Project Risk

Management
Project made by: Yeva Karavai, Danylo
Shylkov, Martyna Jaś, Julia Wywrot,
Gracjan Grochowicz, Emma Smit
WHAT IS
PROJECT RISK
MANAGEMENT?
 Plan Risk Management,
WHAT ARE WE Identify Risks,
Perform Qualitative Risk Analysis,
GOING TO TALK Perform Quantitative Risk Analysis,
ABOUT? Implement Risk Responses,
Monitor Risks,
 KEY CONCEPTS FOR
PROJECT RISK
MANAGEMENT
- Individual project risk - is an uncertain
event or condition that, if it occurs, has a
positive or negative effect on one or more
project objectives.

- Overall project risk is the effect of uncertainty

on the project as a whole, arising from all
sources of uncertainty including individual
risks, representing the exposure of
stakeholders to the implications of variations in
project outcome, both positive and negative.
 TAILORING
CONSIDERATIONS
BECAUSE EACH PROJECT IS UNIQUE, IT IS
NECESSARY TO TAILOR THE WAY PROJECT
RISK MANAGEMENT PROCESSES ARE
APPLIED. CONSIDERATIONS FOR TAILORING
INCLUDE BUT ARE NOT LIMITED TO:

- Project size,
- Project complexity,
- Project importance,
- Development approach,
 PLAN RISK
MANAGEMENT
Plan Risk Management is the process of
defining how to conduct risk
management activities for a project.
The key benefit of this process is that it
ensures that the degree, type, and
visibility of risk management are
proportionate to both risks and the
importance of the project to the
organization and other stakeholders.
This process is performed once or at
predefined points in the project.
 PROJECT CHARTER

The project charter documents the high-

level project description and boundaries,
high-level requirements, and risks.
PROJECT MANAGEMENT
PLAN
In planning Project Risk Management, all
approved subsidiary management plans
should be taken into consideration in order to
make the risk management plan consistent
with them.
 PROJECT DOCUMENTS

Project documents that can be considered as inputs for this

process include but are not limited to the stakeholder register .
The stakeholder register contains details of the project's
stakeholders and provides an overview of their project roles and
their attitude toward risk on this project.
ENTERPRISE
ENVIRONMENTAL FACTORS

The enterprise environmental factors that

can influence the Plan Risk Management
process include but are not limited to
overall risk thresholds set by the
organization or key stakeholders.
 ORGANIZATIONAL
PROCESS ASSETS
- Organizational risk policy;
- Risk categories, possibly organized into a risk
breakdown structure;
- Common definitions of risk concepts and terms;
- Risk statement formats;
- Templates for the risk management plan, risk
register, and risk report;
- Roles and responsibilities;
- Authority levels for decision making; and
- Lessons learned repository from previous similar
projects.
 Expert judgment

TOOLS AND Data Analysis

TECHNIQUES
Meetings
The risk management plan is a component of
the project management plan that describes
how risk management activities will be
structured and performed. The risk
management plan may include some or all of
the following elements:

Timing,
Risk Strategy, Stakeholder risk
Methodology, appetite,
Tracking,
Roles and
responsibilites,
Funding,
Identifying Risks...

It is the process of identifying individual project risks as well as

sources of overall project risk, and documenting their
characteristics. The key benefit of this process is the
documentation of existing individual project risks and the
sources of overall project risk. It also brings together
information so the project team can respond appropriately to
identified risks. This process is performed throughout the
project.
Identifying risks considers both individual project risks and sources of overall project risk.
Participants in risk identification activities may include the following:

Project Manager

Project Risk Project Team

Specialists Members

Subject Matter Experts From

Customers
Outside The Project Team

PARTICIPANTS
Other Project
End Users
Managers

Operations
Stakeholders
Managers
Risk Management Experts
WithinThe Organizations
 All project stakeholders
should be encouraged to
identify individual project
risks. It is particularly
important to involve the
project team so they can
develop and maintain a sense
of ownership and
responsibility for identified
individual project risks, the
level of overall project risk,
and associated risk response
actions.
50
CHANGES...
40
Identify Risks is an iterative
process, since new individual
30 project risks may emerge as
the project progresses through
20 its life cycle and the level of
overall project risk will also
10
change. The frequency of
iteration and participation in
each risk identification cycle
0
Risk 1 Risk 2 Risk 3 Risk 4 Risk 5 will vary by situation,
INPUTS

