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1. By: Anand Bobade (nmbobade@gmail.com)
Trainer: Anand Bobade
Chapter 11 –
Project Risk Management
PMP
PMBOK 6th Edition, 2019, All rights reserved.
SIXTH EDITION
Plan Risk
management
Identify Risk
Perform Qualitative
Risk Analysis
Perform
Quantitative Risk
Analysis
Plan Risk Response
Implement Risk
Response
Monitor Risk

2. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Chap 11: Project Risk Management
What is a Risk?
Why Risk Management
Trends & Emergent practices
Risk Source
Risk Management knowledge area Definition
Risk Management Processes
Review

3. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Risk is an uncertain event or condition that if occurs, has
a positive or negative effect on one or more project
objectives, such as scope, cost & quality.
Uncertain event
or condition
Effect
Project
objectives
What is a Risk?

4. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
A PM work should not focus on dealing with
problems; it should focus on preventing them.
How would it feel to say, “No problem; we
anticipated this, and we have a plan in place that will
resolve it”.
Performing risk management helps prevent many
problems & helps make other problems less likely.
Failure of PM to asses project risks is a major cause
of Project failure.
Why Risk Management?

5. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Threats:
• Risks with negative consequences are called
threats.
Opportunities:
• Risks with positive consequences are called
opportunities.
Issue:
• If there is 100% chance of an event occurring, this
would be an issue, not a risk.
Threats vs. Opportunity

6. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Pure Risk (hazard):
• Risk with potential loss only.
• Ex. Fire, theft, personal injury
Business Risk (speculative risk):
• Risk with potential loss or gain.
• Ex. A new hardware costs less (or more) than you
budgeted for!
Yes, risk can be good! Stop thinking of risk as bad, &
start thinking in terms of opportunities!
Risk Types

7. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
• Addresses overall project risk through decisions made about the structure, scope,
content, and context of the project, particularly (though not exclusively) in the
pre-project phase
Implicit risk
management
• Deals with individual project risks through the standard risk management process
to identify, analyse, respond to, and control risks, mostly during the remainder of
the project lifecycle.
Explicit risk
management
Key Concepts ->levels of risk management

8. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Non-event risks :- These are not the same as uncertain future events
•Examples: Key seller may go out of business,
•Customer may change the requirement after the design is complete,
•Subcontractor may propose enhancements to the standard operating processes
Variability risk Ambiguity risk
Trends & Emergent practices

9. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Non-event risks:
•Uncertainty surrounding planned
decision or activity can be addressed
using Monte Carlo.
•E.g., Productivity may be above or
below target
•Number of errors found during
testing may be higher or lower than
expected
Variability risk
•Uncertainty of future Can be
addressed by defining gap area & can
be managed via incremental
development, prototype &
simulation.
•E.g., Technical solution, future
developments in regulatory
frameworks, or inherent systematic
complexity.
Ambiguity risk
Trends & Emergent practices

10. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Project resilience:
• Awareness of emergent risks (unknowable unknowns).
• There risks can be only identified after its occurrence.
Emergent risks requires Project resilience
schedule &
budget
contingency
Flexible
processes
Empowered
team
Strong
change
management
Frequent
reviews
Trends & Emergent practices
•Risks exist at the program or portfolio level.
•Risks identified at higher levels will be escalated to higher levels
•They are best managed outside the project.
Integrated risk
management:

11. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Customer
Lack of Project
management
efforts
Inexperienced
PM
Suppliers
Resistance to
change
Cultural
differences
contracts
Project Risk Management ->Risk Source

12. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Includes the processes of conducting the Risk
Management planning, identification, analysis,
response planning, & controlling risk on a projects.
Plan
Identify
Analyze
Respond
Control
Project Risk Management-> Definition

13. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Plan Risk Management
• Define how to conduct risk management activities
Identify Risks
• Determine & document which risks may affect the
project
Perform Qualitative Risk Analysis
• Prioritize risks by analyzing their probability &
impact.
Project Risk Management -> Processes

14. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Perform Quantitative Risk Analysis
• Numerically analyze the effect of identified risks.
Plan Risk Responses
• How to respond to enhance opportunities & to
reduce threats
Implement Risk
•The process of implementing agreed-upon risk response plans.
Control Risk
• Track risk, monitor residual risks, identify new risks,
& evaluate effectiveness of risk planning.
Project Risk Management -> Processes

15. PMBOK 6 - All rights reserved; By: Anand Bobade (nmbobade@gmail.com)
Project Risk Management -> Review
Risk Planning is iterative process
It should be initiated early in the project lifecycle
Risk can be positive or Negative
PM has to constantly monitor risks & responds it.
Its group activity
Risk may change during course of project lifecycle

16. By: Anand Bobade (nmbobade@gmail.com)