Project Risk Management Techniques

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					   TRAIN TO WIN


                            Project Risk
                            Management
                            Presented by:
                            Michael C. Nollet, MBA, PMP®
    www.BUtrain.com

1-800-BU-TRAIN (288-7246)
Performance Objectives

• What’s new in PMBOK® 3rd edition?
• Three tips for more effective risk management
• Select common problems and brainstorm solutions
• Document our possible solutions
• Start to improve project risk management in the real
  world!




 2
About Boston University

• Founded in 1839
• 4th largest private
  university in U.S.
• Over $1.4 billion
  annual budget
• $2.6 billion in assets
• Largest foreign student population in the world
• 17 Schools and Colleges
• Over 3,000 Faculty Members

 3
Boston University
Corporate Education Center (BUCEC)
•   Project Management
•   ITIL
•   PRINCE2™
•   Management & Communication
•   Business Process Management
•   Leadership
•   Six Sigma
•   Team Building
•   Business Analysis
• Information Technology

    4
What is Project Risk?




 5
Risks and Objectives


                                      RISK
      RISK



             Time                     Cost
                       Stakeholder
                       Needs and
                       Expectations          RISK
    RISK

                    Scope/Quality
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What’s New in PMBOK 3rd Edition?

• Look at the Inputs, Tools, Techniques and Outputs!




 7
Risk Management Process

            Start



         Identify Risk

                          Monitor and
                          Control Risk
         Analyze Risk


          Respond
           to Risk



            Finish

8
Key Concepts




9
Risk Knowledge Area
     Initiating   Planning            Executing   Controlling   Closing


                  Risk Management                 Risk
                  Planning                        Monitoring
                                                  and Control
                  Risk
                  Identification

                  Qualitative Risk
                  Analysis

                  Quantitative Risk
                  Analysis

                  Risk
                  Response
                  Planning




10
Risk Management Planning

     Inputs                    Tools and               Outputs
                               Techniques

     Enterprise                Planning meetings and   Risk management plan
                               analysis
     environmental factors

     Organizational process
     assets
     Project scope statement


     Project management
     plan




11
Risk Identification

      Inputs                     Tools and               Outputs
                                 Techniques


      Enterprise environmental   Documentation reviews   Risk register
      factors
                                 Information gathering
      Organizational process     techniques
      assets
                                 Checklists
      Project scope statement
                                 Assumptions analysis
      Risk management plan
                                 Diagramming
                                 techniques
      Project management
      plan


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Risk Identification




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Qualitative Risk Analysis

      Inputs                    Tools and                Outputs
                                Techniques


      Organizational process    Risk probability and     Risk register
      assets                    impact assessment
                                                         (updates)
      Project scope statement   Probability and impact
                                matrix
      Risk management plan
                                Risk data quality
                                assessment
      Risk register
                                Risk categorization

                                Risk urgency
                                assessment


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Qualitative Analysis




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Quantitative Risk Analysis

      Inputs                          Tools and             Outputs
                                      Techniques

      Organizational process assets   Data gathering and    Risk register
                                      representation
      Project scope statement                               (updates)
                                      technique
      Risk management plan
                                      Quantitative risk
      Risk register                   analysis and
                                      modeling techniques
      Project management plan

      Project schedule management
      plan

      Project cost management plan




 16
Risk Response Planning

     Inputs                 Tools and                   Outputs
                            Techniques

     Risk management plan   Strategies for negative     Risk register
                            risks or threats
                                                        (updates)
     Risk register          Strategies for positive
                            risks or opportunities      Project
                                                        management plan
                            Strategies for both
                            threats and opportunities   updates

                            Contingent response         Risk-related
                            strategy
                                                        contractual
                                                        agreements




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Risk Monitoring and Control

     Inputs                 Tools and               Outputs
                            Techniques

     Risk management plan   Risk reassessment       Risk register
                            Risk audits
                                                    (updates)
     Risk register
                                                    Requested changes
                            Variance and trend
                                                    Recommended corrective
     Approved change        analysis
                                                    actions
     requests                                       Recommended preventive
                            Technical performance
                                                    actions
                            measurement
     Work performance                               Organizational
     information            Reserve analysis        process assets
                                                    (updates)
     Performance reports    Status meetings
                                                    Project
                                                    management plan
                                                    (updates)

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1. Three
2. Risk
3. Tips




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1. Risk and Impact Travel Together!

There is a risk that IMPACT,
Because (of) RISK EVENT
                          Or
      IF                       THEN

      RISK EVENT #1            IMPACT #1

      RISK EVENT #2            IMPACT #2




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2. Make Risk Visible

      %   5        5    10           15   20        25


               4   4        8        12   16        20
                                               R3

               3   3        6         9   12        15
                       R1
               2   2        4         6    8        10


               1   1        2         3    4         5
                                R2

      Impact       1        2        3    4         5




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3. Show Total Risk Exposure




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3.5 Include Contingency in the Plan



      A    4 WD   B   6 WD   C 8 WD
          $X          $Y     $21,030   F




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Group Exercise

• Identify 5 common risks on your projects
• Review in your small groups
• Select at least one common risk, and brainstorm all the
  potential responses you can come up with… and write
  them down!




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Web Resources

• PMI Risk Special Interest Group (SIG)
  – www.risksig.com

• Society of Risk Analysis
  – www.sra.org

• Tech Republic
  – www.techrepublic.com




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Reference Books

• PMBOK, chapter 11
• Wideman, “Project and Program Risk Management”
• Martin and Chadbourne, “The Professional Guide to Risk
  Assessment”
• DeMarco and Lister, “Waltzing with Bears”




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Next Steps

• Document today’s results
• Email our potential solutions
• Start a dialogue
• Improve project risk management practices
• What else could we do?




 27
   TRAIN TO WIN


                            Thank You !


                            Please send comments to:
                            mnollet@usa.net
    www.BUtrain.com

1-800-BU-TRAIN (288-7246)

				
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