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Risk management profesional presentation

RISK MANAGEMENT PRESENTATION

Risk management profesional presentation

  1. 1. I N T R O D U C E D B Y PROF. KARIM EL-DASH P H D ; P M P ; R M P ; C C E ; A V S RISK MANAGEMENT PROFESSIONAL PMI-RMP® 06/10 - 10/10 /2012 1 Prof. Karim El-Dash www.projacs.com
  2. 2. PMP Eligibility /Requirements Educational Background Project Risk Management Experience Project Risk Management Education High school diploma, associate’s degree or global equivalent 4,500 hours experience within the last five years 40 contact hours of formal education Bachelor’s degree or global equivalent 3,000 hours experience within the last five years 30 contact hours of formal education 06/10 - 10/10 /2012 2 Prof. Karim El-Dash www.projacs.com
  3. 3. PMP Eligibility /Requirements Exam 170 questions Time 3.5 hours Fees CBT USD 520/ 670 Fees PBT USD 415/ 565 06/10 - 10/10 /2012 3 Prof. Karim El-Dash www.projacs.com
  4. 4. Human Resources Risk Project Management Cost Time Quality Procurement Communication 4 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  5. 5. Definition of a Project 5 Any work that: 1. Has a temporary endeavor with a beginning and an end. 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com Start Process Finish
  6. 6. Definition of a Project 6 2. Creates a unique product , service or result. 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  7. 7. What Is Project Management? 7 Project Management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements. 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  8. 8. Projects & Products 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com 8
  9. 9. Role of a Project Manager 9 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  10. 10. Enterprise Environmental Factors 10 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  11. 11. Organizational Process Assets 11 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com OPA Manuals Procedures Templates Guidelines Policies Lessons Learned Historical Info
  12. 12. Project Life Cycle 12 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  13. 13. Cost & staffing levels across PLC 06/10 - 10/10 /2012 13 Prof. Karim El-Dash www.projacs.com Time Start the project Organizing & preparing Carrying out work Closing the project Project Charter Project Management Plan Accepted deliverables Archived project documents
  14. 14. Impact of variables based on project time 14 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com cost Influence / risk Time
  15. 15. Project Governance Across the Life Cycle 15  Project governance provides a comprehensive, consistent method of controlling the project  It should be described in the project plan  It must fit within the context of the program or performing organization 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  16. 16. Stakeholders 16  A stakeholders are persons and organizations that are actively involved in the project, or whose interests may be affected as a result of project performance or project completion.  +ve & -ve stakeholders 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  17. 17. 17 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  18. 18. Functional Organization 18 CEO Technical Manager Ahmad Maram Abdullah Contract Manager Aly Marwa Abdulaziz Finance Manager Adam Manal Abdussalam 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  19. 19. Projectized Organization 19 CEO PM Jamal Ahmad Maram Abdullah PM Jone Aly Marwa Abdulaziz PM Joda Adam Manal Abdussalam 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  20. 20. Project Management Process Groups 20 1. Initiating 2. Planning 3. Executing 4. Monitoring & controlling 5. Closing 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  21. 21. Process Groups Interact in a Phase or Project 21 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com Time Initiating Planning Executing Monitoring & Controlling Closing
  22. 22. Project Management Process Group Triangle 22 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com Executi ngproce sses Closing process es Plannin g process es Initiatin g process es Monitoring & controlling processes Executi ngproce sses Closing process es Plannin g process es Initiatin g process es Monitoring & controlling processes Executi ngproce sses Closing process es Plannin g process es Initiatin g process es Monitoring & controlling processes Executi ngproce sses Closing process es Plannin g process es Initiatin g process es Monitoring & controlling processes Phase 1 Phase 2 Phase 3 Phase 4 Project Life Cycle Executi ngproce sses Closing process es Plannin g process es Initiatin g process es Monitoring & controlling processes
  23. 23. Project Charter 23 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com 1. Project authorization 2. PM authorization
  24. 24. Project Scope Statement Includes:  Product scope description.  Product acceptance criteria.  Project deliverables.  Project exclusions  Project constraints  Project assumptions. 24 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  25. 25. Sample WBS 06/10 - 10/10 /2012 25 Prof. Karim El-Dash www.projacs.com
