Lecture 7 - Identify Risks: Project Risk Management Ms (PM)

Lecture 7 – Identify Risks
Project Risk Management
MS (PM)
Scheme
2
 Identifying risks from different risk categories

 Risks in requirement gathering
 Scope risks
 Risks in defining deliverables
 Schedule risks
 Resource risks
 People risks
 Outsourcing risk
 Money risks
 Typical risks in construction industry
Bilal Atiq PMP & RMP PMI

Scheme
3
 Inputs  Tools & Techniques

 Project Management Plan  Expert Judgment
 Project Documents  Data Gathering
 Agreements  Data Analysis
 Procurement Documentation  Interpersonal and Team Skills
 EEF  Prompt Lists
 OPA  Meetings
 Outputs
 Risk Register
 Risk Report
 Project Document Updates

Risks in Requirement Gathering Scope Risks Defining Deliverables
Topics for the Process of Defining Deliverables

4
 Collect a list of topics from the

participants, (or get the list off a
boilerplate).
 It helps, if a number of questions can be

formulated for each topic.
 Some examples of the topics and

associated questions are shown on
coming slides.

5
Topic Question
Alignment with How does this project contribute to the stated high level
Business Strategy business objectives?
User and customer Has the project team captured the ultimate end-user
needs requirements?
Has the team identified all relevant regulatory, environmental
Compliance and manufacturing requirements, as well as the relevant industry
standards?
Has the team identified both current and projected alternatives
Competition
to the proposed deliverables?
Positioning Is there a clear and compelling benefit-oriented project objective

that supports the business case of the project?


6
Topic Question
Does this project team have an agreed-upon hierarchy of
Decision Criteria
measureable priorities for cost, time, quality and scope?
Are logistical requirements understood and manageable?
Delivery (includes machinery requirement and equipment availability on
time)
Sponsorship Does the management hierarchy collectively support the project,

and will it provide timely decisions and ongoing resources?
Does the project have, and will it continue to have, the staffing
Resources and funding needed to meet the project goals within the
allocated time?
Technical Risk Has the team assessed the overall level of risk it is taking and are
technical and other exposures well documented?
Sources of Schedule Risk Sources of Resource Risk People Risk
Sources of Schedule Risks

7
 Delay risks
 Dependency risks
 Estimating risks

Sources of Resource Risk

8
 Among the resource risks, the important few are:
 Manpower
 Information
 Machinery, equipment, software, components
 Money
 Time
 Establishment (physical and organizational
frameworks)
 Services (communication, transportation, legal)
 Access to consumable (power, fuel, food etc)
Types of People Risks

9
 Staff leaving the project permanently
 Staff leaving the project temporarily
 Staff joining the project late
 Non-dedicated staff
 Conflicts between simultaneously on-going

similar projects
 Low motivation / falling morale
 Internal policies
Outsourcing Risks Money Risks Typical Risks in Construction Industry
Outsourcing Risks
10
 Late delivery
 Violation of specified standards
 Protracted negotiations
 Turn over of service or product supplier

Outsourcing Risks Money Risks Typical Risks in Construction Industry
Money Risks
11
 Change in government
 Sudden change in national economic / financial

policy
 Displeasure of international funding sources, e.g.

World Bank, Asian Development Bank etc
This type of risk does not happen often, but when it

does, the effects are drastic.

12
Inputs – Tools & Techniques – Outputs
Since Identify Risks is an iterative process, the use of Inputs and Tools &
Techniques for Early identification, Iterative identification and Emergent
identification may have a slightly different focus.

Inputs: PMP PDs Agreements Procurement Doc EEF OPA
Project Management Plan

13
 Project management plan components used in Identify Risks process include

but are not limited to:
 Requirements Management Plan – May indicate project objectives that

are particularly at risk.
 Schedule Management Plan – May identify areas that are subject to

uncertainty or ambiguity.
 Cost Management Plan – May identify areas that are subject to

uncertainty or ambiguity.


14
 Quality Management Plan – May identify areas that are subject to

uncertainty or ambiguity, or where key assumptions have been made that
might give rise to risk.
 Resource Management Plan – May identify areas that are subject to

uncertainty or ambiguity, or where key assumptions have been made that
might give rise to risk.
 Risk Management Plan – Provides information on risk-related roles and

responsibilities, indicates how risk management activities are included in
the budget and schedule, and describes categories of risk, which may be
expressed as a RBS.

15
 Scope Baseline – Includes deliverables and criteria for their acceptance,

some of which might give rise to risk. It also contains the WBS, which can
be used as a framework to structure risk identification techniques.
 Schedule Baseline – The schedule baseline may be reviewed to identify

milestones and deliverable due dates that are subject to uncertainty or
ambiguity, or where key assumptions have been made that might give rise
to risk.
 Cost Baseline – The cost baseline may be reviewed to identify costs or

funding requirements that are subject to uncertainty or ambiguity, or
where key assumptions have been made that might give rise to risk.

