Slides 11
Slides 11
March 2023
Project Risk Management
Learning Objectives
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is risk?
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is risk?
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Global Issues
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Importance of Project Risk Management
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Best Practice
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Importance of Project Risk Management (5 of
7)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Importance of Project Risk Management (6 of
7)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Advice for Young Professionals
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Importance of Project Risk Management (7 of
7)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Planning Risk Management (2 of 3)
• Additional plans
• Contingency plans: predefined actions that the project team will take
if an identified risk event occurs
• Fallback plans: developed for risks that have a high impact on
meeting project objectives, and are put into effect if attempts to
reduce the risk are not effective
• Contingency reserves or allowances: funds included in the cost
baseline that can be used to mitigate cost or schedule overruns if
known risks occur
• Management reserves: funds held for unknown risks that are used
for management control purposes
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Planning Risk Management (3 of 3)
Topic Questions to Answer
Methodology How will risk management be performed on this project? What tools and data
sources are available and applicable?
Roles and responsibilities Which people are responsible for implementing specific tasks and providing
deliverables related to risk management?
Budget and schedule What are the estimated costs and schedules for performing risk-related activities?
Risk categories What are the main categories of risks that should be addressed on this project? Is
there a risk breakdown structure for the project? (See the information on risk
breakdown structures later in this chapter.)
Risk probability and impact How will the probabilities and impacts of risk items be assessed? What scoring
and interpretation methods will be used for the qualitative and quantitative
analysis of risks? How will the probability and impact matrix be developed?
Revised stakeholders’ Have stakeholders’ tolerances for risk changed? How will those changes affect the
tolerances project?
Tracking How will the team track risk management activities? How will lessons learned be
documented and shared? How will risk management processes be audited?
Risk documentation What reporting formats and processes will be used for risk management
activities?
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Common Sources of Risk on IT Projects (2 of 3)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Common Sources of Risk on IT Projects (3 of 3)
Knowledge Area Risk Conditions
Integration Inadequate planning; poor resource allocation; poor integration management; lack of post-
project review
Scope Poor definition of scope or work packages; incomplete definition
Time Errors in estimating time or resource availability; errors in determining the critical path; poor
allocation and management of float; early release of competitive products
Cost Estimating errors; inadequate productivity, cost, change, or contingency
Quality Poor attitude toward quality; substandard design, materials, and workmanship; inadequate
quality assurance program
Human resource Poor conflict management; poor project organization and definition of responsibilities;
absence of leadership
Communications Carelessness in planning or communicating
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Identifying Risks (1 of 5)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Identifying risks: tools and techniques
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Identifying Risks (2 of 5)
• Brainstorming
• Group attempts to generate ideas or find a solution for a specific
problem by amassing ideas spontaneously and without judgment
• An experienced facilitator should run the brainstorming session
• Be careful not to overuse or misuse brainstorming
• Psychology literature shows that individuals produce a greater number of ideas
working alone than they do through brainstorming in small, face-to-face groups
• Group effects often inhibit idea generation
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Identifying Risks (3 of 5)
• Delphi Technique
• Used to derive a consensus among a panel of experts who make
predictions about future developments
• Provides independent and anonymous input regarding future events
• Uses repeated rounds of questioning and written responses and
avoids the biasing effects possible in oral methods
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Identifying Risks (4 of 5)
• Interviewing
• Fact-finding technique for collecting information in face-to-face,
phone, e-mail, or virtual discussions
• Interviewing people with similar project experience is an important
tool for identifying potential risks
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Identifying Risks (5 of 5)
• SWOT analysis
• Strengths, weaknesses, opportunities, and threats
• Helps identify the broad negative and positive risks that apply to a
project
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Risk Register (1 of 4)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Risk Register (2 of 4)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Risk Register (3 of 4)
No. Rank Risk Description Category Root Triggers Potential Risk Probability Impact Status
Cause Responses Owner
R44 1
R21 2
R7 3
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Risk Register: Sample Risk (4 of 4)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Individual Assignment: Cause and effect and Risk
Mitigation
Within 30 minutes
Please refer to the following assignment in Canvas:
• Understanding cause and effect - Fishbone diagram
• Applying risk mitigation through the risk register
Performing Qualitative Risk Analysis
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Using Probability/Impact Matrixes to Calculate Risk
Factors (1 of 3)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Using Probability/Impact Matrixes to Calculate Risk
Factors (2 of 3)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Using Probability/Impact Matrixes to Calculate Risk
Factors (3 of 3)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Media Snapshot
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Performing Quantitative Risk Analysis
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Decision Trees and Expected Monetary Value (EMV)
(1 of 2)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Decision Trees and Expected Monetary Value (EMV)
(2 of 2)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Individual Expected Monetary Value Exercise:
Within 15 minutes
Please refer to the following assignment in Canvas:
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Planning Risk Responses (2 of 3)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Planning Risk Responses (3 of 3)
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Implementing Risk Responses
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Monitoring Risks
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Using Software to Assist in Project Risk
Management
Information Technology Project Management, Ninth Edition. © 2019 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Risk Management Plan Exercise:
Within 30 minutes
Please refer to the following assignment in Canvas: