PMBody of Knowledge (Risk) Leangroup Org

Print and send PDF files as Emails with any application, ad-sponsored and
www.pdfmailer.com
PDFMAILER.COM
free of charge www.pdfmailer.com
Assiut University
Faculty of Computers and Information
Project Management Body

Of Knowledge
Academic Year 2014/ 2015
Term (1)
Project Risk Management

www.pdfmailer.com
PDFMAILER.COM
Agenda
Week 1 Week 7
Introduction to Project Management Project Quality Management
Organizational Influences and Project Project Risk Management
Life Cycle Week 8
Week 2 Project Stakeholder Management
Project Management Processes Project Communications Management
Project Integration Management Week 9
Week 3 Project Human Resource Management
Project Scope Management Project Procurement Management
Week 4 Week 10
Project Time Management Agile Project Management Techniques and
Practices
Week 5
Project Cost Management Week 11
Agile Development / SDLC Models
Week 6 (7 Dec 2014) Week 12
Wrap-up / Revision
Mid-Term Exam
2
www.pdfmailer.com
PDFMAILER.COM
What Is Risk?
A risk can be defined as a possible undesirable and unplanned

event that could result in a project not meeting its objectives.
Project Risk can be defined as the cumulative effect of
uncertain occurrences adversely affecting project objectives
Risk could be negative (unfavorable) or positive (opportunity)
Risk has three components:

A possible FUTURE Risk Event, an uncertainty
Probability of the occurrence of that event (likelihood)
Impact of that event or Amount at Stake (consequence)
www.pdfmailer.com
PDFMAILER.COM
Risk Classifications
Risk can be classified as:
Known risks - Are those that have been identified and analyzed, and it may be
possible to plan for those risks (Items or situations containing no uncertainty)
Unknown risks - Are those that are unknown and thus cannot be managed
proactively; best response by the project team can be to allocate general
contingency against such risks (things which you know exist but you do not know how they
will affect you)
Known-Unknown - An item containing identifiable uncertainty

Unknown-Unknowns - An item or situation whose existence we cannot
imagine
www.pdfmailer.com
PDFMAILER.COM
Manage Risk
"Sooner Rather Than Later..."
www.pdfmailer.com
PDFMAILER.COM
What Is Project Risk Management?

Project Risk Management includes the processes of conducting risk management
planning, identification, analysis, responses planning, and controlling risk on a
project.
v It includes maximizing the probability and consequence of positive events

and minimizing the probability and consequence of negative events to
project objectives
v Ongoing, iterative process concerned with risk throughout the project.
v Series of forward-looking, linked activities and processes that is designed to
handle risks and reduce their probability or impact on the project
v Continuous process (early in the cycle, regularly thereafter)
www.pdfmailer.com
PDFMAILER.COM
Why Project Risk Management?
To improve odds of defining and developing winning projects outcomes,

Delivering projects outcome on time and within budget,
Achieving Customer Satisfaction
The purpose of project risk management is to:

Specifically identify factors that are likely to impact the
project objectives
Quantify the likely impact of each factor
Give a baseline for project events that aren't controllable
Mitigate the impact of project events which are controllable
www.pdfmailer.com
PDFMAILER.COM
Risk Management has Six Major Processes

Step 1: Plan Risk Management
Step 2:Identify Risk
Step 3: Perform Qualitative Risk Analysis
Step 4: Perform Quantitative Risk Analysis
Step 5: Plan Risk Response
Step 6: Monitor and Control Risk
The risk process should be used when a project is being planned, when changes are being
evaluated, as risk events and issues arise, or when the project hits a major phase or milestone
www.pdfmailer.com
PDFMAILER.COM
Plan Risk Management

Risk Management Planning is the process of deciding how to conduct
risk management activities for a project.
Plan Risk Management should be completed early during project

planning; it is crucial to successful performance of the other project risk
planning
management processes
The key benefit is to ensure the degree, type, and visibility of risk management are
commensurate with both the risk and the importance of the project to the organization
www.pdfmailer.com
PDFMAILER.COM
Plan Risk Management : Outputs