  26. 26. Decomposition - 100% Rule 26 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  27. 27. WBS vs. OBS 27 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  28. 28. Schedule Management Plan  Approach  Milestone  Critical activities  Responsibilities  Prioritization  Analyzing  Documentation  Change process 28 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  29. 29.  Is a form of progressive elaboration planning.  Work to be accomplished in the near term is planned in detail at a low level of the WBS  Work far in the future is planned for WBS components that are at a relatively high level of the WBS. Rolling Wave Planning 29 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  30. 30. Dependencies  Mandatory dependency inherent in the nature of the work being done / contractually required (hard logic)  Discretionary dependency determined by project team (soft logic)  External 30 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  31. 31. Cost Management Plan  Level of accuracy  Units of measure  Organizational procedures links (ex. control account, CA)  Control thresholds  Rules of performance measurement (EVM)  Reporting formats  Process descriptions 31 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  32. 32. Estimate Activity Resources  Activity resource requirements  Resource breakdown structure (RBS)  Project documents update:  Activity list  Activity attributes  Resource calendar 32 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  33. 33. Estimate Activity Duration  Tools  Expert judgment:  Analogous estimating  Parametric estimating  3-point estimate  Reserve analysis 33 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  34. 34. Estimate Activity Duration  Tools  Expert judgment  Analogous estimating: also called top-down estimating, means using the actual duration of a previous, similar activity as the basis for estimating the duration of a future activity based on specific parameters like duration, budget, size, weight  Parametric estimating  3-point estimate  Reserve analysis 34 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  35. 35. Estimate Activity Duration  Tools  Expert judgment  Analogous estimating  Parametric estimating uses statistical relationship between historical data and other variables to estimate for activities, such as multiplying quantity of work by productivity rate  3-point estimate  Reserve analysis 35 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  36. 36. Estimate Activity Duration  Tools  Expert judgment  Analogous estimating  Parametric estimating  3-point estimate Optimistic, most likely, pessimistic and 6 4 pMo E ttt t   6 op tt t   36 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  37. 37. PERT 37 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  38. 38. Estimate Cost • Activity Cost Estimates • Bases of estimates  how it was developed  assumptions  constraints  range of possible estimates (±15%, 8-10)  Confidence level • Project document updates 38 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  39. 39. Schedule Compression 1- Crashing 2- Fast tracking 39 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  40. 40. Crashing 40 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  41. 41. Fast Tracking 41 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  42. 42. Variable & Fixed Costs  Variable Costs that change with the amount of production.  Fixed Costs that do not change as production changes. 42 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  43. 43. Direct and Indirect Cost Indirect costs are the necessary costs of doing business that cannot be related to a particular activity and in some cases cannot be related to a specific project.  general overhead  project overhead. 43 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  44. 44. Quality Management Plan  Quality implementation  Quality assurance  Quality control  Continuous improvement 44 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  45. 45. Project Quality Management Precision is consistency that the value of repeated measurements are clustered and have little scatter Accuracy is correctness that the measured value is very close to the true value 45 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  46. 46. Plan Quality Cost-Benefit Analysis  less rework  higher productivity  lower costs  increased satisfaction 46 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  47. 47. Cost of Quality (COQ) Quality costs are:  Conformance = prevention + appraisal  Non-conformance = internal + external 47 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  48. 48. Force Field Analysis 48 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  49. 49. Communication 49 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  50. 50. Communication Management Plan  Stakeholder requirements  Information, format, content, and level of detail  Reasons  Time frame  Responsible person  Who will receive the information  Technologies used  Escalation process  Updating communications management plan  Constraints 50 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  51. 51. Project Communication Plan (sample) 51 06/10 - 10/10 /2012 What Who/Target Purpose When/Frequency Type/Method(s) Initiation Meeting All stakeholders* Gather information for Initiation Plan FIRST Before Project Start Date Meeting Distribute Project Initiation Plan All stakeholders* Distribute Plan to alert stakeholders of project scope and to gain buy in. Before Kick Off Meeting Before Project Start Date Document distributed via hardcopy or electronically. May be posted on project website or OIT Blackboard site. Project Kick Off All stakeholders* Communicate plans and stakeholder roles/responsibilitie s. At or near Project Start Date Meeting Status Reports All stakeholders and Project Office Update stakeholders on progress of the project. Regularly Scheduled. Distribute electronically and post via web/OIT Blackboard site. Prof. Karim El-Dash www.projacs.com
  52. 52. Communication Skills 52 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  53. 53. Power / Interest Grid for Stakeholder Prioritization 06/10 - 10/10 /2012 53 Key Players  (Manage Closely) Important Players  (Keep Satisfied) Affected Players  (Keep Informed) Other Players  (Monitor) HighLow High Low Interest Power Prof. Karim El-Dash www.projacs.com
  54. 54. Communication Technology  Urgency of the need for information  Availability of technology  Expected project staffing  Duration of the project  Project environment 54 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  55. 55. Communication Methods 55 1. Interactive communication; meeting 2. Push communication; letter 3. Pull communication; e-learning 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  56. 56. Execution & Control Processes 56 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  57. 57. Work Performance Information 57 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  58. 58. Distribute Information  Sender-receiver model  Choice of media  Writing styles  Meeting management techniques  Presentation techniques  Facilitation techniques 58 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  59. 59. Performance Report  Analysis of past performance  Current status of risks and issues  Work completed  Work to be completed  Summary of changes  Results of variance analysis  Forecast project completion 59 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  60. 60. Report Performance (T&T)  Variance analysis  Forecasting methods  Communication methods  Reporting systems 60 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  61. 61. Cost Performance Baseline  It is an authorized time- phased budget at completion (BAC) that is used as a basis against which to measure, monitor, and control overall cost performance on the project. 61 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  62. 62. Cost Baseline 62 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  63. 63. Performance Measurement  Cost Variance (CV) CV = EV – AC  Cost Performance Index (CPI) CPI = EV / AC  Schedule Variance (SV) SV = EV – PV  Schedule Performance Index (SPI) SPI = EV / PV 63 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  64. 64. Earned Value 06/10 - 10/10 /2012 64 Prof. Karim El-Dash www.projacs.com
  65. 65. Earned Value 06/10 - 10/10 /2012 65 Prof. Karim El-Dash www.projacs.com
  66. 66. Earned Value Analysis 66 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  67. 67. Forecast Estimate 1. EAC = AC + ETC 2. EAC = AC + BAC – EV ETC = (BAC-EV) 3. EAC = (AC + (BAC – EV)/CPI) ETC = (BAC-EV) / CPI 67 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  68. 68. To-Complete Performance Index (TCPI) 68 ACBAC EVBAC TCPI    ACEAC EVBAC TCPI    06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  69. 69. Perform Quality Assurance Is the process of auditing the quality requirements and the results from quality control measurements to ensure appropriate quality standards and operational definitions are used 69 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  70. 70. Perform Quality Assurance Quality audit  Is a structured, independent review to determine whether project activities comply with organizational and project policies, processes, and procedures 70 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  71. 71. Develop Project Team 71 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  72. 72. HR Management Information System 72 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  73. 73. Team Development  Observation and Conversation  Project Performance Appraisals  Formal or informal  360 degree  Conflict Management  Withdrawing / smoothing / compromising / forcing / collaborating / confronting  Issue Log  Interpersonal skills 73 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  74. 74. Team Performance Assessment 74 06/10 - 10/10 /2012 Behaviors/Process Measures Results Measures Individual Level: An employee’s contribution to the team Whether or how well the employee: cooperates with team members, communicates ideas during meetings, participates in the team’s decision-making processes. The quality of the written report, the turnaround time for the individual’s product, the accuracy of the advice supplied to the team, the status of the employee’s case backlog. Team Level: The team’s performance Whether or how well the team: runs effective meetings, communicates well as a group; allows all opinions to be heard, comes to consensus on decisions. The customer satisfaction rate with the team’s product, the percent decline of the case backlog, the cycle time for the team’s entire work process. Prof. Karim El-Dash www.projacs.com
