CHAPTER THREE
IDENTIFY PROJECT RISK
Outline:
1. Importance of Risk Identification
2. Inputs of Risk identification
3. Techniques and tools of risk
identification
4. Outputs of risk identification
Importance of
Risk
Identification
• It helps you understand what could go
wrong and how you might be able to
prevent it.
• It allows you to put together a plan for
dealing with any potential risks that
might arise.
• It helps you make better decisions when
it comes to your business.
• Identify Risks is the process of identifying individual project risks as
well as sources of overall project risk, and documenting their
[Link] Risks characteristics.
• The key benefit of this process is the documentation of existing
individual project risks and the sources of overall project risk. So the
project team can respond appropriately to identified risks.
• Key Participants in risk identification activities may include the
following: project manager, project team members, project risk
specialist(if assigned), customers, subject matter experts from
outside the project team, end users, other project managers,
operations managers, and risk management experts within the
organization.
• While these personnel are often key participants for risk
identification, all project stakeholders should be encouraged to
identify individual project risks.
• It is particularly important to involve the project team so
they can develop and maintain a sense of ownership and
responsibility for identified individual project risks, the level
[Link] Risks of overall project risk, and associated risk response actions.
• When describing and recording individual project risks, a
consistent format should be used for risk statements to
ensure that each risk is understood clearly and
unambiguously in order to support effective analysis and
risk response development.
• Identify Risks is an iterative process, since new individual
project risks may emerge as the project progresses through
its life cycle and the level of overall project risk will also
change.
• This process has to be performed throughout the project
life cycle.
Project management plan component include
Identify Risks:
Inputs • Requirements management plan :a document that defines how
requirements will be collected ,analyzed and documented and
managed and tracked through out the project cycle.
• Schedule management plan: The schedule management plan may
i-Project identify areas that are subject to uncertainty or ambiguity
Management • Cost management Plan. The cost management plan may identify
areas that are subject to uncertainty or ambiguity.
Plan • Quality management plan. The quality management plan may identify
areas that are subject to uncertainty or ambiguity, or where key
assumptions have been made that might give rise to risk.
• Resource management plan. The resource management plan may
identify areas that are subject to uncertainty or ambiguity, or where
key assumptions have been made that might give rise to risk.
• Risk management plan: The risk management plan provides
Identify Risks: information on risk-related roles and responsibilities, indicates
how risk management activities are included in the budget and
Inputs schedule, and describes categories of risk, which may be expressed
as a risk breakdown structure.
• Scope Baseline :The scope baseline includes deliverables and
criteria for their acceptance, some of which might give rise to risk.
Project
Management • Schedule Baseline : The schedule baseline may be reviewed to
identify milestones and deliverable due dates that are subject to
Plan uncertainty or ambiguity, or where key assumptions have been
made that might give rise to risk.
• Cost Baseline: The cost baseline may be reviewed to identify costs
or funding requirements that are subject to uncertainty or
ambiguity, or where key assumptions have been made that might
give rise to risk
• Assumption log: Assumptions and constraints recorded in the
Identify Risks: assumption log may give rise to individual project risks and may also
Inputs influence the level of overall project risk.
• Name and description
• Category
• Owner or person responsible
• Date first logged
ii. Project • Due date
Documents • Rating for the uncertainty (high/medium/low)
• Cost Estimates :Cost estimates provide quantitative assessments of
project costs, ideally expressed as a range, indicating the degree of risk,
where a structured review of the documents may indicate that the
current estimate is insufficient and poses a risk to the project.
Identify Risks: • Duration Estimates:
Inputs
• Duration estimates provide quantitative assessments
of project durations, ideally expressed as a range,
indicating the degree of risk, where a structured review
of the documents may indicate that the current
ii. Project estimate is insufficient and poses a risk to the project.
Documents
•
Identify Risks: Inputs Elements of an Issue Log
• Issue ID: This is a unique identifier for each issue, which
makes it easy to reference.
ii. Project Documents…. • Date Logged: The date the issue was reported is useful for
tracking how long it takes to resolve.
• Issue Log?