Project Documents
16
 Project documents that can be considered as inputs for this process include but are
not limited to:
 Assumption Log – Assumptions and constraints recorded in the assumption log
may give rise to individual project risks and may also influence the level of overall
project risk.
 Cost Estimates – Provide quantitative assessments of project costs, ideally
expressed as a range, indicating the degree of risk, where a structured review of
the documents may indicate that the current estimate is insufficient and poses a
risk to the project.
 Duration Estimates – Provide quantitative assessments of project durations,
ideally expressed as a range, indicating the degree of risk, where a structured
review of the documents may indicate that the current estimate is insufficient
and poses a risk to the project.
Project Documents
17
 Issue Log – Issues recorded in the issue log may give rise to individual project risks
and may also influence the level of overall project risk.
 Lessons Learned Register – Lessons learned about risk identified from earlier phases
of the project are reviewed to determine whether similar risks might recur during the
remainder of the project.
 Requirements Documentation – Lists the project requirements and allows the team
to identify those that could be at risk.
 Resource Requirements – Provide quantitative assessments of project resource
requirements, ideally expressed as a range, indicating the degree of risk, where a
structured review of the documents may indicate that the current estimate is
insufficient and poses a risk to the project.
 Stakeholder Register – Indicates which individuals or groups might participate in
identifying risks to the project. It also details those individuals who are available to
act as risk owners.
Agreements
18
 If the project requires external

procurement of resources, the
agreements may have information such as
milestone dates, contract type,
acceptance criteria, and awards and
penalties that can present threats or
opportunities.

Procurement Documentation
19
 Contains records for administration of the procurement processes and includes the
SoW, payment information, contractor WPI, plans and other correspondence.
 If the project requires external procurement of resources, the initial procurement

documentation should be reviewed as procurement may increase or decrease overall
project risk and may introduce additional individual project risks.
 As documentation is updated throughout the project, the most up to date

documentation can be reviewed for risks, e.g. seller performance reports, approved
change requests and information on inspections.

Enterprise Environmental Factors

20
 EEFs that can influence the Identify Risks

process include but are not limited to:
 Published material, including commercial

risk databases or checklists
 Academic studies
 Benchmarking results
 Industry studies of similar projects

Organizational Process Assets

21
 OPAs that can influence the Identify Risks

process include but are not limited to:
 Project files, including actual data
 Organizational and project process

controls
 Risk statement formats
 Checklists from previous similar projects

T&Ts: Expert Judgment Data Gathering Data Analysis
Expert Judgment
22
 Expertise should be considered from individuals or groups with specialized

knowledge of similar projects or business areas.
 Such experts should be identified by the project manager and invited to

consider all aspects of individual project risks as well as sources of overall
project risk, based on their previous experience and areas of expertise.
 The experts’ bias should be taken into account in this process.

Data Gathering Techniques

23
Brainstorming
 Its goal is to obtain a comprehensive list of

individual project risks and sources of overall
project risk.
 Project team, along with a multidisciplinary

set of experts who are not part of the team,
usually performs brainstorming together.
 Attention should be paid to ensuring that

risks identified through brainstorming are
clearly described, since the technique can
result in ideas that are not fully formed.

24
Checklists
 It is a list of items, actions, or points to be considered.
 It is often used as a reminder.
 Risk checklists are developed based on historical information

and knowledge that has been accumulated from similar
projects and from other sources of information.
 They are an effective way to capture lessons learned from

similar completed projects, listing specific individual project
risks that have occurred previously and that may be relevant
to this project.

25
Checklists
 Organization may maintain a risk checklist based on its own

projects or may use generic risk checklists from the industry.
 Checklist is quick and simple to use, it is impossible to build

an exhaustive one, so care should be taken to ensure that it is
not used to avoid effort of proper risk identification.
 Project team should also explore items that do not appear on

the checklist.
 Additionally, the checklist should be reviewed from time to

time to update new information as well as remove or archive
obsolete information.

26
Interviews
 Individual project risks and sources of overall

project risk can be identified by interviewing
experienced project participants, stakeholders,
and SMEs.
 Interviews should be conducted in an

environment of trust and confidentiality to
encourage honest and unbiased contributions.

Data Analysis Techniques

27
Root Cause Analysis
 Used to discover underlying causes of a

problem and develop preventive action.
 Can be used to identify threats by starting with

a problem statement (e.g. the project might be
delayed or over budget) and exploring which
threats might result in that problem occurring.
 Same technique can be used to find

opportunities by starting with a benefit
statement and exploring which opportunities
might result in that benefit being realized.