  75. 75. Decision Making  Problem definition  Problem solutions generation  Evaluation criteria  Solution action planning  Solution evaluation planning  Evaluation of outcome 75 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  76. 76. 76 PROJECT RISK MANAGEMENT 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  77. 77. Project Risk Management  Planning,  identification,  analysis (qualitative + quantitative),  responses, and  monitoring and control on a project 77 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  78. 78. Project Risk Management  Objectives are to:  increase the probability and impact of positive events, and decrease the probability and impact of events adverse to the project 78 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  79. 79. Project Risk  Project risk is an uncertain event or condition that, if it occurs, has an effect on a project objective.  Objective : Scope / time / cost / quality  A risk has a cause or more and, if it occurs, an impact or more. 79 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  80. 80. Known & Unknown  Known risks are those that have been identified and analyzed  Unknown risks cannot be managed, may be addressed by contingency plan 80 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  81. 81. Project Risk Management Processes 81 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  82. 82. Plan Risk Management 11-1 1. Project scope statement 2. Cost management plan 3. Schedule management plan 4. Communications management plan 5. Enterprise environmental factors 6. Organizational process assets Inputs 1. Planning meetings & analysis Tools & Techniques 1. Risk management plan Outputs 06/10 - 10/10 /201282Prof. Karim El-Dash www.projacs.com
  83. 83. Plan Risk Management (T&T) Planning Meetings & Analysis  Project manager  Selected team members and stakeholders  Anyone with responsibility to manage the risk planning and execution activities 83 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  84. 84. Risk Management Plan  Methodology  Roles and responsibilities  Budgeting  Timing  Categories  Probability & Impact  A relative scale “very unlikely” to “almost certainty” could be used.  Numerical probabilities on a general scale (e.g., 0.1, 0.3, 0.5, 0.7, 0.9) 84 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  85. 85. 85 06/10 - 10/10 /2012 Risk Responsibility Chart Top management PM Management Team Risk Owner Plan Risk Management X X X Identify Risk X X Perform Qualitative Risk Management X X X Perform Qualitative Risk Management X X X Plan Risk Responses X X X Monitor & Control Risks X X X Prof. Karim El-Dash www.projacs.com
  86. 86. Risk Breakdown Structure (RBS) Project OrganizationalProject Management Technical External Others Time Cost Resource Quality Performance Complexity Objectives Fund Collaboration Weather Labor Politics 06/10 - 10/10 /2012 86 Prof. Karim El-Dash www.projacs.com
  87. 87. Likelihood Expectations 87 06/10 - 10/10 /2012 Level Likelihood Expected or actual frequency experienced 1 Rare May only occur in exceptional circumstances; simple process; no previous incidence of non-compliance 2 Unlikely Could occur at some time; less than 25% chance of occurring; noncomplex process &/or existence of checks and balances 3 Possible Might occur at some time; 25 –50% chance of occurring; previous audits/reports indicate non-compliance; complex process with extensive checks & balances; impacting factors outside control of organization 4 Likely Will probably occur in most circumstances; 50-75% chance of occurring; complex process with some checks & balances; impacting factors outside control of organization 5 Almost certain Can be expected to occur in most circumstances; more than 75% chance of occurring; complex process with minimal checks & balances; impacting factors outside control of organization Prof. Karim El-Dash www.projacs.com
  88. 88. Impact Scale 88 06/10 - 10/10 /2012 Relative or numerical scales Objective Very low / 0.05 Low / 0.10 Moderate / 0.20 High / 0.40 Very High / 0.80 Cost Insignificant increase <10% increase 10-20% increase 20-40% increase >40% increase Time Insignificant increase <5% increase 5-10% increase 10-20% increase >20% increase Scope Barely noticed change Minor change Major change Unacceptable by sponsor Product is useless Quality Barely noticed Applications affected Sponsor approval required Unacceptable by sponsor Product is useless Prof. Karim El-Dash www.projacs.com