Risk management plan; It may includes the following:
Methodology - Defines the approaches, tools, and data sources that may be
used to perform risk management
Roles and Responsibilities - Defines the lead, support, and risk management
team membership for each type of action in the risk management plan
Budgeting - Assigns resources and estimates costs needed for risk
management for inclusion in the project cost baseline
Timing - Defines how often the risk management process will be performed
throughout the project life cycle and establishes risk management activities
to be included in the project schedule
Risk categories - Provides a structure that ensures a comprehensive
process of systematically identifying risk to a consistent level of detail and
contributes to the effectiveness and quality of Risk Identification; a Risk
Breakdown Structure (RBS) is one approach to providing such a structure
www.pdfmailer.com
PDFMAILER.COM
Risk Management Plan: Output (continued)

Definitions of risk probability and impact - Quality and credibility of the Qualitative Risk
Analysis process requires that different levels of the risksprobabilities and impacts be defined;
this should be tailored to the individual project for use in the Qualitative Risk Analysis process
www.pdfmailer.com
PDFMAILER.COM
Risk Management Plan: Output (continued)

Probability and impact matrix - Risks are prioritized according to their
potential implications for meeting the project's objectives and should be
reviewed and tailored to the specific project
Revised stakeholders' tolerances - As they apply to the specific project,

stakeholders' tolerances may be revised in the Risk Management Planning
process
Reporting formats - Describes the content and format of the risk register,
as well as any other required risk reports
Tracking - Documents how all facets of risk activities will be recorded for
the benefit of the current project, future needs, and lessons learned
www.pdfmailer.com
PDFMAILER.COM
Sources For Identifying Project Risk
Risk Category is a group of potential causes of risk; risk causes

may be grouped into categories such as technical, external,
organizational, environmental, or project management. Then create
the RBS based on the Risk Categories.
Risk Breakdown Structure (RBS) is a hierarchically

organized depiction of the identified project risks arranged by risk
category and subcategory that identifies the various areas and
causes of potential risks; the risk breakdown structure is often
tailored to specific project types
www.pdfmailer.com
PDFMAILER.COM
Risk Breakdown Structure (RBS)

Provides a structure for identifying Risk Categories
Project
Project
Technical Organizational External
Management
Requirements Project Subcontractors

Estimating and Suppliers
Dependencies
Technology Planning Resources Regulatory
Complexity and
Interfaces Controlling Funding Market
Performances
and Reliability Communication Prioritization Customer
Quality Weather
The RBS lists the categories and sub-categories within which risks may arise for a typical project. Different
RBSs will be appropriate for different types of projects and different types of organizations. One benefit of
this approach is to remind participants in risk identification exercise of the many sources from which
project risk may arise.
www.pdfmailer.com
PDFMAILER.COM
Identify Risk
Risk Identification determines which risks might affect the project
and documents their characteristics
Risk Identification is an iterative process because new risks may

become known as the project progresses through its life cycle.
The Risk Identification process usually leads to the Qualitative Risk

Analysis process.
It also could lead directly to the Quantitative Risk Analysis process

when conducted by an experienced Risk Manager
www.pdfmailer.com
PDFMAILER.COM
Identify Risk
www.pdfmailer.com
PDFMAILER.COM
Identify Risk: Tools & Techniques

