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05 Project Planning - Risk Management
05 Project Planning - Risk Management
Presented By:
Course Outline
1. 2. 3. 4. 5. 6. Project Management Framework Project Initiation Project Planning - Scope Definition Project Planning - Schedule Development Project Planning - Risk Management Project Planning - Budgeting
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Section 5
Managing Risk in projects
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Risk defined
Risk = An uncertain event or condition that, if it occurs, has a Positive or Negative effect on a project objective The severity of any risk can be defined in terms of two parameters: Likelihood (Probability): The extent to which the risk effects are likely to occur. Impact (Consequence): The effect that a risk will have on the project if it occurs.
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Maximizing the probability and consequences of positive events (Opportunities) to Project Objectives AND Minimizing the probability and consequences of adverse events (Threats) to Project Objectives
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Controlling
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Outputs
1. Risk Management Plan
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Budgeting:
Established budget for Risk Management
Timing
When and how often risk management process will be performed
Tracking
Describes how risk activities will be recorded for current project and lessons learned
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Risk Identification
Inputs
Enterprise environmental factors Organizations process assets Project scope statement Risk Management Plan Project management plan
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Outputs
1. Risks register
Personal experience
PM and project team
Interviews with:
Project managers in and out of the organization Experts: Technological, regional
Delphi technique
Collect and manipulate inputs from experts located in different places
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SWOT Analysis
Internal Factors
External factors Opportunities (O) Threats (T)
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Risk Sources
Schedule Tasks on the critical/near-critical path Optimistically estimated tasks Tasks reliant on external dependencies Resources Tasks with one individual working alone or many people Tasks using scarce resources or Under-skilled people Illness and turnover Budget Uncertainty of funds Shifts in budget priorities Uncertain resource costs Scope Uncertainty of new product development Dynamics of customer requirements
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Outputs
1. Risk register (updated)
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Probability M H
Impact L H
L L
L H
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M L L
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Risk Probability
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Outputs
1. 2. 3. Risk management plan Risk register Risk-related Contractual agreements
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Enhance
Opposite of Mitigation
Share
Opposite of Transfer
Acceptance
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2.
3.
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Prob.
Risk value
Risk Response
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Risk reserves
Contingency Reserve
Known unknowns expectable risks Accounts for: Amounts dedicated for contingency plans identified in the risk management process Residual risks that we decided to put aside when developing the risk management plan
Management Reserve
Unknown Unknowns un-expectable risks Accounts for items that we did not or could not identify in the risk management process
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