PROJECT RISK MANAGEMENT

Concept Narrative

If you need a quick PMBOK review: "Fun at the Grand Canyon“

2007 Risk Study – Meeting in Toronto

Post Mortem Product Launch

Biopharmaceutical Global Project Manager Group

“Project Acceleration”

Topline Risks?

Launch Phase/People

Focused on peripheral / anticipated obstacles (time spent on the wrong things)

Complaints about resources, especially time

Failure to self-navigate

Require close oversight, or don’t know what to do

Don’t ask questions

Permit distractions

Status report delays

Blame outside factors for progress delays

Quantity over Quality (e.g., “time spent” vs deliverable acceptability)

Risk is Everywhere

PRM planning process is used to generate the risk management plan, which becomes an input item to all the other processes of risk management.

Risk identification process identifies the risks and records them in the risk register , which becomes an input to all other risk management processes (except the RM planning process, of course! It comes first.)

The Tricky Part

Depending on the experience of the team and the nature of the risk, a risk, once identified, can be moved directly into the quantitative risk analysis --- or sometimes, to risk response planning.

Understand

PRM has two objectives:

1) Increase the probability and impact of positive risks

2) Decrease the probability and impact of negative risks

Understand

Risk categorization is a part of the risk management plan, and it helps in the risk identification process.

Defining the risk probability and risk impact are parts of the risk management plan, and are used in the qualitative risk analysis and in prioritizing risks.

Understand- Qualitative RA

The objective of conducting a qualitative risk analysis is to acquire safety against recognized risks and to increase the alertness of management, team members, and all personnel who are vulnerable to them. This method of risk analysis is designed to identify issues that are looked upon as project management impediments, but have the potential to become definite risk factors.

A detailed qualitative analysis will also delve into the resources which are more susceptible to such risks. The purpose is to identify rectifying measures that can incorporated to restrict or remove the causes that have given rise to such risks, and to ensure that these safety measures become a part of risk-related analytical protocol for future reference.

from Bright Hub PM

Understanding Quantitative Risk Analysis

Quantitative risk analysis is more focused on the implementation of safety measures that have been established in order to protect against every defined risk.

By using a quantitative approach, an organization is able to create a very precise analytical interpretation that can clearly represent which risk-resolving measures have been most well-suited to various project needs.

This makes the quantitative approach favored by many management teams since risk assessments can be clearly represented in the empirical forms like percentages or probability charts, since it emphasizes using tools and metrics.

Using Software Helps

Computerized Risk Management — Risk analysis methodology is increasingly becoming computerized. This means using either the qualitative or quantitative approach or a combination of both in the form of various software applications.

Understand

Risk identification is performed before the risk analysis; the qualitative risk analysis, if performed, is performed before quantitative risk analysis because…. Why?

…it takes less effort and time - and its results can be used for quantitative risk analysis.

Understand

Qualitative risk analysis results in the prioritized list of risks that go into the risk register.

Each objective of the project may need its own prioritized list of risks.

Two more key updates added to the risk register by the quantitative risk analysis are…

1) probabilistic analysis of objectives – will they support the overall project objectives?

2) The prioritized list of risk to the overall project objectives.

Be Careful

Risk stems from elements of uncertainty, and can have a positive as well as negative impact on the project. Example?

Downward change of interest rates…getting, not three, but six investors in the project post launch based on strong progress/performance…great weather for a boat race… etc.

Understand

Risk register is updated by all risk management processes …except the RM planning process when the register doesn’t exist. (It’s the risk identification process that generates the risk register.)

Memorize for CAPM

Risk register is initially prepared during the risk identification process and is updated during the following processes:

- Qualitative RM

- Quantitative RM

- Risk response planning

- Risk monitoring and control

Memorize for CAPM

The risk register becomes a part of the project management plan.

The only output of risk management planning is the risk management plan.

Project scope statement is an input item to all the risk management processes except risk response planning (which refers to the risk themselves) and risk monitoring and controlling (ditto).

CAPM Exam Simulations

http://www.pmpden.com/pmbok-5-exam-questions-free/pmp-exam-questions-9-project-risk-management/