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Risk Management

The document discusses project risk management and outlines six processes for managing risk: risk management planning, risk identification, qualitative risk analysis, quantitative risk analysis, risk response planning, and risk monitoring and control. It provides details on tools and techniques used in each process, such as documentation reviews, information gathering, probability and impact matrices, and quantitative risk analysis modeling. The overall goal of risk management is to increase the probability of positive events and decrease the probability of negative events on a project.

Business◦Economy & Finance◦
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Risk-Management•
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Risk Management
Project Risk Management • The processes of conducting risk management planning, identification, analysis, response planning and monitoring and control on a project • Objectives are to increase the probability and impact of positive events and decrease the probability and impact of negative events In the project
To manage risk we use the six risk management processes Risk Management Planning Risk Identification Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Risk Monitoring and Control
• To manage risk we use the six risk management processes – Risk Management Planning – Risk Identification – Qualitative Risk Analysis – Quantitative Risk Analysis – Risk Response Planning – Risk Monitoring and Control Risk Management Planning Risk Identificatio n Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Risk Monitoring and Control
Enterprise Environmental Factors Inputs Tools & Techniques  Planning Meetings and Analysis Organizational Process Assets Project Scope Statement Outputs Risk Management Plan Project Management Plan Risk Management Planning Risk Identification Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Risk Monitoring and Control
• • • • • Methodology – Approach, tools, & data Roles & Responsibilities Budgeting – Resources to be put into risk management Timing – When and how often Risk Categories – Risk Breakdown Structure (RBS) • Definitions – Risk probabilities and impact
Project Technical Organizational Project Management Limited Design Time Funding Estimates Specifications Adherence Prioritization Scheduling Resource Availability Communication
Risk Identification Inputs Enterprise Environmental Factors Tools & Techniques  Documentation Reviews  Information Gathering Techniques Organizational Process Assets Outputs Risk Register  Checklist Analysis Project Scope Statement  Assumption analysis  Diagramming techniques Risk Management Plan Project Management Plan Risk Management Planning Risk Identification Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Risk Monitoring and Control
Information Gathering Techniques •Successive anonymous questionnaires on project risks with responses summarized for further analysis
Qualitative Risk Analysis Inputs Organizational Process Assets Tools & Techniques  Risk probability and impact statement Project Scope Statement  Probability and impact matrix Outputs  Risk data quality assessment Risk Management Plan )  Risk categorization  Risk urgency assessment Risk Register Risk Management Planning Risk Identificatio n Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Risk Monitoring and Control
Consequen ce Extreme High Moderate Low Negligible Health and Safety Fatality or multiple fatalities expected Severe injury or disability likely; or some potential for fatality Lost time or injury likely; or some potential for serious injuries; or small risk of fatality Likelihood Class Not Likely (NL) Low (L) <0.01% chance of occurrence 0.01 - 0.1% chance of occurrence Moderate (M) 0.1 - 1% chance of occurrence High (H) 1 - 10% chance of occurrence First aid required; or small risk of serious injury No concern Likelihood of Occurrence (events/year) Expected (E) >10% chance of occurrence
Rate each risk on scales then plot on matrix Develop mitigation technique for risks above tolerance
Risk Register Update • Add – Probability and Impact Matrix results – Perform quality check on results – Categorize the risks to make them easier to handle – Perform urgency assessment to determine which risk need immediate attention
Quantitative Risk Analysis Inputs  Data gathering  Quantitative risk analysis and modeling Outputs ) Risk Manageme nt Planning Risk Identification Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Risk Monitoring and Control
• Analyze numerically the probability and consequence of each risk • Monte Carlo analysis popular • Decision Tree analysis on test – Diagram that describes a decision and probabilities associated with the choices • Expected Monetary Value Analysis (EMV)
) – – – – Avoid Transfer Mitigate Acceptance – – – – Exploit Share Enhance Acceptance