PROJECT RISK

MANAGEMENT
Chapter 2 - Identifying
Project Risks
 2.1. Identification participants

• The project manager and the

• Where time and resources project team;

• Project sponsors;
permit, all members of the
• Discipline engineers;
project team should attend the
• Experts with specific knowledge
identification session,
in particular areas of concern
including functional unit
• Commercial specialists;
members assigned to the
• Health, safety and environmental
project on a part-time basis.
specialists;
• People who might be included • Users of the project outcomes;
in a brainstorming group are: • Key stakeholders
[Link] gathering techniques for identifying
project risk
1. Documentation reviews: 2. Brainstorming

• What is and what is not included in • Brainstorming is a group creativity

the preliminary project scope technique designed to generate a
statement, the project charter and large number of ideas for the solution
later documents can help identify of a problem.
risks.
• Lessons learned, articles and other • it may still provide benefits, such as
documents can also help uncover boosting morale, enhancing work
risks. enjoyment, and improving team work.
• Documentation reviews involve
reviewing project plans,
• Thus, numerous attempts have been
assumptions, and historical
made to improve brainstorming or use
information from a total project
more effective variations of the basic
perspective as well as at the
individual deliverables or activities technique.
level.
Rules in brainstorming. These are : Rules
• Focus on quantity: • Withhold criticism:
• In brainstorming, criticism of ideas
generated should be put 'on hold'.
• This rule is a means of Instead, participants should focus on
enhancing divergent production, extending or adding to ideas, reserving
aiming to facilitate problem criticism for a later 'critical stage' of
the process.
solving through the maxim,
• By suspending judgment, participants
quantity breeds quality. will feel free to generate unusual ideas.
• The assumption is that the
greater the number of ideas
• Combine and improve ideas:
generated, the greater the
• Good ideas may be combined to form a
chance of producing a radical
single better good idea,
and effective solution.
 3. Delphi technique

• The Delphi method is a • This method utilizes a formal

systematic, interactive Delphi group and is designed
forecasting method which to pool the expertise of many
relies on a panel of professionals in such a way
independent experts. The as to gain access to their
carefully selected experts knowledge and to their
answer questionnaires in two technical skills while
or more rounds. removing the influences of
seniority, hierarchies, and
personalities on the derived
forecast.
 4. Interviewing 5. Root cause analysis

• Interviews are question-and- • Root cause analysis (RCA) is a class of

answer sessions held with problem solving methods aimed at

identifying the root causes of problems
others, including other project or events.
managers, subject matter • The practice of RCA is predicated on the
experts, stakeholders, belief that problems are best solved by
customers, the management attempting to correct or eliminate root
team, project team members, causes, as opposed to merely
addressing the immediately obvious
and users.
symptoms.
• These people provide possible
• By directing corrective measures at root
risks based on their past causes, it is hoped that the likelihood of
experiences with similar projects. problem recurrence will be minimized.
 6. Checklists
• Checklists are quick to use, • Checklists used during the
and they provide useful Risk Identification process
guides for areas in which the are usually developed based
organization has a depth of on historical information and
experience, particularly for previous project team
projects that are standard or experience.
routine in nature.
• The checklists are part of the
organization's quality
assurance procedures and
documentation.
 7. Diagramming techniques

Diagramming techniques,
such as system flow charts,
cause-and-effect diagrams,
and influence diagrams are
used to uncover risks that
aren't readily apparent in
verbal descriptions.
 2.3. SWOT analysis
SWOT

