Management Plan
Organizational Process Assets
Perform Quantitative Risk Analysis:
Inputs
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Data Gathering and Representation Techniques
Interviewing
Perform Quantitative Risk Analysis: Tools & Techniques
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Probability Distribution
Perform Quantitative Risk Analysis: Tools & Techniques
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Quantitative Risk Analysis and Modeling
Techniques
Sensitivity analysis
Expected monetary value analysis
Perform Quantitative Risk Analysis:
Tools & Techniques
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Sample Sensitivity Analysis
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Expected monetary value analysis :
Example Decision tree diagram
Perform Quantitative Risk Analysis: Tools & Techniques
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Modeling And Simulation
Cost/Risk simulation results
Expert Judgment
Perform Quantitative Risk Analysis: Tools & Techniques
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Risk Register Updates
Probabilistic analysis of the project
Probability of achieving cost and time objectives
Prioritized list of quantified risks
Trends in quantitative risk analysis results
Perform Quantitative Risk Analysis: Outputs
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Q: If a project has a 60% chance of a US $ 100,000 profit and a 40% chance of a US $ 100,000 loss, the expected monetary value for the project is :
A. $ 100,000 profit
B. $ 60,000 loss
C. $ 20,000 profit
D. $ 40,000 loss
Answer C
Quiz
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The process of developing options and actions to enhance opportunities and to reduce threats to project objectives.
11.5 Plan Risk Responses
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Risk Register
Risk Management Plan
Plan Risk Responses: Inputs
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1. Strategies for negative risks or threats
Avoid
Transfer
Mitigate
Accept
Plan Risk Responses: Tools & Techniques
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Response Strategies for Threats Avoidance:
Risk prevention
Changing the plan to eliminate a risk by avoiding the cause/source of risk
Protect project from impact of risk
Examples:
Change the implementation strategy
Do it ourselves (do not subcontract)
Reduce scope to avoid high risk deliverables
Adopt a familiar technology or product
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Response Strategies for Threats Mitigation
Seeks to reduce the impact or probability of the risk event to an acceptable threshold
Be proactive: Take early actions to reduce impact/probability and don’t wait until the risk hits your project
Examples:
Staging - More testing - Prototype
Redundancy planning
Use more qualified resources
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Response Strategies for Threats Transfer
Shift responsibility of risk consequence to another party
Does NOT eliminate risk
Most effective in dealing with financial exposure
Examples:
Buy/subcontract: move liabilities
Selecting type of Procurement contracts: Fixed Price
Insurance: liabilities + bonds + Warranties
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Acceptance
Used when project plan cannot be changed & other risk response strategy cannot be used
Active Acceptance
Develop a contingency plan to execute if the risk occur
Contingency plan = be ready with Plan B
Passive Acceptance
Deal with the risks as they occur = No Plan B prepared
Contingency allowance/ reserve
Established amount of reserve (e.g.: time and/or money) to account for the identified known risks.
Amount is decided based on probability and impact
Response Strategies for Threats
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Strategies for Positive Risks or Opportunities
Exploit: Ensure opportunity is realized
Ex: Assigning organization most talented resources to the project to reduce cost lower than originally planned.
Share: Allocating some or all of the ownership to third part best able to capture the opportunity
Ex: Joint ventures, special-purpose companies
Enhance: Increase the probability and/or the positive impact of the opportunity
Ex: Adding more resources to finish early
Accept: Welling to take advantage of opportunity if it comes, but not actively pursuing it.
Plan Risk Responses: Tools & Techniques
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Contingent Response Strategies
Expert Judgment
Plan Risk Responses: Tools &
Techniques
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Risk Register Updates
Risk-Related Contract Decisions
Project management Plan Updates
Project Documents Updates
Assumptions log updates
Technical documentation updates
Plan Risk Responses: Outputs
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Q: Purchasing insurance is BEST considered
an example of risk:
A. Mitigation
B. Transference
C. Acceptance
D. Avoidance
Answer B
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The process of implementing risk response plans,
tracking identified risks, monitoring residual
risks, identifying new risks, and evaluating risk
process effectiveness throughout the project.
Monitor and Control Risks
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Risk Register
Project Management Plan
Work Performance Information
Performance Reports
Monitor and Control Risks: Inputs
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Risk Assessment
Risk audits
Variance and Trend Analysis
Technical Performance Measurement
Reserve Analysis
Status Meetings
Monitor and Control Risks: Tools &
Techniques
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Risk Register Updates
Organizational Process Updates
Change Requests
Recommended corrective actions
Recommended preventive actions
Project management Plan Updates
Project Document Updates
Monitor and Control Risks: Outputs
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Q: What should be done with a non- critical
Risk?
A. Document them for historical use on other
projects
B. Document them and revisit during project
execution
C. Document them and set them aside because
they are already covered in your contingency
plans
D. Document them and give them to the customer
Answer B
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Thank you
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