28
Assumption and Constraint Analysis
 Every project and its project management plan

are conceived and developed based on a set of
assumptions and within a series of constraints.
 These are often already incorporated in the

scope baseline and project estimates.
 Assumption and constraint analysis explores the

validity of assumptions and constraints to
determine which pose a risk to the project.

29
Assumption and Constraint Analysis
 Threats may be identified from the inaccuracy,

instability, inconsistency, or incompleteness of
assumptions.
 Constraints may give rise to opportunities

through removing or relaxing a limiting factor
that affects the execution of a project or
process.


30
SWOT Analysis
 Examines the project from each internal

strengths, weaknesses, opportunities, and
threats (SWOT) perspectives.
 For risk identification, it is used to increase the

breadth of identified risks by including
internally generated risks.
 It starts with the identification of strengths

and weaknesses of the organization, focusing
on either the project, organization, or the
business area in general.

31
SWOT Analysis
 SWOT analysis then identifies any

opportunities for the project that may arise
from strengths, and any threats resulting from
weaknesses.
 The analysis also examines the degree to

which organizational strengths may offset
threats and determines if weaknesses might
hinder opportunities.


32
Document Analysis
 Risks may be identified from a structured

review of project documents, including, but
not limited to, plans, assumptions,
constraints, previous project files, contracts,
agreements, and technical documentation.
 Uncertainty or ambiguity in project

documents, as well as inconsistencies within a
document or between different documents,
may be indicators of risk on the project.

T&Ts: Interpersonal & Team Skills Prompt Lists Meetings
Interpersonal & Team Skills

33
 Interpersonal and team skills that can be used

for this process includes facilitation.
 It improves the effectiveness of many of the

techniques used to identify individual project
risks and sources of overall project risk.
 A skilled facilitator can help participants

remain focused on task, follow the method
accurately, ensure clear risk descriptions,
identify and overcome sources of bias and
disagreements that may arise.
Prompt Lists
34
 It is a predetermined list of risk categories

that might give rise to individual project
risks and that also act as sources of overall
project risk.
 It can be used as a framework to aid the

project team in idea generation.
 Risk categories in the lowest level of RBS

can be used as a prompt list for individual
project risks.

Prompt Lists
35
 Some common strategic frameworks are

more suitable for identifying sources of
overall project risk, for example:
 PESTLE (political, economic, social,

technological, legal, environmental)
 TECOP (technical, environmental,

commercial, operational, political)
 VUCA (volatility, uncertainty,

complexity, ambiguity)

Meetings
36
 Project team may conduct a specialized meeting

(also called risk workshop) for risk identification.
 Mostly include some form of brainstorming, but

other techniques may be included depending on
the level of risk process defined in the RMP.
 Use of a skilled facilitator will increase the

effectiveness of the meeting.
 It is also essential to ensure that the right people

participate in the risk workshop.
Meetings
37
 On larger projects, it may be appropriate to invite

the project sponsor, subject matter experts,
sellers, representatives of the customer, or other
project stakeholders.
 Risk workshops for smaller projects may be

restricted to a subset of the project team.

Outputs: Risk Register Risk Report Project Documents Updates
Risk Register
38
 The risk register captures details of identified

individual project risks.
 Results of other RM processes are recorded in

the risk register as those processes are
conducted throughout the project.
 Risk register may contain limited or extensive

risk information depending on project
variables such as size and complexity.

Risk Register
39
 On completion of Identify Risks process, contents

of the risk register may include:
List of Identified Risks
 Each individual project risk is given a unique

identifier in the risk register.
 Identified risks are described in as much detail as

required to ensure unambiguous understanding.
 A structured risk statement may be used to

distinguish risks from cause(s) and effect(s).

Risk Register
40
Potential Risk Owners
 Where a potential risk owner has been

identified during the Identify Risks process,
the risk owner is recorded in the risk register.
 This will be confirmed during the Perform

Qualitative Risk Analysis process.

Risk Register
41
List of Potential Risk Responses
 Where a potential risk response has been

identified, it is recorded in the risk register.
 This will be confirmed during the Plan Risk

Responses process.
 Additional data may be recorded for each

identified risk, depending on the risk register
format specified in the risk management plan.
Risk Register
42
List of Potential Risk Responses
 This additional data may include:
 A short risk title  Risk category

 Current risk status  One or more causes
 One or more effects on objectives  Risk triggers
 WBS reference of affected activities
 Timing information (when was risk identified, when might the risk occur,
when might it no longer be relevant, and what is action deadline)

