Welcome to
Project Management Fundamentals
Module 9
Objectives
•Project Risk and Project Quality
•How to identify risks for your project?
•What to do about those risks?
The following content was prepared by Dr. David McKenna and reproduced from Kerzner, H. (2017).
Project management: A systems approach to planning, scheduling, and controlling, Twelfth Edition,
John Wiley & Sons, Inc., Hoboken, New Jersey.
and Project Management Institute. (2017). A guide to the project management body of knowledge
(PMBOK guide). Newtown Square, Pa: Project Management Institute.
Do projects ever go wrong?
Do projects ever go wrong?
Do projects ever go wrong?
Do projects ever go wrong?
• Have I ever had a project fail?
• Have you ever had a project fail?
Do projects fail due to NOT
managing risk?
What went wrong here? – 10
mins
Project Risks
Risk Mgmt
The Risk Process
• Plan risk management
• Identify risk
• Perform qualitative and quantitative risk analysis
• Plan risk response
• Implement Risk Responses
• Monitor Risks
What do you need before you
can effectively begin risk
management?
• You must have a project management process
• Background information on the project
• Project Charter
• Project Plan
What do you need before you
can effectively begin risk
management?
• Lessons learned:
• What risks did past, similar projects experience
• Where can this be found in your organization?
Another question for you
• What inputs do you use for your risk management
plan ?
• Are they from the real world?
• How will you go about getting them (or creating
them)?
Identify Risks
• You find your risks from people
• Your list will be hundreds of risks (and some
opportunities)
• Use the cause-risk-effect format
• Absolutely understand your risks
Identify Risks
• Creating the “risk list” includes:
• The trigger (and timing)
• Your response
Cause-risk-effect format
• Due to the project managers inexperience with virtual
teams……
• Work may take longer then scheduled…..
• Which may lead to missed milestones.
Cause-risk-effect format
• The team is not able to maintain a good relationship
with the customer……
• Causing a lack of trust with the customer…..
• Which may require additional meetings and extra
hand holding.
Pad board 10 Risks for Your
Project – 15 mins
Be prepared to present
Project Risks
Risks
• Risks that are identified are less likely to occur simply
because they have changed from the unknown to
known – you have just decreased the overall risk of
your project
Let’s go find those risks
• WBS (high, medium, low level)
• Critical path and near critical path analysis
• Use a prompt list
• Historical records
• Brainstorming
• Expert interviews
• Cause and effect diagrams, affinity diagram, Delphi
technique
Let’s go find those risks
• Get your team, customer, stakeholders, anyone who
may have worked on a similar project into a room
together
• Facilitated brainstorming session
Prompt List
• Technical
• Quality
• Performance
• Project management
• External risks
• Culture
• Contracts, vendors and suppliers
• Change
• Scope
• Resources
• And whatever other categories your team comes up with
Create a Prompt List – 15
mins
Add a worksheet titled “Risk Prompt List” and create a
list for your project
Be prepared to present
Prompt List
Let’s go find those risks
• Use a prompt list
• Cause and effect diagrams
Cause and Effect Diagrams
Cause: Risk: Effect:
Vendor
Risk or Fact
• You have to decide when a risk becomes a fact and is
then included in the scope of the project.
• i.e. > 80% likely to occur
List all of the Risks to Your
Project – 30 mins
Using the Risk Registry file then transfer into the PMP
file
Risk Response
• Avoid (change the design)
• Mitigate (or control)
• Transfer
• Accept (may create a contingency plan)
Avoid
• This is a change in concept:
• Change to the design (Project Plan), the requirements
the plan
• Change from a high risk to a lower risk
Mitigate
• Reduce the likelihood
• Or
• Reduce the impact
Transfer
• Hand off to another party (vendor)
• Give to the experts
• The risk is not gone – just moved
Accept
• For risks that are very unlikely to happen
• Use a reserve (%)
• Create a contingency or accept the cost/schedule
overruns
Probability and Impact
Assessment
• At any given time there are 8K to 13K planes in the
sky
Probability and Impact
Assessment
• Reduce the probability of a plane failing
• Pilots are professionals
• Airplanes can fly safely to their destination if one engine fails
• Back up, back up, back up
• Most commercial planes today can land in 0/0 visibility
Contingency Plan
• Alternative plan (with clearly documented actions)
• Goes into effect once the risk is happening
• If you have no plan – you don’t know where to go,
what to start doing, who is doing what……
Risk Response – 20 mins
For your top 12 risks:
List your probability and impact
Trigger
Owner
Response
Project
Quality
Cost of Quality (COQ)
For Next Week
Read:
• Kerzner Chapter 17 and 20
• PMBOK Chapter 8 and11
Questions