CB 715-M
Risk Management in
Construction
▪ Implement Risk Responses;
▪ Monitor Risks.
Dr. Eng. Ahmed Eldeep
Ph.D., PMP®, PMI-RMP®, SFC, 6σ
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 1
Recap How Do we Manage Risks in the project?
1) Plan Risk management;
2) Identify Risks;
3) Perform Qualitative Risk Analysis; Planning
4) Perform Quantitative Risk Analysis;
5) Plan Risk Responses;
6) Implement Risk Responses; Executing
7) Monitor Risks.
Monitor and Control
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 2
Project Risk Management
Implement Risk Responses
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 3
Implement Risk
Responses
• The process of implementing agreed-upon risk response plans.
• The key benefit of this process is that it ensures that agreed-upon
risk responses are executed as planned.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 4
Unplanned Response
Workaround – Unidentified Risks
• Unknown-Unknown risks and
passively accepted risks that
materialize will be dealt with through
the use of Workaround.
• More workaround in a project means,
Risk identification process is not done
properly.
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Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 5
Implement Risk Responses
Change Requests (Output)
To the cost and schedule baselines or other components of the project management
plan.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 6
Implement Risk Responses
Project Document Update (Output)
▪ Risk Report
Example Project
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 7
Project Risk Management
Monitor Risks
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 8
Purpose and
Objectives of
• The primary objectives of risk monitoring and controlling are to track
Monitor Risks
Process
identified risks, monitor residual risks, identify new risks, ensure
that risk response plans are executed at the appropriate time, and
evaluate their effectiveness throughout the project life cycle.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 9
Critical Success Continuously Monitor Risk Trigger Conditions
Factors for
Monitor Risks • Checking for specifically defined risks that may trigger conditional
Process
responses is the responsibility of the risk action owner, in close
collaboration with the risk owner under the overall authority of the
project manager.
Maintain Risk Awareness
• Risk management reports should be a regular item on every status
meeting agenda to ensure that all team members remain aware of
the importance of risk management and to ensure that it is fully
integrated into all of the project management decisions.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 10
Evaluate and Manage Risk
• Is the process of monitoring the implementing
risk response plans, tracking identified
risks, monitoring residual risks,
identifying new risks, and evaluating risk
process effectiveness throughout the
project.
• The key benefit of this process is that
enables project decisions to be based on
current information about overall project risk
exposure and individual project risks.
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Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 11
Monitor Risks
and their GUIDELINES QUESTIONS TO ASK
triggers • Enable decision-making based on • Are project assumptions still
current information about overall valid?
risk exposure and individual risks
• Have risks changed or been
• Continuously monitor status, retired?
probability and impact
• Are risk management policies
• Identify new risks and procedures being followed?
• Reassess current risks • Have contingency reserves been
modified?
• Close outdated risks
• Do we need a risk audit?
• Perform on a regular basis
• Continuously improve risk
effectiveness
Update the Contingency Reserve
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 12
Tracking
Risk
Risks Risk Item
Probability /
Management
Critical Current
Impact Date Status
strategy
Inadequate Medium Accept This week Currently not
• Tracking identified Technical an issue
risks; training
Staff High Transfer This week 3 Key staff
• Continuously monitor
availability not available
status. Material High Transfer This Month Continue to
Availability review
Design High Mitigate Next month Continue to
acceptance review
Material Medium Mitigate 2 months Continue to
delivery review
Site Safety Medium Accept 3 months
training
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 13
Review your
Reserves RESERVE ANALYSIS
A method used to evaluate the amount of risk on the project and the amount
of schedule and budget reserve to determine whether the reserve is sufficient
for the remaining risk.
Managing
Contingency
Reserves Reserve analysis:
Reserves may have been allocated separately to cover time-related and cost-
related risks
• Establishes the amount of contingency and management reserves needed
• Is performed throughout the project
• Compares amount remaining to determine if adequate
• May be communicated with a burndown chart
WAIT CHECK YOUR BALANCE AMOUNT, ONCE RISKS OCCUR
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 14
Monitor Risks
Risk Audit
The project manager is responsible for ensuring that risk audits are performed at an
appropriate frequency, as defined in the project’s risk management plan.
