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    Chapter 09 Project Risk Management (PMF)

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    Yadi Malik
    This chapter discusses the processes involved in project risk management according to PMBOK. It covers planning risk management, identifying risks, performing qualitative and quantitative risk analysis, planning responses, and controlling risks. The key processes involve identifying and documenting risks in a risk register, assessing their probability and impact, developing contingency and fallback plans, and continuously monitoring and responding to risks throughout the project lifecycle.

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    Chapter 09 Project Risk Management (PMF)

    Uploaded by

    Yadi Malik
    26 views29 pages
    This chapter discusses the processes involved in project risk management according to PMBOK. It covers planning risk management, identifying risks, performing qualitative and quantitative risk analysis, planning responses, and controlling risks. The key processes involve identifying and documenting risks in a risk register, assessing their probability and impact, developing contingency and fallback plans, and continuously monitoring and responding to risks throughout the project lifecycle.

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    This chapter discusses the processes involved in project risk management according to PMBOK. It covers planning risk management, identifying risks, performing qualitative and quantitative risk analysis, planning responses, and controlling risks. The key processes involve identifying and documenting risks in a risk register, assessing their probability and impact, developing contingency and fallback plans, and continuously monitoring and responding to risks throughout the project lifecycle.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    26 views29 pages

    Chapter 09 Project Risk Management (PMF)

    Uploaded by

    Yadi Malik
    This chapter discusses the processes involved in project risk management according to PMBOK. It covers planning risk management, identifying risks, performing qualitative and quantitative risk analysis, planning responses, and controlling risks. The key processes involve identifying and documenting risks in a risk register, assessing their probability and impact, developing contingency and fallback plans, and continuously monitoring and responding to risks throughout the project lifecycle.

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    © All Rights Reserved
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    of 29

    Chapter 9: Project Risk

    Management
      Overview of Project Risk Management
      Plan Risk Management Process
      Identify Risks Process

      Perform Qualitative Risk Analysis Process


      Perform Quantitative Risk Analysis Process
      Plan Risk Responses Process
      Control Risks Process
    triggers or a change in severity.
    Overview of Project Risk Management

    The PMBOK Guide defines risk as:


    “ An uncertain event or condition that, if it occurs, has a
    positive or negative effect on one or more project
    objectives such as scope, schedule, cost, and quality. A
    risk may have one or more causes and, if it occurs, it may
    have one or more impacts. “
    Risks can be positive or negative, so risk management is
    about maximizing the probability and impact of positive
    events (opportunities) and minimizing the probability and
    impact of negative impacts (threats) to the project.
    Overview of Project Risk Management
    Major Processes

    Plan Risk
    Management Project Risk
    Management
    Identify Risks

    Perform Qualitative
    Risk Analysis

    Perform Quantitative
    Risk Analysis

    Plan Risk Responses

    Control Risks
    Plan Risk Management Process
    Identify Risks Process
    Risk Management Plan
    Risk Breakdown Structure
    Project

    Technical External Organizational Project


    Management

    Requirements Subcontractors Project Estimating


    and Suppliers Dependencies

    Technology
    Regulatory Planning
    Resources
    Complexity Market
    and Interfaces Controlling
    Funding
    Customer

    Performances
    and Reliability Weather Prioritization Communication

    Quality
    Based on the PMBOK Guide, Fourth Edition
    Risk Management Plan
    Risk Categories
    The following may be sources or categories of risk:

    Technical, quality, or performance risks

    Project management risks

    Organizational risks

    External risks

    Internal risks

    Unforeseeable risks
    Outputs
    Risk Register
    Use the risk register to document risks and their impact.
    Risk Management Matrix (Risk Register)
    Project Project #
    Project manager Sponsor
    Project artifacts Updated

    Trigger
    Event/ Date
    ID Risk Description Category Indicator Contingency Plan Fallback Plan Owner Status Entered Date to Review