Project Procurement
Project Documents
Management Plan Documents

Enterprise Organizational
Agreements Environmental Process Assets
Factors
 Data Gathering Data Analysis
TOOLS & TECHNIQUES
Brainstorming-The goal of this Root cause analysis- It is
technique is to obtain a typically used to discover the
comprehensive list of individual underlying causes that lead to a
project risks and sources of overall problem, and develop
project risk. preventive action.
Expert Judgement
Checklist-A checklist is a list of items, Assumption and constraint
Expertise should be considered actions, or points to be considered. analysis- It explores the validity
from individuals or groups with Risk checklists are developed based of assumptions and constraints
specialized knowledge of on historical information and to determine which pose a risk
similar projects or business knowledge that has been to the project.
areas. Such experts should be accumulated from similar projects SWOT analysis-This technique
identified by the project and from other sources of examines the project from each
information. of the strengths, weaknesses,
manager and invited to
Interviews-Individual project risks and opportunities, and threats
consider all aspects of
sources of overall project risk can be perspectives.
individual project risks as well
identified by interviewing experienced Document analysis-Risks may
as sources of overall project
project participants, stakeholders, be identified from a structured
risk.
and subject matter experts. review of project documents,.
TOOLS & TECHNIQUES 2

Interpersonal And Team Prompt List Meetings

Skills To undertake risk identification, the
It is a predetermined list of risk categories
Interpersonal and team skills that might give rise to individual project project team may conduct a
that can be used for this risks and that could also act as sources of specialized meeting (often called a
process includes but are not overall project risk. The prompt list can be risk workshop). Most risk
limited to facilitation. used as a framework to aid the project workshops include some form of
Facilitation improves the team in idea generation when using risk brainstorming, but other risk
effectiveness of many of the identification techniques. The risk identification techniques may be
techniques used to identify categories in the lowest level of the risk included depending on the level of
individual project risks and breakdown structure can be used as a the risk process defined in the risk
sources of overall project risk. prompt list for individual project risks. management plan.
 OUTPUTS

Risk Register Project Documents Risk Report

Updates
 OUTPUTS

Risk Register
List Of Potential Responses
List Of Identified Risks
Where a potential risk response
Each individual project risk is given
has been identified during the
a unique identifier in the risk
register. Identified risks are Identify Risks process, it is
described in as much detail as recorded in the risk register.
required to ensure unambiguous
understanding.

Potential Risk Owners

Where a potential risk owner has been
identified during the Identify Risks
process, the risk owner is recorded in
the risk register.
 OUTPUTS
Project Documents
Risk Report Updates
Project documents that may be updated as a result
The risk report presents information on sources of
of this process include but are not limited to:
overall project risk, together with summary information
on identified individual project risks. The risk report is
Assumption log. During the Identify Risks process,
developed progressively throughout the process.
new assumptions may be made, new constraints
information in the risk report may include but is not
may be identified, and existing assumptions or
limited to:
constraints may be revisited and changed.

-> Sources of overall project risk, indicating which are

Issue log. The issue log should be updated to
the most important drivers of overall project risk
capture any new issues uncovered or changes in
exposure; and
currently logged issues.

-> Summary information on identified individual project

Lessons learned register. The lessons learned
risks, such as number of identified threats and
register can be updated with information on
opportunities, distribution of risks across risk techniques that were effective in identifying risks to
categories, metrics and trends, etc. improve performance in later phases or other
projects.
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 WHAT IS PERFORM
QUALITATIVE RISK ANALYSIS

INPUT TOOLS & TECNIQUES OUTPUTS

1. Project management 1. Expert judgment 1. Project documents

2. Data gathering
plan updates
3Data analysis
2. Project Documents *Assumption log
4. Interpersonal and team skills
3. Enterprise
5. Risk categorization *Issue log
environmental factors 6. Data representation *Risk register
4. Organizational 7. Meetings
process assets
*Risk report
 EXAMPLE OF PERFORM
QUALITATIVE RISK ANALYSIS

As a result of collecting
responses, potential risks
associated with failure to
achieve the sales plan
due to:
The "Market and “Competitors” group The Company
Consumers" group Opportunities group misjudgment of consumer
The ability of competitors to
needs and market size,
gathers questions about the influence the situation is asks questions about
presence of unmet consumer assessed. marketing and sales
lack of a sufficient product
needs, market trends and competencies, etc. promotion system,
whether the market will underestimating the capabilities
develop at all. of competitors.
 ABOUT INPUTS

PROJECT MANAGEMENT PLAN

Of course, when creating a project plan, we must
consider all possible risks that may arise during the
creation of the project. responsibilities
on risk management, budgets for risk management,
schedule of management activities
risks, risk categories, probability and impact
determinations, matrices
probabilities and impacts, as well as stakeholder risk
thresholds.
PROJECT DOCUMENTS
Assumption log
The assumption log is
used for identifying,
Risk register
managing, and
monitoring key сontains details of each
assumptions and identified individual
constraints that may project risk that will be
assessed during the Stakeholder register
affect the project.
Perform Qualitative This includes details of
Risk project
Analysis process. stakeholders who may
be nominated as risk
owners.
 ENTERPRISE ENVIRONMENTALFACTORS

The enterprise environmental factors that can influence

Other inputs Perform Qualitative Risk Analysis include but are not limited
to: Industry studies of similar projects, and Published material,
including commercial risk databases or checklists.