Information Gathering Techniques
Brainstorming - Goal is to obtain a comprehensive list of project risks; project team
usually performs brainstorming, often with a multidisciplinary set of experts not on
the team; facilitator provides input, states objectives, controls meeting
Delphi technique - Way to reach a consensus of experts; project risk experts are
identified but participate anonymously; a facilitator uses a questionnaire to solicit
ideas about the important project risks; the responses are submitted and then
circulated to the experts for further comment
Interviewing - Risks are identified by interviewing experienced project managers or
subject-matter experts; interviews are one of the main sources of risk identification
data gathering
Root cause identification - Inquiry into the essential causes of a project's risks;
sharpens the definition of risk and allows grouping risks by causes
Strengths, weaknesses, opportunities, and threats (SWOT) analysis - Ensures
examination of the project from each of the SWOT perspectives to increase the
breadth of the risks considered
www.pdfmailer.com
PDFMAILER.COM
SWOT Analysis
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective.
Internal
Strengths Weaknesses
External
Opportunities Threats
www.pdfmailer.com
PDFMAILER.COM
Identify Risk : Tools & Techniques (continued)
Checklist Analysis
Risk identification checklists are developed based on historical information
and knowledge that has been accumulated from previous similar projects and
from other sources of information.
The lowest level of the RBS can also be used as a risk checklist.
Includes problem areas from lessons learned
Not all-inclusive, it is impossible to build an exhaustive list
Care should be taken to explore items that do not appear on the
checklist
Good risk management goes beyond predefined risks
Some organizations have a predefined list
Available from Web sites
Needs to be maintained
Lowest level of the Risk Breakdown Structure can be used as a checklist
www.pdfmailer.com
PDFMAILER.COM
Identify Risk : Tools & Techniques (continued)
Diagramming Techniques
System or process flow charts - These show how various
elements of a system interrelate, and the mechanism of causation
Influence diagrams - A graphical representation of a problem
showing causal influences, time ordering of events, and other
relationships among variables and outcomes
Influence Diagram
www.pdfmailer.com
PDFMAILER.COM
Diagramming Techniques
Cause and Effect Diagram

Cause and effect diagrams, also called Ishikawa diagrams or fishbone
diagrams, illustrate how various factors might be linked to potential problems
or effects.
www.pdfmailer.com
PDFMAILER.COM
Identify Risk : Output

Risk Register - Created as an output of Risk Identification; becomes
a component of the Project Management Plan; will ultimately contain
the outcomes of the other risk management processes:
List of identified risk - List of identified risk including their root causes and
uncertain project assumptions
List of identified potential risk responses - List the potential responses to a
risk which can be used as inputs in the Risk Response Planning process
Root causes of identified risk - The fundamental conditions or events that
may give rise to the identified risk
Updated risk categories - New risk categories may need to be added to the
list initially created in the Risk Management Planning process
www.pdfmailer.com
PDFMAILER.COM
Perform Qualitative Risk Analysis
Qualitative Risk Analysis;

Process of prioritizing risks for subsequent further analysis or
action by assessing and combining their probability of
occurrence and impact.
www.pdfmailer.com
PDFMAILER.COM
Qualitative Risk Analysis

Assesses the priority of identified risk using their probability of
occurring, the corresponding impact on project objectives if the risk do
occur
Risk Qualitative Analysis is oriented toward determining the risks you
have to be most concerned about; all risks are not created equal
Estimate the probability that each identified risk event will or will not
occur
Determine the impact of the risk event (the amount at stake or what
can be lost)
Rank the risks based on the probability/impact
Identify the risks that will be managed (mitigated)
www.pdfmailer.com
PDFMAILER.COM
Qualitative Risk Analysis: Inputs
Risk Management Plan

Key elements of the risk management plan for Qualitative
Analysis include:
Roles and responsibilities for conducting risk management
Budgets
Schedule activities for risk management
Risk categories
Definition of probability and impact
Probability and impact matrix
Revised stakeholders' risk tolerances
www.pdfmailer.com
PDFMAILER.COM
Qualitative Risk Analysis: Tools & Techniques

Risk probability assessment - Investigates the likelihood that each specific
risk occurs
Risk impact assessment - Investigates the potential effect on a project
objective such as time, cost, scope, or quality
Probability and impact are assessed for each identified risk
Estimate the probability (likelihood) and impact (consequence / magnitude)
for each identified risk event
Quantify where possible
Qualify when necessary
Combination of both helps determine its final importance
Identify worst, best, and most probable scenarios
Assign risk analysis tasks to appropriate team members

Risk can be assessed in interviews or meetings with participants selected
for their familiarity with the risk categories
www.pdfmailer.com
PDFMAILER.COM
Qualitative Risk Analysis: Tools & Techniques (continued)