    1
    2
    3
    4
    5
    6
    7
    8
    9
    Perform Qualitative Risk Analysis
    Process
    Tools and Techniques
    Probability and Impact Matrix

    Probability Threat Risks Opportunity Risks

    0.90 0.09 0.27 0.45 0.63 0.81 0.81 0.63 0.45 0.27 0.09

    0.70 0.07 0.21 0.35 0.49 0.63 0.63 0.49 0.35 0.21 0.07

    0.50 0.05 0.15 0.25 0.35 0.45 0.45 0.35 0.25 0.15 0.05

    0.30 0.03 0.09 0.15 0.21 0.27 0.27 0.21 0.15 0.09 0.03

    0.10 0.01 0.03 0.05 0.07 0.09 0.09 0.07 0.05 0.03 0.01

    Impact 0.1 0.3 0.5 0.7 0.9 0.9 0.7 0.5 0.3 0.1

    Gray zone threat requires both contingency and fall back plans. Gray zone opportunity should be pursued.
    Purple zone threat requires contingency plans. Purple zone opportunity requires at least an
    enhancement plan.
    Blue zone threat may be acceptable. Blue zone opportunity may be acceptable.
    Perform Quantitative Risk Analysis
    Process
    Data Gathering and Representation Techniques
    Probability Distributions
    Beta Distribution Triangular Distribution

    P 0.1 P 0.1
    r r
    o o
    b b
    a a
    b b
    i i
    l l
    i i
    t 0.0 0.0
    t
    y y
    Time Time
    Quantitative Risk Analysis and Modeling Techniques
    EMV Analysis

    Event Probability Impact Risk Type EMV


    1 25% $10,000 Opp. +$2,500

    2 75% $22,500 Threat -$16,875

    3 55% $86,000 Opp. +$47,300

    4 20% 30 days Threat -6 days


    Decision
    Definition Decision Node Chance Node Net Path Value EMV
    Decision
    Definition Decision Node Chance Node Net Path Value EMV
    Decision
    Decision Node Chance Node Net Path Value EMV
    Quantitative Risk Analysis and Modeling Techniques
    Sensitivity Analysis
    Risk Register Updates
    Probabilistic Analysis of the Project

    Risk Impact Probability Completion


    Probability
    Date
    Technical lead
    $1,733 80%
    reassigned July 1 15%
    Underestimated
    $3,220 70% July 10 22%
    task duration
    Project manager July 15 30%
    $2,177 50%
    leaves
    August 1 50%
    System
    $1,425 40%
    connectivity August 13 80%
    Underestimated
    $838 30% August 28 100%
    equipment costs
    Plan Risk Responses Process
    * The two most widely used strategies are mitigate
    (threats) and enhance (opportunities).
    Tools and Techniques
    Contingency and Fallback Plans

    Contingency plan or contingent


    response strategy
    Actions taken if an identified risk occurs
    or if triggers occur

    Fallback plan
    Developed when the selected risk
    strategy is not fully effective or if risk has
    a high impact
    Outputs
    Risk Register Updates
    The updated (completed) risk register might include:
    Identified risks and descriptions
    Triggers (symptoms and warning signs)
    Risk owners and assigned responsibilities
    Outputs of qualitative and quantitative analysis
    Response strategies
    Specific actions taken if risk occurs
    Results from qualitative and quantitative risk analysis
    Primary and secondary responses for each risk
    Residual and secondary risks
    Risk budget
    Contingency and fallback plans
    Contingency reserves for time and cost
    Control Risks Process
    Tools and Techniques
    Workarounds

    Performed when no contingency plan exists

    Unplanned responses to risk

    Created as needed to deal with unanticipated risk


    End of Chapter 9: Project Risk
    Management
      Overview of Project Risk Management
      Plan Risk Management Process
      Identify Risks Process

      Perform Qualitative Risk Analysis Process


      Perform Quantitative Risk Analysis Process
      Plan Risk Responses Process
      Control Risks Process

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