26/09/2016

Risk Modules

 Theory – AMM
 Risk Workshop - You

Introduction

 Originally by Jeremy Bourdon

 Arup
 Risk Manager

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What is Risk Management???

Threat Consequence
Fantasy
Hazard
Optimism
Uncertainty

Opportunity Qualitative
Risk

Probability Variability
Dodgy

Smoke ‘n
Contingency Mirrors
Quantitative

Definition – Risk (1)

The sugar and salt of life

Chartered Insurance Institute

Effect of uncertainty on objectives

ISO 31000

An uncertain event or condition that, if it occurs, has a

positive or negative effect on an objective. A risk has a cause
and, if it occurs, a consequence
PMBOK@Guide

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Definition – Risk (2)

Risk Event

Cause Effect (+/-)

•Change in legislation •Cost
•Supplier liquidation •Schedule
•Contractor insolvency •Safety
•Ground conditions •Quality
•Reputation

Business Landscape

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Project Risk In Context

Strategic/Corporate
risk

Project Health &

risk Safety
risk

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Why Manage Project Risk?

 Better informed decisions

 To make project safer and more secure
 To avoid waste – of time, money or materials
 To identify contingencies
 For peace of mind
 It may make the project quicker, cheaper or more
efficient than it might have been
 Abandonment of non-viable projects

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IRM Risk Management Process

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Time Benefit Analysis of PRM

opportunity to
minimise risk
& maximise value

impact of risk
& late changes

Feasibility Concept Scheme Detailed Design Construction

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Risk Identification/Description

Clear Definition of Risk Discipline

There is a risk that ______________

Caused by _____________________

Resulting in ____________________

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Risk Assessment

PxI=R
Probability x Impact = Risk

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Probability Impact Grid (PIG)

HIGH
PROBABILITY
OVER 50% M H H
MEDIUM
PROBABILITY
20% TO 50% M M H
LOW
PROBABILITY
0% TO 20% L M M
LOW COST, MEDIUM COST, HIGH COST,
TIME, TIME, TIME,
PEFORMANCE PERFORMANCE PERFORMANCE
IMPACT IMPACT IMPACT

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Risk Response – The Four T’s

Tolerate Terminate

Treat
Transfer

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The Purpose Is To Reduce Risk

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What Is A Project Risk Register?

 A body of information listing all the risks identified

for the project
 It explains the nature of each risk and
 It records information relevant to the risk’s
assessment and management

 Example

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Risk Register

 Key information:
- I.D.
- Date created
- Created by
- Owner Category  Main risk control document
- Title
- Description  Should be subject to regular
- Cause
- Effect
review throughout project
- Threat / Opportunity
- Probability  Risks need to be closed out at
- Urgency (proximity) end of project
- Risk Response Plans incl. Actions
- Contingency
- Actions due date
- Review dates

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Risk Round Up

 Risk has both positive- Opportunity

and Negative- Threat
 Magic Formula: Probability x Impact = Risk
 Uncertainty v Risk Event
 The sooner Risk Management is applied the more
effective it is
 Many ways to respond to a risk (The Four T’s)
 Communicate Communicate Communicate
Questions?
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Phase Related Risks

Concept & Design & Manufacturing Installation & Operation & Decommissioning
definition development commissioning maintenance
& disposal

Bid / no bid Trade-offs Subcontractors Drawings Dependability Safety

Budgets Make / buy Materials Integration Safety Replacement
Safety Performance Resources Performance Interoperability Salvage
Warranties Producibility Integration Dependability Modifications Scrap
Technology Technology Configuration Safety Penalties Penalties
changes
Contracts Dependability Testing Legislation Inherited risks
Dependability
Regulatory Information Procedures Guarantees
requirements sources Penalties
Penalties Inherited risks
Project Contracts Safety
Guarantees
management
Penalties Inherited risks
Inherited risks
Safety
Inherited risks

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