• An issue log is a tool for documenting and tracking • Description: This is a clear, concise summary of the issue
problems that arise during a project. It records each issue so all team members can understand it.
in detail, including its description, who reported it, its
priority, and the steps needed to resolve it. • Priority Level: This assesses the issue’s urgency (e.g.,
high, medium, or low) to help you prioritize resources.
• By organizing issues in one place, the issue log helps you • Assigned To: This is the name of the person responsible
monitor each problem’s progress, prioritize urgent issues, for resolving the issue.
and allocate resources effectively.
• Status: This is the current progress (e.g., “Open,” “In
• The issue log is necessary for maintaining clear Progress,” or “Closed”), which indicates where the issue
communication among stakeholders. Everyone involved can stands.
see the status of current issues, making it easier to stay • Due Date: This is the target date by which the issue
aligned and avoid misunderstandings. • should be resolved, which can help ensure timely action.
• Resolution: Notes on how the issue was resolved or any
• Using an issue log also helps you identify patterns and final actions taken are useful for future reference.
recurring problems, allowing them to take preventive
actions in future projects.
• Lessons Learned Register : Lessons learned about risk identified from
Identify Risks: earlier phases of the project are reviewed to determine whether similar
risks might recur during the remainder of the project.
Inputs
• Requirements Documentation: Requirements documentation lists the
project requirements and allows the team to identify those that could be
at risk.
• Resource Requirements: Resource requirements provide quantitative
ii. Project assessments of project resource requirements, ideally expressed as a
Documents range, indicating the degree of risk, where a structured review of the
documents may indicate that the current estimate is insufficient and
poses a risk to the project.
• Stakeholder Register: The stakeholder register indicates which
individuals or groups might participate in identifying risks to the project.
It also details those individuals who are available to act as risk owners.
Identify Risks: Inputs
V. Enterprise Environmental Factors
iii. Agreements • The enterprise environmental factors that
• If the project requires external procurement of
can influence the Identify Risks process
resources, the agreements may have • Published material, including commercial risk
information such as milestone dates, databases or checklists,
contract type, acceptance criteria, and • Academic studies,
awards and penalties that can present • Benchmarking results, and
threats or opportunities. • Industry studies of similar projects.
vi. Organizational Process Assets
Iv. Procurement Documentation • The organizational process assets that can
• Procurement documentation such as seller influence the Identify Risks process include:
Project files, including actual data,
performance reports, approved change
•
• Organizational and project process controls,
requests and information on inspections may • Risk statement formats, and
Checklists from previous similar projects.
introduce additional individual project risks. •
Identify Risks: Tools And Techniques
Expert Judgment ii. Data Gathering
• Expertise should be considered from • Data-gathering techniques that can
individuals or groups with specialized be used for this process include:
knowledge of similar projects or
business areas. • Brainstorming ; The project team usually
performs brainstorming, often with a
multidisciplinary set of experts who are
• Such experts should be identified by the
not part of the team.
project manager and invited to consider
all aspects of individual project risks as
well as sources of overall project risk, • Ideas are generated under the guidance
based on their previous experience and of a facilitator, either in a free-form
areas of expertise. brainstorm session or one that uses more
structured techniques.
Identify Risks: Tools And Techniques….
ii. Data Gathering…. ii. Data Gathering…
• Checklist: A checklist is a list of items, • Interviews: Individual project risks
actions, or points to be considered. It is and sources of overall project risk
often used as a reminder. Risk checklists can be identified by interviewing
are developed based on historical experienced project participants,
information and knowledge that has stakeholders, and subject matter
been accumulated from similar projects experts
and from other sources of information
Identify Risks: Tools And Techniques….
iii. Data Analysis Iv. Interpersonal And Team Skills
• Data analysis techniques that can be used
for this process include : • Explore key interpersonal skills in
project management, including
• Root cause analysis • Communication,
• Assumption and constraint analysis.
• Leadership,
• SWOT analysis.
• Conflict resolution,
• Document Analysis; documents, including plans, • Emotional intelligence,
assumptions, constraints, previous project files, • Team building, stakeholder management,
contracts, agreements, and technical
documentation. Uncertainty or ambiguity in • Problem-solving, time management,
project documents, as well as inconsistencies negotiation, collaboration,
within a document or between different
documents, may be indicators of risk on the • Decision-making, risk management,
project. empathy, cultural sensitivity, and flexibility.