Meeting
Periodically review risk management plan and risk register and adjust them as required.
Risk reviews may also result in identification of new individual project risks, reassessment
of current risks, the closing of risks that are outdated.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 15
Monitor Risks
Risk Reassessment vs. Risk Audit
Risk Reassessment Risk Audit
Revisit your risk register, add new Ensure effectiveness of all your risk
risks, close risks, re-examine current management activities.
risks.
Focus on individual risks. Focus on Risk responses and overall
risk management
Plan do check Act Evaluate risk response and risk
management effectiveness.
looks forward in time. looks back in time.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 16
Monitor Risks
What happens when risks do not occur?
➢ After a probable risk that may have been identified has not occurred at a point where it was expected it might, the
money in the contingency reserves for those risks is no longer needed. What do you do with those funds?
➢ There are two possibilities, either a) keep the funds in the contingency reserves, or b) remove them from the
project budget entirely. If you keep the funds in the contingency reserves, the cost performance on the project will
improve, because those funds will not be used.
➢ But whereas this may improve the CPI for the project you are working on, remember that the funds in the
contingency reserves are unused resources, which could be used on another project. So as a project manager, you
might be happy that your CPI goes up on your project, but a program manager or a sponsor has to look at all of the
projects of a company as a whole, and would prefer not to waste resources where they are not needed.
➢ So contingency reserves that are not used can be used to adjust the project budget going forward.
What happens when new risk are uncovered?
➢ As a project goes forward, new risks may be identified which were not identified at the beginning of the project in
the risk register. If new risks are identified, then risk responses must be developed, and the funds for these
responses must be added to the contingency reserves.
So whether the number of risks decreases or increases, they will affect the budget through the contingency
reserves, and that is why the technique of reserve analysis becomes a tool of cost management in this
monitoring & controlling process.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 17
Monitor Risks
Work Performance Information (Output)
Information indicates the effectiveness of the response planning and
response implementation processes.
Change Requests (Output)
To Cost or Schedule Baselines
Project Management Plan Updates (Output)
Project Documents Updates (Output)
Organizational Process Assets Updates (Output)
1. Risk Breakdown Structure
2. Templates for the risk management plan, risk register, and risk report;
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 18
Monitor Risks
Documenting the Results of the Monitor and Control Risks Process
The final control action of risk monitoring and controlling is to record actual data for future use. This
includes all of the relevant information relating to risk management from start to finish of the project.
Typical information includes the following:
• For each identified risk or type of risk, whether it occurred, and, if so, when and how often. All relevant
data should be recorded: impact, effectiveness of detection and of response, and any unplanned,
additional actions that were carried out.
• Effectiveness of avoidance or exploitation actions.
• Effectiveness of transfer and sharing actions.
• Unexpected or undocumented risks which occurred and data about them.
• Effectiveness of risk mitigation and enhancement actions.
• Occurrence of accepted threats or opportunities.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 19
Topics Covered
1) Plan Risk management;
2) Identify Risks;
3) Perform Qualitative Risk Analysis;
4) Perform Quantitative Risk Analysis;
5) Plan Risk Responses;
6) Implement Risk Responses;
7) Monitor Risks.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 20
Any Question..
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 21
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 22
1. As the project work is executed, an issue emerges as a result of a risk that had gone
undetected. What type of response should the risk management team implement?
A. Secondary Plan.
B. Contingency plan.
C. Fallback plan.
D. Workaround.
2. As part of conducting risk monitoring and control activities, what should be done with the
watch list?
A. The risks should be numerically analyzed.
B. The risks should be monitored for a change in status.
C. A response should be developed for each risk.
D. Nothing, unless one of the risks becomes an issue.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 23
3. The project management team is in the process of monitoring risks. Of the 70 risks
identified, half received an immediate response and 10 have been realized. What should the
project management team do to ensure that enough funds remain to deal with the remaining
risks, should they occur?
A. Implement a workaround.
B. Conduct a risk audit.
C. Perform variance and trend analysis.
D. Perform reserve analysis.
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 24
End of the Course
Wish You All the Best
Dr. Ahmed Eldeep, Ph.D., PMP ®, PMI-RMP® Implement Risk Responses l Monitor Risks 25