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02/21/18
PROJECT RISK MANAGEMENT
FEB 21, 2018
MARRIOTT - KARACHI
02/21/18
What is Risk…?
02/21/18
Statement Risk (Yes / No)
I have not taken my exams and I think I will not be
able to move to next class this year
I worked very hard, there is chance that I might
secure first position in exams
Project Manager has resigned
Fuel prices might increase further after next year
budget
Labor from project A might be available for Project B
An uncertain event which, should it occur, will have an
effect on the achievement of the projects objectives
02/21/18
Is it possible to have no Risks in our lives or in project or in business……?
Statement
USA might experience extreme winter next year
PML(N) may not come in power after next elections
USD – Kuwaiti Riyal exchange rate might change
Uncertainty
Impact (positive
or negative)
What is Risk…?
Do all events matter…?
02/21/18
What is Risk…?
02/21/18
What is Risk…?
Therefore, we are left with only one choice – Risk Management..!
02/21/18
When should we start Risk
exercise at our projects…?
02/21/18
What is Risk Management…?
Process to ensure that Risks are managed effectively
Why…?
But How…?
02/21/18
What is Risk Management…?
02/21/18
Let’s Identify Risks…?
A Risk cannot be managed unless it is identified
But why…?
What’s the big
deal…?
Risk identification is considered the most important step in Risk Management
02/21/18
Let’s Identify Risks…?
How…?
02/21/18
Let’s Identify Risks…?
How…?
Due to underpass construction at Punjab Chorangi
There is a possibility of getting stuck in traffic
Reaching office late
02/21/18
Let’s Identify Risks…?
Exercise # 01: From your project, identify one “Risk” and one “Opportunity”
Cause Risk Effect
Opportunity
Risk
02/21/18
Let’s Identify Risks…?
Meetings
Experts
Brainstorming sessions
Assumptions Analysis
Tools that can be used
02/21/18
Let’s Identify Risks…?
Tools that can be used
First entry has been made in Risk Register
02/21/18
Let’s Identify Risks…?
02/21/18
But why…?
02/21/18
Risk Analysis
02/21/18
Let’s Analyze Identified Risks…?
Usually applied in most of the projects
May not be applied to many simple or
moderately complex projects
Consider all the risks identified in the identify
risk process
only considers the risks which are marked for
further review after Qualitative Risk Analysis
Does not analyze the risks mathematically
Stakeholders inputs (expert judgment) are used
to judge the probability and impact
Uses the mathematical and simulation tools to
calculate the probability and impact
Assesses individual risks by assigning numeric
ranking of probability and impact, usually the
rank of 0 to 1 is used where 1 demonstrates high
This predicts likely project outcomes in terms of
money or time based on combined effects of
risks
02/21/18
Key to Risk Analysis….. Risk Matrix
02/21/18
Exercise # 02: On the given Risk Register format, analyze the identified risks
Let’s Analyze Identified Risks…?
S. No.
Risk Identification Risk Analysis Risk Response
Monitoring &
Control
Cause Risk Effect
Inherent Risk
Action Plan Timeline
P I P x I
1
Due to delay in
shipment
delivery of major
equipment may get
late
which might effect
Project COD
2
Due to rise in safety
incident
work at site may get
suspended
resulting in overall
project delay
02/21/18
What is Risk Management…?
Next is “Selecting appropriate
Responses to Analyze Risks”..!
■ To determine the set of actions, which increases the impact or
likelihood of opportunities and decrease the impact of likelihood of
threats
■ Risk Action Owner shall be assigned with clear responsibilities
■ Response Trigger conditions shall be identified
■ Should take into account organization culture (Risk Averse vs Risk Seeking)