  89. 89. 89 06/10 - 10/10 /2012 Stakeholder Tolerance Matrix Stakeholder Requirements Tolerances Time Cost Quality PM Deliver product as requested More than 10% Phase II More than 5% Phase II Conformance to all specs Technical Manager Passing all QC criteria More than 20% Phase II More than 10% Phase II Conformance to all limitations Marketing Manager Verify profits More than 5% Phase II More than 2% Phase II Customer acceptance IT Manager Customer satisfaction (internal & external) More than 20% Phase II More than 5% Phase II Positive feedback Prof. Karim El-Dash www.projacs.com
  90. 90. Risk Matrix 90 06/10 - 10/10 /2012 Consequences Likelihood Insignificant Minor Moderate Major Extreme Rare Low Low Low Low Low Unlikely Low Low Low Medium Medium Possible Low Low Medium Medium Medium Likely Low Medium Medium High High Almost certain Low Medium Medium High Extreme Prof. Karim El-Dash www.projacs.com
  91. 91. Risk Management Plan  Stakeholder tolerance  Reporting format  Tracking 91 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  92. 92. Identify Risks 11-2 1. Risk management plan 2. Activity cost estimates 3. Activity duration estimates 4. Scope baseline 5. Stakeholder register 6. Cost management plan 7. Schedule management plan 8. Quality management plan 9. Project documents 10. Enterprise environmental factors 11. Organizational process assets Inputs 1. Documentation reviews 2. Information gathering techniques 3. Checklist analysis 4. Diagramming techniques 5. SWOT analysis 6. Expert judgment Tools & Techniques 1. Risk register Outputs 06/10 - 10/10 /201292Prof. Karim El-Dash www.projacs.com
  93. 93. Identify Risks (T&T) 1. Documentation reviews 2. Information-gathering techniques  Brainstorming  Delphi technique  Interviewing  Root cause identification 93 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  94. 94. Identify Risks (T&T) 3. Checklists 4. Assumptions analysis 5. Diagramming techniques  Cause-and-effect diagrams  Flow charts.  Influence diagrams 94 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  95. 95. Cause and Effect Diagram  Fishbone  Ishikawa 95 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com Delay in Project ManagementMaterialsFunding ScopeProductivityLabor
  96. 96. Flowchart Organization Assets Project Planning Auditing Quality Control Verification Corrective Action 06/10 - 10/10 /2012 96 Prof. Karim El-Dash www.projacs.com
  97. 97. Influence Diagram Market  demand Product  strategy Product  verification Customer  Satisfaction 06/10 - 10/10 /2012 97 Prof. Karim El-Dash www.projacs.com
  98. 98. Identify Risks (T&T) 6. SWOT Analysis 7. Expert judgment 98 06/10 - 10/10 /2012 PRO CON Internal Strength Weakness External Opportunity Threat Prof. Karim El-Dash www.projacs.com
  99. 99. Identify Risks (output) Risk register  Identified risks  Potential responses 99 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  100. 100. Risk Register 100 06/10 - 10/10 /2012 Task Cause Risk Effect Design Conflict Errors + Rework Delay Procurement Single supplier Inappropriate delivery Delay / cost increase Handing out Permit not ready No access Delay Executing Technical problems Rework Delay / Cost increase Verification Nonconformance Corrective action Quality / Cost/ Time Prof. Karim El-Dash www.projacs.com
  101. 101. Perform Qualitative Risk Management 11-3 1. Risk register 2. Risk management plan 3. Project scope statement 4. Organizational process assets Inputs 1. Risk probability & impact assessment 2. Probability & impact matrix 3. Risk data quality assessment 4. Risk categorization 5. Risk urgency assessment 6. Expert judgment Tools & Techniques 1. Risk register update Outputs 06/10 - 10/10 /2012101Prof. Karim El-Dash www.projacs.com
  102. 102. Perform Qualitative Risk Management (T&T)  Risk Probability and Impact Assessment  Probability and Impact Matrix  Data quality assessment  Risk categorization  Risk urgency  Expert judgment 102 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  103. 103. Probability – Impact Matrix Impact 0.9 0.7 0.5 0.3 0.1 Probability 0.9 0.81 0.63 0.45 0.27 0.09 0.7 0.63 0.49 0.35 0.21 0.07 0.5 0.45 0.35 0.25 0.15 0.05 0.3 0.27 0.21 0.15 0.09 0.03 0.1 0.09 0.07 0.05 0.03 0.01 103 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  104. 104. Probability – Impact Chart High impact High  probability Low  probability Low impact 104 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  105. 105. Critical Events 105 06/10 - 10/10 /2012 High urgency Low urgency High  severity Low  severity Prof. Karim El-Dash www.projacs.com
  106. 106. Risk Severity 106 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  107. 107. Perform Qualitative Risk Management (outputs)  Risk register updates  Relative ranking  Risks categorized  Causes requiring particular attention  List of risks for additional analysis  Watch-lists of low-priority risks  Trends in qualitative risk analysis results 107 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  108. 108. Risk Register 108 06/10 - 10/10 /2012 Task Cause Risk Effect Probability Impact Design Conflict Errors + Rework Delay High High Procurement Single supplier Inappropriate delivery Delay / cost increase Medium Medium Handing out Permit not ready No access Delay Medium High Executing Technical problems Rework Delay / Cost increase Low Medium Verification Nonconformance Corrective action Quality / Cost/ Time Low Medium Prof. Karim El-Dash www.projacs.com
