Learning Objectives. Manage Your Project Risks Like a Pro! 10/16/2015

Transcription

1 Manage Your Project Risks Like a Pro! SPEAKERS: Zahid Khan, PE, PMP PMO Manager King County Solid Waste Division Shobuz Ikbal, PMP, PE Learning Objectives At the end of this session attendees will be able to: Describe importance of project risks management Discuss risk management planning approach Apply risk management and mitigation strategies to projects 1

2 Presentation Outline Understanding project risks Project Risk Management steps Formal vs. Informal risk management Recommendations APWA FALL 2015 CONFERENCE Presentation Outline Understanding project risks Project Risk Management steps Formal vs. Informal risk management Recommendations APWA FALL 2015 CONFERENCE 2

3 What is Risk? Risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives. This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) - Fifth Edition, Project Management Institute, Inc., 2013, Page 559. Risk Case Study #1: Pedestrian Bridge, Sparwood, BC 300 ft steel bridge on Elk River Risk: Unknown mitigation measures for environmental clearance 3

4 Risk case study #1: Pedestrian Bridge, Sparwood, BC Mitigation measures: 1. Fish habitat restoration 2. Head clearance for fisherman Case Study # 2: New Water System, Mestia, Georgia River intake Water treatment plant on hillside Risk:? 4

5 Case Study # 2: New Water System, Mestia, Georgia Top soil not available locally 10x increase in cost Construction delay Project Risk Observations Risks are always uncertain Categories of risks Types of risks Risk mitigation 5

6 Positive risks Negative risk Known-unknown Unknown-unknown Risk Categories Types of Risks Technical External Organizational Project Management 6

7 Presentation Outline Understanding project risks Project Risk Management steps Formal vs. Informal risk management Recommendations APWA FALL 2015 CONFERENCE What is Project Risk Management? Project risk management can be viewed as a series of activities that are planned to achieve success by proactively integrating risk evaluation in the selection of alternatives, and then controlling the risks associated with the implementation of the selected alternative. NASA, (2013). Agency Risk Management Procedural Requirements. [Electronic Version] Retrieved on August 14th, 2013 from 7

8 Project Risk Management Steps Plan Risk Management Identify risks Qualify and quantify risks Develop risk response strategies Estimate risk management costs Plan Risk Management Define how to approach, plan, execute, and monitor project risks Includes procedures and guidelines Initiate at the project start Perform in planning phase Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Fifth Edition, Project Management Institute, Inc., 2013, Page

9 Identify Risks which risks may affect the project and documenting their characteristics. Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Fifth Edition, Project Management Institute, Inc., 2013, Page 319. Purpose of Qualitative Risk Analysis Prioritize risks Focus on high exposure risks first Provide an early warning Develop risk response plan 9

10 Plan Risk Responses actions to enhance opportunities and to reduce threats Assign an owner to deal with risks Identify risk trigger Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Fifth Edition, Project Management Institute, Inc., 2013, Page Risk Based Scheduling Three-Point Estimating: Most Likely (ML) Optimistic (O) Pessimistic (P) Activity duration using weighted average = (O + P + 4ML) / 6 Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Fifth Edition, Project Management Institute, Inc., 2013, Page

11 Risk Champion A Risk Champion often initiates project risk management Initiated by project manager or a team member Can motivate team to handle risks Risk Management Reserve Contingency Reserve Amount of the budget needed above the estimate to reduce the overall risks Used for Known-Unknowns Management Reserve Fund used for Unknown-Unknowns Not a project expense (organizational expense) 11

12 Presentation Outline Understanding project risks Project Risk Management steps Formal vs. Informal risk management Recommendations APWA FALL 2015 CONFERENCE Formal vs. Informal Risk Management Formal Risk Management Policy Planned in Advance Proactive Strategic Response Monitoring Informal No formal plan Reactive Damage control 12

13 Case Study # 3 Informal Risk Management Des Moines Creek Basin Basin area square miles. Two branches, two main tributaries. 13

14 Des Moines Creek Plateau Reach Conceptual Plan 14

15 Geotechnical Investigation Discovery Of Arsenic! Two phased sampling Arsenic found in soil & groundwater Comprehensive planning to handle arsenic Arsenic transport modeling Voluntary Cleanup Program 15

16 Case Study # 3 Observations No formal Risk Management Plan Risks were identified during the design Risk mitigations were developed Project cost increased during the design 16

17 Lower Tolt River Case Study # 4: Formal Risk Management Floodplain Reconnection Project Lower Tolt River Floodplain Reconnection Project The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc. Snoqualmie River Tolt River The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc. 17

18 The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc. Campground Nov 7, 2006: Note Snoqualmie backwater influence 18

19 The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc. The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc. 19

20 Risk Register 20

21 Case Study # 4 Observations A Risk Management Plan was developed early Risks were identified during early design Risks were qualified for further analysis Response strategies were developed Contingency reserve funds allocated Formal vs. Informal Risks Formal Formal Risk Management Plan Risks identified early Contingency reserve fund Informal No formal Risk Management Plan Risks identified during design No contingency reserve fund 21

22 Presentation Outline Understanding project risks Project Risk Management steps Formal vs. Informal risk management Recommendations APWA FALL 2015 CONFERENCE Recommendations (1 of 2) Plan Risk Management Hold Risk Workshops Identify and qualify risks early Plan risk response Identify Risk Champions 22

23 Recommendations (2 of 2) Formal risk management is ideal. Informal risk management is better than no risk management. Senior management should foster a project management culture and empower employees to become risk champions. 23

24 Contact Information Zahid Khan, PE, PMP (206) Shobuz Ikbal, PMP, PE (206)