Welcome! A Critical Tool of the Project Manager. What People Are Doing 9/15/2016. Risk Management A Critical Tool

Size: px

Start display at page:

Download "Welcome! A Critical Tool of the Project Manager. What People Are Doing 9/15/2016. Risk Management A Critical Tool"

Damian Stone
5 years ago
Views:

1 Welcome! A Critical Tool of the Project Manager Presented by Jeff Nielsen PgMP, PMP, PMI-ACP, PMI-RMP, MSCIS Senior Instructor, RMC Learning Solutions 1 What People Are Doing RMC Learning Solutions. All rights reserved. 1

4 Risk Management Process 1. Plan Risk Management 2. Risk Identification 3. Perform Qualitative Risk Analysis 4. Perform Quantitative Risk Analysis 5. Plan Risk Responses 6. Control Risk 7 Tools to Use RMC Learning Solutions. All rights reserved. 4

Tolerances 9 Historical Risk Information

6 Project Risk Threshold Total amount of risk the company will accept on the project; takes the form of a maximum project risk score on a predetermined scale 11 Risk Tolerances How much risk an individual or group is willing to take on RMC Learning Solutions. All rights reserved. 6

enough resources We don t have enough time Since upper management does

7 Risk Identification Tools Cause-Risk-Effect Format Affinity Diagrams Risk Breakdown Structure (RBS) Pre-Mortem 13 Identifying Risks We don t have enough resources We don t have enough time Since upper management does not support the project RMC Learning Solutions. All rights reserved. 7

8 Not Naming Risks Properly Is lack of resources a risk? 15 Threat: Cause-Risk-Effect Format Cause Threat Effect Due to/as a result of (definitive cause) may occur (uncertain event) which would/could lead to (effect) Due to a lack of understanding of a country s customs A server failure a project manager may unintentionally offend the customer could result in one hour s worth of transactions not being available on the fail-over server which may result in difficulty managing the relationship causing the end user to revert to manual processes RMC Learning Solutions. All rights reserved. 8

9 Opportunity: Cause-Risk-Effect Format Cause Opportunity Effect Due to/as a result of (definitive cause) May occur (uncertain event) which would/could lead to (effect) Due to program products including new features Changes in customer requirements design and development of additional code may not be necessary may include components already included in the project which could result in a shorter schedule and less money needed to complete the project thereby increasing the market and interest in the product 17 Exercise: Cause-Risk-Effect Take one or two of your risks and write them in the cause-risk-effect format Notice how when they are written better, you can identify actions to take to deal with the risk Duration: 5 minutes RMC Learning Solutions. All rights reserved. 9

Risk Breakdown Structure Organizes the categories of risks Risk Breakdown

13 Risk Breakdown Structure RBS 2 Pre-Mortem Similar to a brainstorming session Meeting to gather ideas by imagining the project is complete or terminated and has failed to meet one or more objective The group: Describe why the project failed 26 To find opportunities, imagine that the project succeeded RMC Learning Solutions. All rights reserved. 13

Pre-Mortem Example Use the office move scenario Imagine it was successful: What led to that success (opportunities)? Imagine it was unsuccessful: What led to that failure (threats)?

14 Pre-Mortem Example Use the office move scenario Imagine it was successful: What led to that success (opportunities)? Imagine it was unsuccessful: What led to that failure (threats)? Share some of the risks you identified Duration: 5 minutes 27 Risk Qualitative Analysis Tools Probability/Impact (P/I) Matrix Risk Score Risk Urgency Assessment P/I or Bubble Chart RMC Learning Solutions. All rights reserved. 14

15 Probability/Impact Matrix Probability: Likelihood a risk will occur Impact: Effect a risk will have if it occurs 29 Probability/Impact Matrix Warning: High, medium and low scales RMC Learning Solutions. All rights reserved. 15

Assessment How quickly must you react to the risk?

16 Risk Score Project score is based on the average scores for all risks on the project Project Risk Score 31 Risk Urgency Assessment How quickly must you react to the risk? 32 (Continued on next slide) RMC Learning Solutions. All rights reserved. 16

17 Probability/Impact Chart Qualitative Risk Analysis Why not come up with a faster way to sort risks and have fun at the same time? 33 Probability/Impact Chart Bubble Chart Compares 3 factors at once 10 Probability 8 Impact 6 Urgency (Larger circles, 4 more urgent) Probability Impact RMC Learning Solutions. All rights reserved. 17

18 Risk Quantitative Analysis Tools Risk Exposure Decision Trees 35 Risk Exposure The level of risk a project has based on the plans for dealing with risk RMC Learning Solutions. All rights reserved. 18

Decision Tree 37 Decision Tree Solution 38 2016.

risks that come about or risks that remain because of the response

20 Risk Response Planning Tools Secondary and Residual Risks Contingency Reserves Risk Owners Triggers 39 Secondary and Residual Risks New risks that come about or risks that remain because of the response you take to a risk RMC Learning Solutions. All rights reserved. 20

22 Triggers Look for early warning signs that a risk has occurred, or is about to occur 43 Control Risk Tools Workarounds Risk Reassessments Risk Audits and Reviews RMC Learning Solutions. All rights reserved. 22

Workarounds Unplanned responses to risks 45

existing risks and update the risk register 46

Risk Audits and Reviews Lessons learned about

suggestions for improvement 47 Summary 48 2016.

For the PMP Exam using PMBOK Guide 5 th Edition. PMI, PMP, PMBOK Guide are registered trade marks of Project Management Institute, Inc.

For the PMP Exam using PMBOK Guide 5 th Edition PMI, PMP, PMBOK Guide are registered trade marks of Project Management Institute, Inc. 1 Contacts Name: Khaled El-Nakib, MSc, PMP, PMI-RMP URL: http://www.khaledelnakib.com