• SWOT Analysis is a strategic • Strengths: attributes of the team

planning method used to or company those are helpful to

achieving the objective.
evaluate the Strengths,
• Weaknesses: attributes of the
Weaknesses, team or company those are
Opportunities, and harmful to achieving the objective.
Threats involved in a • Opportunities: external
project. conditions those are helpful to
• It involves specifying the achieving the objective.
• Threats: external conditions
objective of the project and
which could do damage to the
identifying the internal and business's performance.
external factors that are
2.4. Work breakdown structure
(WBS)
• A work breakdown • A work breakdown structure
structure (WBS) is a visual, (WBS) is a project
hierarchical and management tool that takes
deliverable-oriented a step-by-step approach to
deconstruction of a project. complete large projects with
• It is a helpful diagram for several moving pieces.
project managers because it
allows them to break down
their project scope and • By breaking down the project
visualize all the tasks required into smaller components, a
to complete their projects. WBS can integrate scope,
cost and deliverables into a
2.5. Risk register
At this point the risk register would
include:
• List of risks. Root causes of risks previously
• List of potential responses. explained, these are now
Though risk response planning documented.
occurs later, one of the things
experienced risk managers know Updated risk categories. You will
is that it is not always logical to notice lots of places where
separate work on each part of historical records and company
risk management. records are updated throughout
the project management process
20 Common Project Risks
• Project conflicts not resolved in a timely manner.
• Project purpose and need is not well-defined. • Business Case becomes obsolete or is undermined by
• Project design and deliverable definition is external or internal changes.
incomplete. • Delay in earlier project phases jeopardizes ability to
meet fixed date. For example delivery of just in time
• Project schedule is not clearly defined or
materials, for conference or launch date.
understood. • Added workload or time requirements because of
• No control over staff priorities. new direction, policy, or statute.
• Consultant or contractor delays. • Inadequate customer testing leads to large post go
• Estimating and/or scheduling errors. live defect list.
• Legal action delays or pauses project.
• Unplanned work that must be • Customer refuses to approve deliverables/milestones
accommodated. or delays approval, putting pressure on project
• Lack of communication, causing lack of manager to 'work at risk'.
clarity and confusion. • Theft of materials, intellectual property or
equipment.
• Pressure to arbitrarily reduce task durations
• Acts of God for example, extreme weather, leads to
and or run tasks in parallel which would loss of resources, materials, premises etc.
increase risk of errors. • Stakeholder action delays the project.
• Scope Creep.
 Risk
Documentation
• Each element and each risk • Each risk should be described.
should be numbered, to facilitate
storage and retrieval of • The description of the risk should
information. include the main assumptions and
mechanisms leading to the risk
• Often the risk numbers are arising, the criteria likely to be
nested within the element affected, the phases of the project
number, and the nested in which it is most likely to occur
numbering is extended as and notes on the consequences if
it does arise.
necessary as the analysis
• Sources of information should also
progresses.
be noted.
 Risk Responsibility 2.6. Risk report
• Management responsibility • Project management is most frequently
associated with the topics of cost,
for dealing with each quality, and time. Yet, those three legs
specified risk and ensuring of project management are all directly
effective treatment plans are impacted by risk.
• Risk management is crucial in all
developed and implemented projects; whether an opportunity or
should be assigned and threat, all risks should be identified and
recorded. planned to increase the possibility of a
successful outcome for a project.
• Project managers (PM) conduct risk
• The responsible manager is analysis work, maintain a risk watch list,
and generate a risk report as part of
sometimes called the risk overall risk management work.
owner.
• By definition, a risk report is a • The risk report will inform key

communication tool within risk stakeholders of the consequence of

the risks, the likelihood of occurrence,
management. and the mitigation strategy to be
adopted in the event the risks occur.
• The report should be clear,
• A well-developed and maintained risk
concise, and indicate actions
register can serve as the risk report, if
taken, preparation for other it includes not only negative risks but
risk-related actions, and any also opportunities, a supporting risk
inputs needed by stakeholders treatment plan, a work performance
to ensure continuous risk data review, project progress, and the
management support. status of all deliverables.
 A risk report
• is an indicator of the
performance of the overall
risk management work.
Project managers should use
the risk report to convey risk
status to the team and to
provide information to
stakeholders to inform risk
management decisions.
Home take assignment!!!!!
Take a certain ideal project and prepare the RISK REGISTER for
the next week class!!!!
QUESTION

End of
the chapter!