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7 views

Week 8 PPT Slides PM

Uploaded by

anmoldeepkaur200496
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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PROJECT MANAGEMENT

PILON SCHOOL OF BUSINESS

CHAPTER 7
ASSESSING RISK
CHAPTER OUTCOMES

 Identifying risks
 Planning for risks
 Using risk analysis techniques
Responding to risk
Contingency planning
Creating the risk management plan
AGENDA
Chapter 9: Identifying Risks

In Class : In class Activity 7


VIDEO
HTTPS://WWW.YOUTUBE.COM/WATCH?V=AE5GM73GSEU
IDENTIFYING RISKS

Risk is a potential event that poses a


negative threat or potential
opportunity to the project.
Risks can be opportunities in disguise.

5
IDENTIFYING RISKS

Risk management is a multi-step process.


1. Identify risk.
2. Analyze risk.
3. Determine probability.
4. Create a risk response plan.
Risk management occurs throughout
project life.

6
IDENTIFYING RISKS

Three common categories of risk:


Known risks
Known risks with uncertain
outcomes
Unknown risk

7
IDENTIFYING RISKS

Known risks have predictable


outcomes and are easier to plan for.
Known risks with uncertain outcomes
may need more than one response
plan and are more difficult to plan for.
Unknown risks require contingency
plans.
8
IDENTIFYING RISKS

Look for risks among the following:


Constraints
WBS and activity List
Critical success factors
Business risks
External project risks

9
IDENTIFYING RISKS
Examples of business risks
include:
Marketability
Timing
Management issues
Vendor/contractor delays

10
IDENTIFYING RISKS

Identification techniques include:


Historical information
Brainstorming
Delphi technique
Nominal group technique
Interviewing
Checklists

11
IDENTIFYING RISKS

12
IDENTIFYING RISKS

13
RISK ANALYSIS TECHNIQUES

Risk probability is the likelihood that


an event will occur.
Examine all risks on the risk
identification list and assign a
probability score.
Can use High-Med-Low or values
that are less than 1 (generally
expressed as a percent).
14
RISK ANALYSIS TECHNIQUES

Risk number Risk Event Probability

1 Snow on the night High


of the event

2 Awards are not Low


delivered in time
for the event
3 Guest speaker is Med
detained

4 Banquet hall not Med


set up properly for
presentation 15
RISK ANALYSIS TECHNIQUES

Risk impact is the consequences


that occur if the risk event comes
about.
Risk impact can be expressed as
High-Med-Low or as a value.

16
RISK ANALYSIS TECHNIQUES

Risk probability and risk impact High-Med-


Low rankings can be expressed as a
percent. For example:
High = .80
Medium = .40
Low = .20
Can also be further defined with Very low-
Low-Medium-High-Very High

17
RISK ANALYSIS TECHNIQUES

Probability impact matrix multiplies the


probability score by the impact value to
determine an overall risk score.
Probability = .80 x impact = .40 = .32
overall risk score
Risks with higher overall risk scores should
have risk response plans.

18
RISK ANALYSIS TECHNIQUES

Ratings for impact and


probability, i.e., High = .80,
should be determined by subject
matter experts or project team
members with previous
experience on similar projects.

19
VIDEO : WHAT RISK IDENTIFICATION TECHNIQUES ARE
AVAILABLE, AND WHICH IS THE BEST ONE?
HTTPS://WWW.YOUTUBE.COM/WATCH?V=GGYBOISFULQ
PI MATRIX

Risk Risk Event Probability Impact Risk score


num-
ber
1 Snow on the .80 .60 .48
night of the
event
2 Awards are not .05 .20 .01
delivered in
time for the
event
3 Guest speaker .40 .60 .24
is detained
4 Banquet hall .40 .80 .32
not set up
properly for 21
presentation
RISK ANALYSIS TECHNIQUES

Risk attitude is the amount of


risk a person or organization is
willing to tolerate in exchange for
the perceived or actual benefits
of partaking in the activity.
Risk attitude consists of risk
appetite and risk threshold.
22
ASSESSING RISK

Five strategies for reducing or


controlling negative risks:
Escalate
Accept
Avoid
Transfer
Mitigate
23
ASSESSING RISK

Escalate techniques are


generally outside the boundaries
of the project or, the risk
response plan is beyond the
authority of the project manager
to implement and resolve.

24
ASSESSING RISK

Accepting a risk means the


organization is willing to accept
the consequences of a risk should
it occur.
Accepting strategy includes:
Workarounds
Contingency plans
25
ASSESSING RISK

Avoiding a risk involves taking


steps to avoid the impact of the
risk event or eliminating its
cause.
Avoiding deals with risks before
they occur—acceptance deals
with risks after they occur.
26
ASSESSING RISK

Transferring risks transfers the


responsibility for the management
of the risk event to a third party.
Insurance is the classic example
of transferring.
Contracting is also a form of
transferring.
27
ASSESSING RISK

Mitigation is a strategy that attempts


to reduce the impact of the risk event
by reducing the probability of the risk
occurrence.
Or
Reducing the impact of the risk event
to an acceptable level

28
ASSESSING RISK

Positive risk response strategies include:


Escalate
Exploit
Share
Enhance
Accept
Positive risk response strategies are not
used as often as negative response
strategies. 29
ASSESSING RISK

Exploit = looking for opportunities for


positive impacts.
Share = assigning the risk to a third
party owner to bring out the best
opportunities.
Enhance = watch the probability and
impact closely to assure organization
realizes benefits of the risk.
30
ASSESSING RISK

Contingency planning is a process for


planning for known risks to help
ensure project success if the risk
event occurs.
Similar to risk avoidance and
mitigation
Can develop contingency plans for
individual risks or a group of risks.
31
ASSESSING RISK

Residual and secondary risks may


occur after a risk event.
Residual risk = leftover impacts from
the main risk event.
Secondary risk = occurs as a result of
implementing a risk response plan.

32
ASSESSING RISK

Risk management plan


documents how risks will be
identified, managed, and how
the response plans will be
developed.

33
RECAP OF RISK PROCESS

Identify risk.
Analyze risks for probability and impact.
Calculate risk score.
Create response plans.
Create contingency plans.
Document.

34
RISK DIRECTORY

Risk register includes:


A reference number
Name of risk
Whether a plan was created
Where the plan is located
Risk owner
35
RISK REGISTER

Ris Risk Risk Risk Plan Risk


k ID score plan location owner
1 Snow on the night of the event .48 Y Click here for Noelle Butler
response plan

2 Awards are not delivered in .01 N See contingency David Walters


time for the event plan

3 Guest speaker is detained .24 Y Click here for Trent Jacobs


response plan

4 Banquet hall not set up to .32 Y Click here for Kate Newman
accommodate presentations response plan

36
WHAT IS DELPHI METHOD
NOMINAL GROUP TECHNIQUE
VIDEO : HOW TO MAKE A RISK ASSESSMENT
MATRIX IN EXCEL
HTTPS://WWW.YOUTUBE.COM/WATCH?V=KIS4L4KN0RM
ANY QUESTIONS?
What next…

Developing The Project Plan: CH 8,


Budgeting: CH 9

- In-Class Activity #8

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