risk management
DESCRIPTION
This was a presentation I put together based off of Rita Mulcahy's PMP Exam Prep 7th edition on Risk ManagementTRANSCRIPT
Risk Management
Prepared by Stephen Penn
October 6, 2012Information derived or quoted from Rita Mulcahy
5 Overall Project Management Processes with Risk Management
•Plan RM•ID Risk•Qualitative•Quantitative•Plan Risk Responses
•Monitor & Control Risks
•ID & Managed
Risk Management Process
Threats
Opportunities
Uncertainty Lack of knowledge
Risk Factors1. How likely a risk event will occur
2. Impact or amount at stake
3. When it will occur
4. How often it will occur
Risk Averse Some one that does not want to take on risk
Risk Tolerance Degree of risk acceptable
Risk Thresholds Point at which risk becomes unacceptable
Risk areas Project Constraints (scope, time, cost, etc)
Concepts and Terms
Plan Risk Management
•How much time should we spend?•Who will be involved?•How should we perform risk management?
“What will I have when I’m done with …?”
• Risk Management Plan1. Methodology
2. Roles & Responsibilities
3. Budgeting
4. Timing
5. Risk Categories
6. Definitions of probability & Impact
7. Stakeholder tolerances
8. Reporting & Tracking
Identify Risk(tools & techniques)
Documentation Reviews Documents can help identify risk
Brainstorming One idea generates another
Delphi Technique Experts participate anonymously
Interviewing Interview participants, stakeholders, experts
Root Cause Analysis Reorganized by root causes to find more risk
Identify Risk
SWOT Analysis Identifies strengths and weaknesses and thus risk
Checklist Analysis Checklist of risk categories to identify risk
Assumptions Analysis Validate assumptions which may lead to risk
Diagramming Techniques
Cause and effect diagrams and flowcharts
Outputs to Identify Risk
• Risk Register Example
Qualitative Risk Analysis
Perform Qualitative (Subjective) Risk Analysis
(Probability and Impact Matrix)
•Watchlist•Risk Grouped by category•Risk Register Updates
• Numerically analyzing the probability and impact of risks
• how risk could affect the objectives of the project
1. Determine risk that warrant a response2. Determine overall project risk3. Determine quantified probability to meet project
objectives (e.g. 75% chance)4. Determine cost and schedule reserves5. Identify risks requiring more attention6. Create realistic and achievable cost, schedule, or
scope targets.
Quantitative Risk Analysis
1. Investigate highest risks on the project
2. Determine type of probability distribution
3. Which risks have the most impact
4. Determine quantified risk through EMV or Monte Carlo
Determine Quantitative Probability Impact
• Interviewing•Cost & Time Estimating•Delphi Technique•Use of historical records
•Expert Judgment•EMV•Monte Carlo•Decision Trees
Decision Tree – choose between many alternatives
(Impact)
1. Prioritized list of quantified risk2. Amount of contingency time and cost reserves needed3. Realistic and achievable completion dates and project costs4. The qualified probability of meeting objectives5. Trends in quantitative risk analysis
Quantitative
“What are we going to do now about each top risk?”
1. Eliminate the threats before they happen2. Make sure opportunities happen 3. Decrease the probability and/or impact of threats4. Increase the probability and/or impact of opportunities• For Residual Threats
1. Contingency Plans2. Fallback Plans
Monitor and Control RiskWorkarounds Unplanned responses to
deal with problems
Risk Reassessments Review risk plan, risk register and update documentation
Risk AuditsPrepared by PM. Prove you have identified risk, have
plans for major risk, risk response owners are prepared.
Reserve Analysis How much reserve remains and how much is needed (checkbook)
Status Meetings Team meetings where risked is discussed
Closing of Risks Close finished risk to focus on remaining risk
Outputs of Monitor & Control Risk
1. Risk Register Updates
1. Outcomes of risk assessment and risk audits
2. Updates to risk management and ID of new risk
3. Closing of risk
4. Details of what happened
5. Lessons learned
2. Change Requests Monitor & Control process will uncover changes
3. PM Plan Updates Updates to schedule, cost, quality, hr, etc
4. Project Doc Updates Roles & Responsibilities, stakeholder management, quality metrics
5. Organization Process
Assets Updates
Risk templates like risk register, checklists, and other data which becomes historical records
Practice Exam
Practice Exam
Practice Exam
Answers
Answers
Answers