Probability and Impact Matrix - Risks can be prioritized for further
quantitative analysis and response based on their risk rating
Ratings are assigned to risks based on their probability and impact
Evaluation of each risk's importance and priority for attention is typically
conducted using a probability and impact matrix, which specifies
combinations of probability and impact that lead to rating risks as low,
moderate, or high
Determination must be made as to which combinations of probability and
impact result in a classification of:
High risk or red condition
Moderate risk or yellow condition
Low risk or green condition
Risk rating rules are typically specified in advance of the project by
an organization and included in the organizational process assets
www.pdfmailer.com
PDFMAILER.COM
Probability and Impact Matrix
Severity of a Risk Event (Risk Score) =

Risk Probability x Impact of a Risk Event
Impact
Low Moderate High
Unacceptabl
High Moderate High
e
Probability Moderate Low High High
Low Low Moderate Moderate
A matrix is a tool to represent the combination of the probability and impact

www.pdfmailer.com
PDFMAILER.COM
Qualitative Risk Analysis: Tools & Techniques (continued)

Risk data quality assessment - Qualitative risk analysis requires accurate
and unbiased data for it to be credible
Analysis of the quality of risk data provides a technique to evaluate the degree to
which the data about risks is useful for risk management, involves examining the:
Degree to which the risk is understood
Accuracy, quality, reliability, and integrity of the risk data
Risk categorization - Allows for categorizing project risks to determine

areas of the project most exposed to the effects of uncertainty
Grouping risks by common root causes can result in developing effective risk
responses. Categories can be:
Source of the risk using the Risk Breakdown Structure
Areas of the project affected using the Work Breakdown Structure
Other categories like project phases
Risk urgency assessment - Review risk requiring near-term responses

www.pdfmailer.com
PDFMAILER.COM
Qualitative Risk Analysis: Outputs

Risk Register
which was developed in the Risk Identification process is
updated based on outcomes of Qualitative Risk Analysis; the
updates include:
Relative ranking or priority list of project risk - Probability
and impact matrix can be used to classify risks according to their
individual significance
Risks grouped by categories - Risk categorization can reveal
common root causes of risk or project areas requiring particular attention
List of risks requiring response in the near-term - Risk
requiring an urgent response and those that can be handled later may be
put into separate groups
www.pdfmailer.com
PDFMAILER.COM
Qualitative Risk Analysis: Outputs (continued)
Risk Register - the updates include:
List of risks for additional analysis and response - Some risks

might warrant more analysis, including Quantitative Risk Analysis, as well
as response action
Watch-lists of low priority risks - Risk not assessed as important
can be placed on a watch-list for continued monitoring
Trends in qualitative risk analysis results - Trend for a particular
risks may become apparent and can make risk response or further analysis
more or less urgent/important
www.pdfmailer.com
PDFMAILER.COM
4. Perform Quantitative Risk Analysis
Quantitative Risk Analysis;

Process of numerically analyzing the effect on overall project
objectives of identified risks
www.pdfmailer.com
PDFMAILER.COM
Quantitative Risk Analysis

Quantitative Risk Analysis;
Performed on risks that have been prioritized by the Qualitative Risk Analysis process as
having potential and substantial impact on the competing demands of the project
Analyzes the effect of the prioritized risk events and assigns a numerical rating to those
risks
Provides a quantitative approach to making decisions in the presence of uncertainty
Uses techniques such as decision tree analysis to:
Quantify the possible outcomes for the project and their probabilities
Assess the probability of achieving specific project objectives Identify risks requiring the most
attention by quantifying their relative contribution to overall project risk
Identify realistic and achievable cost, schedule, or scope targets given the project risks
Determine the best project management decisions when some conditions or outcomes are
uncertain
www.pdfmailer.com
PDFMAILER.COM
Quantitative Risk Analysis : Tools & Techniques
Data Gathering and Representation Techniques

Interviewing
Interviewing techniques are used to quantify the probability and
consequences of risks on project objectives
Probability Distribution
Used extensively in modeling and simulation represent the
uncertainty in values such as durations of schedule activities and
costs of project components
www.pdfmailer.com
PDFMAILER.COM
Quantitative Risk Analysis Tools & Techniques (continued)