  109. 109. Perform Quantitative Risk Management Numerically analyzes the effect of identified risk on overall project objectives. 109 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  110. 110. Perform Quantitative Risk Management 11-4 1. Risk register 2. Risk management plan 3. Cost management plan 4. Schedule management plan 5. Organizational process assets Inputs 1. Data gathering & representation techniques 2. Quantitative risk analysis & modeling techniques 3. Expert judgment Tools & Techniques 1. Risk register update Outputs 06/10 - 10/10 /2012110Prof. Karim El-Dash www.projacs.com
  111. 111. Perform Quantitative Risk Management (T&T)  Data gathering & representation technique  Interviewing  Probability distribution 111 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  112. 112. Three-Point Estimate WBS Element Low Most Likely High Design $2 $4 $7 Build $35 $45 $60 Verify $5 $7 $10 Total $42 $56 $77 112 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  113. 113. Probability Distribution Probability Time / Cost Beta distribution Optimistic Most likely Pessimistic Triangular distribution Probability Time / Cost 113 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  114. 114. Probability Distribution  Probability  Likelihood of occurrence.  Statistics  Mean – Average of the values of events  Mode – Value which occurs most often  Median – Value in middle of the range of ordered values  Variance  Average of the squared deviations from the mean  Standard deviation – Square Root of the Variance  Range – Values between upper & lower limits 114 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  115. 115. Statistical Description Sample: 5,7,3,6,7,8,4,7,2 (2,3,4,5,6,7,7,7,8)  Mean =  Mode = 7  Median = 6  Range = 6 115 06/10 - 10/10 /2012 45.5 9 274876375   Prof. Karim El-Dash www.projacs.com
  116. 116. Normal Distribution CurveNormal Distribution Curve  2 standard deviations (+/- 1 ) = 68.26 %  4 standard deviations (+/- 2 ) = 95.46 %  6 standard deviations (+/- 3 ) = 99.73 % 0-1-2-3 +1 +2 +3 116 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  117. 117. Perform Quantitative Risk Management (T&T)  Quantitative risk analysis & Modeling Technique  Sensitivity Analysis  Expected Monetary Value  Decision Tree  Modeling & Simulation 117 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  118. 118. SENSITIVITY ANALYSIS Tornado Diagram Inflation Currency Discount rate Market demand Conformance -$2M -$1M $0M +$1M +$2M 06/10 - 10/10 /2012 118 Prof. Karim El-Dash www.projacs.com
  119. 119. SENSITIVITY ANALYSIS SPIDER DIAGRAM Total cost of the project Quality Skill Logistics Variation % 0% (+) (-) Time 119 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  120. 120. Expected Monetary Value Ei is the expected payoff for strategy i, Pi,j is the payoff element, and pj is the probability of each state of nature occurring.    n j jjii pPE 1 , 120 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  121. 121. Expected Monetary Value State of nature Boom Moderate Recess Expected value Strategy 0.20 0.50 0.30 S1 50 20 (40) 8 S2 40 10 (10) 10 S3 20 10 0 9 121 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  122. 122. Large Plant or Small Plant Small Plant ($200,000) Large Plant ($500,000) Recess +400,000 Boom +900,000 Recess +160,000 Boom +300,000 30% 70% 30% 70% 900k -500k = 400k 400k -500k = -100k 300k -200k = 100k 160k -200k = -40k 400*.3 -100*.7= 50k 100*.3 - 40*.7 = 2k Decision Definition Decision Node Chance Node Net Path value Decision Node Chance Node End of Branch 122 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  123. 123. SIMULATION + + = A B C Sum 123 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  124. 124. SIMULATION + + = A B C Sum 124 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  125. 125. Total Cost Probability Distribution 06/10 - 10/10 /2012 125 Prof. Karim El-Dash www.projacs.com
  126. 126. Perform Quantitative Risk Management (outputs)  Risk register updates:  Probabilistic analysis  Probability of achieving objectives  Prioritized list of quantified risks  Trends in quantitative risk analysis results 126 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  127. 127. Plan Risk Responses 11-5 1. Risk register 2. Risk management plan Inputs 1. Strategies for negative risks or threats 2. Strategies for positive risks or opportunities 3. Contingent response strategies 4. Expert judgment Tools & Techniques 1. Risk register update 2. Risk-related contract decisions 3. Project management plan updates 4. Project document updates Outputs 06/10 - 10/10 /2012127Prof. Karim El-Dash www.projacs.com