Defining Risks
Defining Risks
43
Potential Risk
Risk
Risk Objective Response Potential Risk
ID Root Cause Risk
Hit Owner Trigger
Cause Risk Effect Strategy Action
Delays in the Meetings Complex and

with varying
development
of system, developer for hardware and May be
better software triggered
Differences in / Rework may that may
lack of be required also delay understand- requirements due to poor
ing of for various understan-
understanding by the the Mr.
requirements platforms ding of the
of the developer, in subsequent Cost and Haad IT
R1 Avoid and using (PC/Laptop, system
requirements case of activities Time models/protot Tablet/Smart
Manager
requireme-
by the system system not (including ypes for Phones) and nts and/or
developer meeting the launching of reaching a Operating time
(contractor) requirements business) consensus Systems pressures
and about what is (Windows, OS
increased actually X, iOS,
cost required
Android)
Risk Report
44
 Risk report presents information on sources of overall project risk and summary
information on identified individual project risks.
 Risk report is developed progressively throughout the PRM process.
 Results of other PRM processes are also included in the risk report as those
processes are completed.

Risk Report
45
 On completion of Identify Risks process, information in the risk report may

include:
 Sources of overall project risk, indicating which are the most important
drivers of overall project risk exposure; and
 Summary information on identified individual project risks, such as

number of identified threats and opportunities, distribution of risks
across risk categories, and trends, etc.
 Additional information may be included in the risk report, depending on the

reporting requirements specified in the RMP.

Project Documents Updates

46
 Project documents that may be updated as a

result of this process include but are not
limited to:
Assumption Log
 During the Identify Risks process, new

assumptions may be made, new constraints
may be identified, and existing assumptions or
constraints may be revisited and changed. The
assumption log should be updated with this
new information.

Project Documents Updates

47
Issue Log
 The issue log should be updated to capture

any new issues uncovered or changes in
currently logged issues.
Lessons Learned Register
 The lessons learned register can be updated

with information on techniques that were
effective in identifying risks to improve
performance in later phases or other projects.
48
When everything’s coming your way, you’re in the

wrong lane.
(Steven Wright)

Assignment (Submission 202000 Nov 20
49
Develop a Risk register (using Excel sheet) which should include at least 150
identified Risks (maximum 10% increase allowed ) of the same Project which
you have chosen for developing your Project Risk Management Plan. The
document should encompass all the essential characteristics conceived during
various Risk Management processes.

50
Thank You

Lecture 7 - Identify Risks: Project Risk Management Ms (PM)

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Lecture 7 – Identify Risks

Project Risk Management

 Identifying risks from different risk categories

Bilal Atiq PMP & RMP PMI

 Inputs  Tools & Techniques

Bilal Atiq PMP & RMP PMI

Topics for the Process of Defining Deliverables

 Collect a list of topics from the

 It helps, if a number of questions can be

 Some examples of the topics and

Topics for the Process of Defining Deliverables

Positioning Is there a clear and compelling benefit-oriented project objective

Bilal Atiq PMP & RMP PMI

Topics for the Process of Defining Deliverables

Sponsorship Does the management hierarchy collectively support the project,

Sources of Schedule Risks

Bilal Atiq PMP & RMP PMI

Sources of Resource Risk

 Among the resource risks, the important few are:

Types of People Risks

 Staff leaving the project permanently

 Staff leaving the project temporarily

 Staff joining the project late

 Conflicts between simultaneously on-going

 Low motivation / falling morale

 Violation of specified standards

 Turn over of service or product supplier

Bilal Atiq PMP & RMP PMI

 Sudden change in national economic / financial

 Displeasure of international funding sources, e.g.

This type of risk does not happen often, but when it

Bilal Atiq PMP & RMP PMI

Inputs – Tools & Techniques – Outputs

Bilal Atiq PMP & RMP PMI

Project Management Plan

 Project management plan components used in Identify Risks process include

 Requirements Management Plan – May indicate project objectives that

 Schedule Management Plan – May identify areas that are subject to

 Cost Management Plan – May identify areas that are subject to

Bilal Atiq PMP & RMP PMI

Project Management Plan

 Quality Management Plan – May identify areas that are subject to

 Resource Management Plan – May identify areas that are subject to

 Risk Management Plan – Provides information on risk-related roles and

Project Management Plan

 Scope Baseline – Includes deliverables and criteria for their acceptance,

 Schedule Baseline – The schedule baseline may be reviewed to identify

 Cost Baseline – The cost baseline may be reviewed to identify costs or

Bilal Atiq PMP & RMP PMI

 If the project requires external

Bilal Atiq PMP & RMP PMI

 If the project requires external procurement of resources, the initial procurement

 As documentation is updated throughout the project, the most up to date

Bilal Atiq PMP & RMP PMI

Enterprise Environmental Factors

 EEFs that can influence the Identify Risks

 Published material, including commercial

 Industry studies of similar projects

Bilal Atiq PMP & RMP PMI

Organizational Process Assets

 OPAs that can influence the Identify Risks

 Project files, including actual data

 Organizational and project process