Quantitative risk analysis and modeling technique
Sensitivity Analysis is a technique used to help determine which risks
have the most potential impact on the project:
It examines the extent to which the uncertainty of each project
element affects the objective being examined when all other
uncertain elements are held at their baseline values
It is the technique;
By which to discover whether a particular utility or probability is
important in determining the preferred option
Key to the power of decision analysis in situations in which the
value of the probabilities is not known precisely (which is where
decision analysis has the most to offer)
That helps to identify the most important parameters (the
probabilities and outcomes) in the model
www.pdfmailer.com
PDFMAILER.COM

Expected Monetary Value Analysis is a Statistical concept that
calculates the average outcome when the future includes scenarios that
may or may not happen:
EMV is calculated by multiplying the value of each possible
outcome by its probability of occurrence, and then adding them
together
EMV opportunities are generally expressed as positive values,
while those of risks are negative
Common use of this type of analysis in decision tree analysis
www.pdfmailer.com
PDFMAILER.COM

Decision Trees
Is a diagram that depicts key interactions among decisions and
associated chance events as they are understood by the decision
maker
Branches represent either decisions (shown as boxes) or chance
events (shown as circles)
Forces consideration of the probability of each outcome
Decision Trees are useful to apply various probabilities and arrive
at the Estimated Monetary Value for various options
The option with the highest EMV is usually chosen
www.pdfmailer.com
PDFMAILER.COM
Decision Tree Example

FFP Contract Value $100,000
Per day Penalty for Delay $1,000
Execute Self
80% chance the cost is $80,000

Chance schedule on time 95%
Chance schedule is delayed 2 days 5%
Outsourcing

Chance schedule on time 80%
Chance schedule is delayed 20 days 20%
www.pdfmailer.com
PDFMAILER.COM
COST Schedule Probability

Execute Self
0.76
0.95
0.8
0.05 0.04
0.95 0.19
0.2
0.05 0.01
0.6 0.80 0.48

Outsourcing
0.20 0.12
0.80 0.32
0.4
0.20 0.08
www.pdfmailer.com
PDFMAILER.COM
COST Schedule Probability Value EMV

20,000 15,200
Execute Self
0.76
0.95
0.8 720
0.04 18,000
0.05
0.19 10,000 1,900
0.95
0.2 80
0.05 0.01 8,000
17,900
0.80 0.48 30,000 14,400

0.6
Outsourcing
10,000 1,200
0.20 0.12
0.80 0.32 20,000 6,400

0.4
0.20 0.08 0 0
22,000
OK
www.pdfmailer.com
PDFMAILER.COM
Probability of Probability of Overall

Execute Self Path Value EMV
Cost Schedule Probability
%80 0.95 0.76 20000 15200
%80 0.05 0.04 18000 720
%20 0.95 0.19 10000 1900
%20 0.05 0.01 8000 80
17900
Outsourcing
%60 0.8 0.48 30000 14400
%60 0.2 0.12 10000 1200
%40 0.8 0.32 20000 6400
%40 0.2 0.08 0 0
22000
Overall Probability = Probability of Cost * Probability of Schedule

Path Value = Contract Value - Cost to Complete - Penalty Cost
EMV = Overall Probability * Path Value
www.pdfmailer.com
PDFMAILER.COM
Decision Tree Diagram

www.pdfmailer.com
PDFMAILER.COM

Simulation
Simulation uses a representation or model of a system to
analyze the behavior or performance of the system
Monte Carlo analysis is the best known of the simulations
Results are used to quantify risk of various schedule choices
Considered to be a better approach than CPM or PERT since Monte
Carlo analysis accounts for path convergence; CPM or PERT tend to
underestimate the project durations
The statistical distribution used in the Monte Carlo analysis can have a
significant effect on the simulation
www.pdfmailer.com
PDFMAILER.COM
Quantitative Risk Analysis Outputs

