Project Risk Management: Example: Company Trip

SMSVN PMP Training Course 2013 Chapter 11
Prepared by Nguyen Quy Son - 20/08/2013
PROJECT RISK MANAGEMENT
Example: Company Trip
Identify Response Owner
Risk is an uncertain event or condition that, if occurs, has an effect on at least one project objective. Issue is a point or matter in question or in dispute. Threat: Negative risks Opportunities: Positive risks Risk management objectives:
increase the probability and impact of positive events (opportunities). decrease the probability and impact of negative events (threat).
Risk Attitudes
Risk Averse: people are not comfortable with risks; they are
willing to avoid the risks, doesnt like risk.
Risk Neutral: people manage risks based on their expected

value, that is, probability times impact. In other words, their decisions towards risks are not biased by any other factors, except for the risks expected value.
Risk Seeker: people see risks as challenges and feel exciting

dealing with them.
Risk Tolerant: people are indifferent about risks. This means

they do not pay much attention to risks, until these risks become real problems.
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11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Responses 11.6 Control Risks

Knowledge Area
Process
Initiating Planning Executing Monitoring & Contol Closing
Project Risk Management
11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Responses
11.6 Control Risks
11.1 PLAN RISK MANAGEMENT
Plan Risk Management is the process of defining how to conduct risk management activities for a project.
Inputs Tool&Techniques Outputs
.1 Project management plan .2 Project charter .3 Stakeholder register .4 EEFs .5 OPAs
.1 Analytical techniques .2 Expert judgment .3 Meetings
.1 Risk management plan
Risk Management Plan include:

Methodology. Roles and responsibilities. Budgeting. Timing. Risk categories.

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11.1 PLAN RISK MANAGEMENT
Risk categories: Provide a means for grouping potential causes of risk. Several approaches can be used, for example, a structure based on project objectives by category
Example of a Risk Breakdown Structure (RBS)

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11.2 IDENTIFY RISKS
Identify Risks is the process of determining which risks may affect the project and documenting their characteristics.
Tool&Techniques .1 Documentation reviews .2 Information gathering techniques .3 Checklist analysis .4 Assumptions analysis .5 Diagramming techniques .6 SWOT analysis .7 Expert judgment Outputs .1 Risk register
Inputs .1 Risk management plan .2 Cost management plan .3 Schedule management plan .4 Quality management plan .5 Human resource management plan .6 Scope baseline .7 Activity cost estimates .8 Activity duration estimates .9 Stakeholder register .10 Project documents .11 Procurement documents .12 EEFs .13 OPAs
11.2 IDENTIFY RISKS
SWOT Analysis: This analysis looks at the project to identify its strengths and weaknesses and thereby identify risks (opportunities and threats).
11.2 IDENTIFY RISKS
Risk Register
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11.3 PERFORM QUALITATIVE RISK ANALYSIS
Perform Qualitative Risk Analysis is the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact.
Inputs Tool&Techniques Outputs
.1 Risk management plan .2 Scope baseline .3 Risk register .4 EEFs .5 OPAs
.1 Risk probability and impact assessment .2 Probability and impact matrix .3 Risk data quality assessment .4 Risk categorization .5 Risk urgency assessment .6 Expert judgment
.1 Project documents updates
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11.3 PERFORM QUALITATIVE RISK ANALYSIS
Probability and Impact Matrix
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11.4 PERFORM QUANTITATIVE RISK ANALYSIS
Perform Quantitative Risk Analysis is the process of numerically analyzing the effect of identified risks on overall project objectives.
Inputs .1 Risk management plan .2 Cost management plan .3 Schedule management plan .4 Risk register .5 EEFs .6 OPAs
Tool&Techniques .1 Data gathering and representation techniques .2 Quantitative risk analysis and modeling techniques .3 Expert judgment
Outputs .1 Project documents updates
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11.4 PERFORM QUANTITATIVE RISK ANALYSIS

Expected monetary value analysis Expected monetary value (EMV) = Probability * Impact
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11.5 PLAN RISK RESPONSES
Plan Risk Responses is the process of developing options and actions to enhance opportunities and to reduce threats to project objectives.
Inputs .1 Risk management plan .2 Risk register
Tool&Techniques .1 Strategies for negative risks or threats .2 Strategies for positive risks or opportunities .3 Contingent response strategies .4 Expert judgment
Outputs .1 Project management plan updates .2 Project documents updates
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Strategies for Negative Risks or Threats
Avoid: Changing the project management plan to eliminate the threat entirely: extending the schedule, changing the strategy, or reducing scope Transfer: Make another party responsible for the risk by purchasing insurance, performance bonds, warranties, or guarantees or by outsourcing the work. Mitigate: Taking early action to reduce the probability and/or impact of a threat Accept: Do nothing and say, If it happens, it happens:
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Strategies for Positive Risks or Opportunities
Exploit: Add work or change the project to make sure the opportunity occurs. Enhance: Increase the likelihood (probability) and/or positive impacts of the risk event. Share: Allocate ownership of the opportunity to a third party (forming a partnership, team, or joint venture) that is best able to achieve the opportunity Accept: Do nothing and say, If it happens, it happens:
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Contingency plans are plans describing the specific actions that will be taken if the opportunity or threat occurs. Secondary risks that arise as a direct outcome of implementing a risk response. Residual risks These are the risks that remain after risk response planning. Fallback plans These plans are specific actions that will be taken if the contingency plan is not effective. Contingency reserves that are calculated based on the quantitative risk analysis of the project and the organizations risk thresholds. Risk response owners A key concept in risk response planning is that the project manager does not have to do it all and neither does the team.
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11.6 CONTROL RISKS
Control Risks is the process of implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks, and evaluating risk process effectiveness throughout the project.
Tool&Techniques Outputs
Inputs
.1 Project management plan .2 Risk register .3 Work performance data .4 Work performance reports
.1 Risk reassessment .2 Risk audits .3 Variance and trend analysis .4 Technical performance measurement .5 Reserve analysis .6 Meetings
.1 Work performance information .2 Change requests .3 Project management plan updates .4 Project documents updates .5 Organizational process assets updates
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SMSVN PMP Training Course 2013 Chapter 11

Prepared by Nguyen Quy Son - 20/08/2013