  128. 128. Plan Risk Responses (T&T)  Strategies for negative risks: 1. Avoid 2. Transfer 3. Mitigate 4. Accept 128 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  129. 129. Risk Avoidance  Involves changing the project management plan to eliminate the threat entirely  Some risks that arise early in the project can be avoided by clarifying requirements, obtaining information, improving communication, or acquiring expertise  One form of avoidance is to shut down the project 129 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  130. 130. Risk Transfer  Requires shifting the negative impact of a threat, along with ownership of the response, to a third party.  Cost-type contract transfer the cost risk to the buyer  Fixed-price contract transfer risk to the seller 130 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  131. 131. Risk Mitigation Implies a reduction in the probability and/or impact of an adverse risk event to an acceptable threshold 131 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  132. 132. Risk Acceptance  Passive acceptance requires no action  Active acceptance strategy is to establish a contingency reserve for known (sometimes unknown) risks 132 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  133. 133. Strategies for Threats 133 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com AvoidReduce TransferAccept
  134. 134. Plan Risk Responses (T&T)  Strategies for positive risks: 1. Exploit 2. Share 3. Enhance 4. Accept 134 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  135. 135. Risk Exploiting Eliminate the uncertainty associated with a particular upside risk by making the opportunity definitely happen. 135 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  136. 136. Risk Sharing Involves allocating ownership to a third party who is best able to capture the opportunity for the benefit of the project 136 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  137. 137. Risk Enhancement Modifies the “size” of an opportunity by: 1. Increasing probability and/or positive impacts 2. Identifying and maximizing key drivers of these positive-impact risks 137 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  138. 138. Strategies for Opportunities 138 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com ExploitEnhance ShareAccept Amount of Benefit Occurrence Frequency
  139. 139. 139 06/10 - 10/10 /2012 Risk register ( after planning risk responses) Task Cause Risk Effect Probability Impact Trigger Response Allocation Owner Residual risk Secondary risk Design Procurement Handing out Executing Verification Prof. Karim El-Dash www.projacs.com
  140. 140. Risk-Related Contract Decisions Contractorincentive Firm Fixed Price (FFP) Fixed Price Plus Incentive Fee (FPIF) Fixed Price with Economic Price Adjustments (FP-EPA) Cost Plus Fixed Fee (CPFF) Cost Plus Incentive Fee (CPIF) Customer influence Cost Plus Award Fee (CPAF) Time & Materials Customer risk Contractorrisk 140 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  141. 141. Contingency 141 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  142. 142. Monitor & Control Risks 11-6 1. Risk register 2. Project management plan 3. Work performance information 4. Performance reports Inputs 1. Risk assessment 2. Risk audits 3. Variance & trend analysis 4. Technical performance measurement 5. Reserve analysis 6. Status meetings Tools & Techniques 1. Risk register update 2. Organizational process assets updates 3. Change requests 4. Project management plan updates 5. Project document updates Outputs 06/10 - 10/10 /2012142Prof. Karim El-Dash www.projacs.com
  143. 143. Monitor & Control Risks (T&T)  Risk reassessment  Risk Audits  Variance & Trend Analysis  Technical Performance Measurements  Reserve Analysis  Status Meetings 143 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  144. 144. Common Construction Project Risk 1. Tight project schedule 2. Design variations 3. Excessive approval procedures in administrative government departments 4. High performance/quality expectations 5. Inadequate program scheduling 6. Unsuitable construction program planning 7. Variations of construction programs 8. Low management competency of subcontractors 9. Variations by the client 10. Incomplete approval and other documents 11. Incomplete or inaccurate cost estimate 12. Lack of coordination between project participants 13. Unavailability of sufficient professionals and managers 14. Unavailability of sufficient amount of skilled labor 15. Bureaucracy of government 16. General safety accident occurrence 17. Inadequate or insufficient site information (soil test and survey report) 18. Occurrence of dispute 19. Price inflation of construction materials 20. Serious noise pollution caused by construction 144 06/10 - 10/10 /2012Prof. Karim El-Dash www.projacs.com
  145. 145. K A R I M E L - D A S H K _ E L D A S H @ H O T M A I L . C O M T E L : 9 6 5 - 9 9 3 1 0 2 6 1 F A X : 9 6 5 - 2 2 3 1 4 5 3 3 06/10 - 10/10 /2012 145 THANKS Prof. Karim El-Dash www.projacs.com

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