Risk Register
Which was developed in the Risk Identification process is updated based
on outcomes of Qualitative Risk Analysis; the updates include:
Probability analysis of the project - Estimates are made of potential
project schedule and cost outcomes, listing the possible completion dates
and costs with their associated confidence levels
Probability of achieving cost and time objectives - With the risks
facing the project the probability of achieving project objectives under the
current plan can be estimated using quantitative risk analysis results
Prioritized list of quantified risks - List of risks that includes those that
pose the greatest threat or present the greatest opportunity to the
project
Trends in quantitative risk analysis results - Trend may become
apparent that leads to conclusions affecting risk responses
www.pdfmailer.com
PDFMAILER.COM
5. Plan Risk Response

Risk Response Planning;
is the process of developing options and determining actions to
enhance opportunities and reduce threats to project objectives.
www.pdfmailer.com
PDFMAILER.COM
Plan Risk Response
It includes the identification and assignment of individuals or parties to take

responsibility for each agreed to and funded risk response
Addresses the risks by their priority, inserting resources and activities into the
budget, schedule, and project management plan, as appropriate
Planned risk responses must be:

Appropriate to the significance of the risk
Cost effective in meeting the challenge
Timely
Realistic within the project context
Agreed upon by all parties
Owned by a responsible person
www.pdfmailer.com
PDFMAILER.COM
Risk Response Planning Inputs

Risk Register
Which was developed in the Risk Identification process is
updated based on outcomes of Qualitative Risk Analysis; the
updates include:
Relative ranking or priority list of project risks
List of risks requiring response in the near-term
List of risks for additional analysis and response
Trends in qualitative risk analysis results
Root causes
Risks grouped by categories
Watch-list of low priority risks
www.pdfmailer.com
PDFMAILER.COM
Risk Response Planning Tools & Techniques

Strategies for Negative Risks or Threats
Avoid - Risk avoidance involves changing the project management plan to eliminate the
threat posed by an adverse risk, to isolate the project objectives from the risk's impact, or
to relax the objective that is in jeopardy
Transfer - Risk transference requires shifting the negative impact of a threat, along with
ownership of the response, to a third party
Mitigate - Risk mitigation implies a reduction in the probability and/or impact of
adverse risk event to an acceptable threshold
Strategies for Positive Risks or Opportunities

Exploit - This strategy seeks to eliminate the uncertainty associated with a particular
upside risk by making the opportunity definitely happen
Share - Sharing a positive risk involves allocating ownership to a third party who is best
able to capture the opportunity for the benefit of the project
Enhance - Modifies the size of an opportunity by increasing probability and/or positive
impacts and by identifying and maximizing key drivers of these positive-impact risks
www.pdfmailer.com
PDFMAILER.COM
Risk Response Planning Tools & Techniques (continued)
Strategies for Both Threats and Opportunities

Acceptance - Indicates that the project team has decided not to change
the project management plan to deal with a risk or is unable to identify any
other suitable response strategy
Contingent Response Strategy

Risk Contingency Planning: Prepare a plan of action in case the risk occurs
Contingency Allowance or Risk Reserve - The amount of money or time
needed above the estimate to reduce the risk of overruns of project
objectives to a level acceptable to the organization (most usual acceptance
response)
www.pdfmailer.com
PDFMAILER.COM
6. Control Risk
Risk Monitoring & Control;
Process of identifying, analyzing, and planning for new risk, tracking identified risks and
those on the Watch-list, monitoring residual risks, reanalyzing existing risk, monitoring
trigger conditions for contingency plans, and reviewing the execution of risk responses
while evaluating their effectiveness throughout the project life cycle
www.pdfmailer.com
PDFMAILER.COM
Control Risk
Risk monitoring and control can involve:
Choosing alternative strategies
Executing a contingency or fallback plan
Tracking corrective action
Modifying the project management plan
Updating the organizational process assets
Risk monitoring & Control is an ongoing process for the life of the project.
Risks change as the project matures, new risks develop, or anticipated risks
disappear
www.pdfmailer.com
PDFMAILER.COM
Risk Management Is a Continuous Process

