Professional Documents
Culture Documents
Risk Management
A project risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on at least one aspect of the project, that is, time, cost, scope or quality. Risk management identifies as many potential risks as possible, minimises their impact by doing whatever can be done before they occur to mitigate their effect, and makes contingency plans to deal with risks that actually occur, so that time and cost overruns on projects are avoided.
Project Management R.B. Khanna 2011 PHI Learning Pvt Ltd
Chance of Risk
Occurrence
Low
Project Management R.B. Khanna 2011 PHI Learning Pvt Ltd
Time
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Risk Identification
Documentation Reviews.
Information Gathering Techniques Checklist Analysis Assumptions Analysis Diagramming Techniques
Risk Assessment
Carry out qualitative analysis and prioritise risks. Carry out quantitative analysis of high priority risks.
Scenario Analysis
The undesirable event All the outcomes of the events occurrence The chance or probability that the event will occur The magnitude of the impact of the event on the project When the event might occur in the project Its inter-relationship with other parts of this project or other projects being undertaken by the organisation The ability to detect the event before its occurrence
Arbitrarily rated on a scale of 1 to 5, 1 being the least and 5 being the highest.
Project Management R.B. Khanna 2011 PHI Learning Pvt Ltd
Contingency Plans
Project Management R.B. Khanna 2011 PHI Learning Pvt Ltd
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Cost Risks
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Contingency Funds
Established to cover project risks. Split into budget and management reserve. Budget reserve covers identified risks and is allocated to specific segments or deliverables of the project Management reserve is set up to cover unidentified risks and is allocated to risks associated with the total project Controlled at different levels
Project Management R.B. Khanna 2011 PHI Learning Pvt Ltd
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Time Buffers
Set up to absorb the delays that may take place Extra time assigned for:
Activities with severe risk of time overruns. Merge activities that are prone to delay as some preceding activity might get delayed. Activities that use scarce resources, as the resource may not be available when required. Non-critical activities which may become critical if slacks are used by earlier activities on the path.
Project Management R.B. Khanna 2011 PHI Learning Pvt Ltd
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Managing Change
Goals of a change control system
Identify proposed changes. Identify effects of proposed change on budget and schedule. Review, evaluate and approve or disapprove changes formally. Negotiate and resolve conflicts arising from changes, especially in conditions and costs. Disseminate information to all concerned about the change. Assign responsibilities for implementing change. Adjust master schedule and budget. Track all changes that are to be implemented.
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