■ Should be appropriate to the severity of the Risk
■ Focus on both Threats and Opportunities
02/21/18
Risk Responses
02/21/18
Risk Responses
02/21/18
Risk Responses
02/21/18
Exercise # 03: On the given Risk Register format, mention risks responses
S. No.
Risk Identification Risk Analysis Risk Response
Monitoring &
Control
Cause Risk Effect
Inherent Risk
Action Plan Timeline
P I P x I
1
Due to delay in
shipment
delivery of major
equipment may get
late
which might effect
Project COD
2
Due to rise in safety
incident
work at site may get
suspended
resulting in overall
project delay
Risk Responses
02/21/18
Risk Responses
02/21/18
Control Risks
02/21/18

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Project risk management

  • 2. PROJECT RISK MANAGEMENT FEB 21, 2018 MARRIOTT - KARACHI 02/21/18
  • 3. What is Risk…? 02/21/18 Statement Risk (Yes / No) I have not taken my exams and I think I will not be able to move to next class this year I worked very hard, there is chance that I might secure first position in exams Project Manager has resigned Fuel prices might increase further after next year budget Labor from project A might be available for Project B
  • 4. An uncertain event which, should it occur, will have an effect on the achievement of the projects objectives 02/21/18 Is it possible to have no Risks in our lives or in project or in business……? Statement USA might experience extreme winter next year PML(N) may not come in power after next elections USD – Kuwaiti Riyal exchange rate might change Uncertainty Impact (positive or negative) What is Risk…? Do all events matter…?
  • 6. 02/21/18 What is Risk…? Therefore, we are left with only one choice – Risk Management..!
  • 7. 02/21/18 When should we start Risk exercise at our projects…?
  • 8. 02/21/18 What is Risk Management…? Process to ensure that Risks are managed effectively Why…? But How…?
  • 9. 02/21/18 What is Risk Management…?
  • 10. 02/21/18 Let’s Identify Risks…? A Risk cannot be managed unless it is identified But why…? What’s the big deal…? Risk identification is considered the most important step in Risk Management
  • 12. 02/21/18 Let’s Identify Risks…? How…? Due to underpass construction at Punjab Chorangi There is a possibility of getting stuck in traffic Reaching office late
  • 13. 02/21/18 Let’s Identify Risks…? Exercise # 01: From your project, identify one “Risk” and one “Opportunity” Cause Risk Effect Opportunity Risk
  • 14. 02/21/18 Let’s Identify Risks…? Meetings Experts Brainstorming sessions Assumptions Analysis Tools that can be used
  • 15. 02/21/18 Let’s Identify Risks…? Tools that can be used First entry has been made in Risk Register
  • 19. 02/21/18 Let’s Analyze Identified Risks…? Usually applied in most of the projects May not be applied to many simple or moderately complex projects Consider all the risks identified in the identify risk process only considers the risks which are marked for further review after Qualitative Risk Analysis Does not analyze the risks mathematically Stakeholders inputs (expert judgment) are used to judge the probability and impact Uses the mathematical and simulation tools to calculate the probability and impact Assesses individual risks by assigning numeric ranking of probability and impact, usually the rank of 0 to 1 is used where 1 demonstrates high This predicts likely project outcomes in terms of money or time based on combined effects of risks
  • 20. 02/21/18 Key to Risk Analysis….. Risk Matrix
  • 21. 02/21/18 Exercise # 02: On the given Risk Register format, analyze the identified risks Let’s Analyze Identified Risks…? S. No. Risk Identification Risk Analysis Risk Response Monitoring & Control Cause Risk Effect Inherent Risk Action Plan Timeline P I P x I 1 Due to delay in shipment delivery of major equipment may get late which might effect Project COD 2 Due to rise in safety incident work at site may get suspended resulting in overall project delay
  • 22. 02/21/18 What is Risk Management…? Next is “Selecting appropriate Responses to Analyze Risks”..!
  • 23. ■ To determine the set of actions, which increases the impact or likelihood of opportunities and decrease the impact of likelihood of threats ■ Risk Action Owner shall be assigned with clear responsibilities ■ Response Trigger conditions shall be identified ■ Should take into account organization culture (Risk Averse vs Risk Seeking) ■ Should be appropriate to the severity of the Risk ■ Focus on both Threats and Opportunities 02/21/18 Risk Responses
  • 26. 02/21/18 Exercise # 03: On the given Risk Register format, mention risks responses S. No. Risk Identification Risk Analysis Risk Response Monitoring & Control Cause Risk Effect Inherent Risk Action Plan Timeline P I P x I 1 Due to delay in shipment delivery of major equipment may get late which might effect Project COD 2 Due to rise in safety incident work at site may get suspended resulting in overall project delay Risk Responses