After the risk response plan is prepared, continue to:
Identify new risks, which may result from:
Changes in client/project sponsor, technology, organization, resources
Resurfacing of old risks
Time
Evaluate previously identified risks
Still possible?
Same probability and impact?
Mitigate
Is mitigation still appropriate?
Are actions required for this strategy?
Are backup strategies appropriate?
Document
Continuously keep current, accurate, complete, and simple
Communicate
www.pdfmailer.com
PDFMAILER.COM
Risk Closure
Closing risks deals with the final resolution of a risk that either has occurred or
is no longer considered to be a significant threat to the project
v Document the rationale for closure in the risk definition work product
v Focus on information that can be used later, either within the current
project or by future projects; examples of the type of information to be
captured include:
Successful containment plans and why they were successful
Failed containment plans and the reasons for their failure
Risk relationships and dependencies that were not obvious
Relevant data from various analyses, especially costs and benefits of
mitigation plans
v Close the risk
Update the status of the risk in the risk register
www.pdfmailer.com
PDFMAILER.COM
Project Manager's Role in Risk Management

Identifying and understanding risks
Planning to handle risks
Incorporating risk management into the
project management planning processes
Using the right tools to fit the situation
Monitoring and controlling risk on a regular
basis
Looking forward and being proactive
Communicating effectively about risk to
appropriate project stakeholders
Maintaining Risk Management Plan
documentation
Team focus, especially across functional lines
www.pdfmailer.com
PDFMAILER.COM
55

PMBody of Knowledge (Risk) Leangroup Org

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PMBody of Knowledge (Risk) Leangroup Org

Uploaded by

Copyright:

Available Formats

Print and send PDF files as Emails with any application, ad-sponsored and

Project Management Body

Project Risk Management

A risk can be defined as a possible undesirable and unplanned

Risk has three components:

Known-Unknown - An item containing identifiable uncertainty

What Is Project Risk Management?

v It includes maximizing the probability and consequence of positive events

Why Project Risk Management?

To improve odds of defining and developing winning projects outcomes,

The purpose of project risk management is to:

Risk Management has Six Major Processes

Step 2:Identify Risk

Step 3: Perform Qualitative Risk Analysis

Step 4: Perform Quantitative Risk Analysis

Step 5: Plan Risk Response

Step 6: Monitor and Control Risk

Plan Risk Management

Plan Risk Management should be completed early during project

Plan Risk Management : Outputs

Risk Management Plan: Output (continued)

Risk Management Plan: Output (continued)

Revised stakeholders' tolerances - As they apply to the specific project,

Sources For Identifying Project Risk

Risk Category is a group of potential causes of risk; risk causes

Risk Breakdown Structure (RBS) is a hierarchically

Risk Breakdown Structure (RBS)

Requirements Project Subcontractors

Technology Planning Resources Regulatory

Risk Identification is an iterative process because new risks may

The Risk Identification process usually leads to the Qualitative Risk

It also could lead directly to the Quantitative Risk Analysis process

Identify Risk: Tools & Techniques

Identify Risk : Tools & Techniques (continued)

Identify Risk : Tools & Techniques (continued)

Cause and Effect Diagram

Identify Risk : Output

Perform Qualitative Risk Analysis

Qualitative Risk Analysis;

Qualitative Risk Analysis

Qualitative Risk Analysis: Inputs

Risk Management Plan

Qualitative Risk Analysis: Tools & Techniques

Assign risk analysis tasks to appropriate team members

Qualitative Risk Analysis: Tools & Techniques (continued)

Probability and Impact Matrix

Severity of a Risk Event (Risk Score) =

Low Low Moderate Moderate

A matrix is a tool to represent the combination of the probability and impact

Qualitative Risk Analysis: Tools & Techniques (continued)

Risk categorization - Allows for categorizing project risks to determine

Risk urgency assessment - Review risk requiring near-term responses

Qualitative Risk Analysis: Outputs

Qualitative Risk Analysis: Outputs (continued)

Risk Register - the updates include:

List of risks for additional analysis and response - Some risks

4. Perform Quantitative Risk Analysis

Quantitative Risk Analysis;

Quantitative Risk Analysis

Quantitative Risk Analysis : Tools & Techniques

Data Gathering and Representation Techniques

Quantitative Risk Analysis Tools & Techniques (continued)

Quantitative Risk Analysis Tools & Techniques (continued)