Identify Risks: Tools And Techniques….
v. A prompt List:
• Some common strategic frameworks are
more suitable for identifying sources of
• Prompt list is a predetermined overall project risk, for example
list of risk categories that might • PESTLE (political, economic, social,
technological, legal, environmental),
give rise to individual project risks • TECOP(technical, environmental,
and that could also act as sources commercial, operational, political), or
of overall project risk. • VUCA(volatility, uncertainty,
complexity, ambiguity).
• The prompt list can be used as a
framework to aid the project team Prompt lists provide a broad overview of
in idea generation when using risks, while risk categorization offers a
identification techniques. detailed and structured risk analysis.
Identify Risks: Tools • Undertake risk identification, the project team may conduct
And Techniques…. a specialized meeting (often called a risk workshop).
• Most risk workshops include some form of brainstorming
• Use of a skilled facilitator and the right people participate in
the risk work shop will increase the effectiveness of the
meeting.
Vi. Meetings
Identify Risks: Outputs
• ii. Potential risk owners. Where a potential risk
• 1 Risk Register owner has been identified during the Identify
• On completion of the Identify Risks Risks process, the risk owners are individuals
who are responsible and accountable for
process, the content of the risk register ensuring risk management properly. Are
may include; recorded in the risk register.
• iii. List of potential risk responses. Where a
• i. List of identified risks. Each individual potential risk response has been identified
project risk is given a unique identifier in during the identify risk process, it is recorded in
the risk register. This will be confirmed during
the risk register. Identified risks are
the Plan Risk Responses process.
described in as much detail as required • Additional data may be recorded for each
to ensure unambiguous understanding. identified risk, depending on the risk register
A structured risk statement may be format specified in the risk management plan.
used to distinguish risks from their
cause(s) and their effect(s).
Identify Risks: Outputs
2-Risk Report 3- Project Documents Updates
• The risk report presents information on • Project documents that may be updated as a result of this
process:
sources of overall project risk,
together with summary information Assumption log: During the Identify Risks process,
on identified individual project risks.
•
new assumptions may be made, new constraints
• The risk report is developed may be identified, and existing assumptions or
constraints may be revisited and changed. The
progressively throughout the Project assumption log should be updated with this new
Risk Management process. The results information.
of Perform Qualitative Risk Analysis, • ii. Issue log: The issue log should be updated to
capture any new issues uncovered or changes in
Perform Quantitative Risk Analysis, Plan currently logged issues.
Risk Responses, Implement Risk
• Responses, and Monitor Risks are also • Lessons learned register. The lessons learned
register can be updated with information on
included in the risk report as those techniques that were effective in identifying risks
processes are completed to improve performance in later phases or other
projects.
20 Common Project Risks
• Project purpose and need is not well-defined. • project conflicts not resolved in a timely manner.
• Project design and deliverable definition is • Business Case becomes obsolete or is undermined by external or
internal changes.
incomplete.
• Project schedule is not clearly defined or • Delay in earlier project phases jeopardizes ability to meet fixed date.
understood. For example delivery of just in time materials, for conference or
launch date.
• No control over staff priorities. • Added workload or time requirements because of new direction,
• Consultant or contractor delays. policy, or statute.
• Inadequate customer testing leads to large post go live defect list.
• Estimating and/or scheduling errors. • Legal action delays or pauses project.
• Unplanned work that must be accommodated.
• Customer refuses to approve deliverables/milestones or delays
• Lack of communication, causing lack of clarity and approval, putting pressure on project manager to 'work at risk'.
confusion. • Theft of materials, intellectual property or equipment.
• Acts of God for example, extreme weather, leads to loss of resources,
• Pressure to arbitrarily reduce task durations and or materials, premises etc.
run tasks in parallel which would increase risk of • Stakeholder action delays the project.
errors.
• Scope Creep.
Home take assignment!!!!!
Take a certain ideal project and prepare the assumption
and issue log for the next week class!!!!
QUESTION
End of the
chapter!