ORGANIZATIONALPROCESS ASSETS

The organizational process assets that can influence Perform

Qualitative Risk Analysis include but are not limited to
information from similar completed projects.
 TOOLS AND
TECHNIQUES
EXPERT JUDGMENT
Expertise should be considered from individuals or groups with
specialized knowledge or training in the following topics
Previous similar projects,
.

DATA GATHERING
Data-gathering techniques that can be used for this process
include but are not limited to interviews. Structured or semi-
structured interviews can be used to assess the probability and
impacts of individual project risks,

INTERPERSONAL AND TEAM SKILLS

Interpersonal and team skills that can be used for this process PS Voice-Over Services | 2020
include but are not limited to facilitation. Facilitation improves the
effectiveness of the qualitative analysis of individual project risks.
 DATA ANALYSIS
Risk data quality assessment. Risk probability and impact
assessment
Assesses the degree
of accuracy and reliability of data on Risk probability assessment considers the likelihood
individual project risks as a basis for that a specific risk will occur. Risk impact
qualitative assessment considers the potential effect on one or
risk analysis. The use of low-quality risk more project objectives such as schedule, cost,
data can lead to a qualitative risk analysis quality, or performance.
that is of little
use to the project.

Assessment of other risk

parameters
CONTROLLABILITY
URGENCY
DETECTABILITY
PROXIMITY CONNECTIVITY
DORMANCY STRATEGIC IMPACT
MANAGEABILITY PROPINQUITY
INTERPERSONALAND TEAM
SKILLS
Interpersonal and team skills that RISK CATEGORIZATION
can be used for this process include Risks to the project can be categorized by MEETINGS
but are not limited to facilitation . sources of risk (e.g., using the risk
Facilitation improves the breakdown structure (RBS); To undertake qualitative risk
effectiveness of the qualitative the area of the project affected (e.g., analysis, the project team may
analysis of individual project risks. using the work breakdown structure conduct a specialized meeting
(often called a risk workshop)
(WBS);
dedicated to the discussion of
identified individual project risks.
 OUTPUTS
PROJECT DOCUMENTS UPDATES
Project documents that may be updated as a result of carrying
out this process include but are not limited to:

Assumption log. Issue log Risk Register Risk Report

During the Perform Qualitative Risk The issue log should The risk register is The risk report is updated to
Analysis process, new assumptions updated with new reflect the most important
may be made, new constraints may be updated to information individual project risks (usually
be identified, and existing capture any new generated during those with the highest
assumptions or constraints may be
issues uncovered or the Perform probability and impact), as
revisited and changed. Qualitative Risk well as a prioritized list of all
changes in currently
Analysis process identified risks on the project
logged issues. and a summary conclusion.
Perform
Quantitative Risk
Analysis
Quantitative risk analysis focuses on measuring the
probability of individual risk factors appearing. This
probability can be considered as objective or subjective. A
key adventages of this proces is that quantifies the overall
risk exposure of the project, and provides additional
quantitative risk information to support Risk respons
planning.
 Perform Quantitative Risk
Analysis
Inputs Tools & Techniques Outputs
1. The risk register 1. Export judgment
1. Risk register updates
2. The risk management plan 2. Data gethering
3. Schedule management plan 3. Interpersonal and team skills
4. Enterprise environmental 4. Representation of uncertainty
factors 5. Data analysis
Simulations
5. Organizational proces assest
Sensitivity analysis
Decision tree analysis
Influence diagrams
 FIVE INPUTS TO PERFORM
QUANTITATIVE RISK ANALYSIS
The risk register- project
documents
There are many project documents that can be
considered as input to this particular process.

Risk register contains a list of all identified risks

present on the project and includes information on
such as their answers, their recordings in a category.
The risk management plan
QUANTITATIVE RISK ANALYSIS- INPUTS

This document is in fact the risk management

strategy because it defines the level of risk which
is seen as tolerable, how such risks will be
managed, who will be responsible for carrying out
the risk activities, the time and cost aspects of
each risk activity and how the communication of
risk is to occur.
SCHEDULE MANAGEMENT PLAN
QUANTITATIVE RISK ANALYSIS- INPUTS

Because the schedule timings are

presented in a quantifiable
manner then risks concerned with
timing and time scales can easily
be quantified within this process.
Enterprise
environmental factors
QUANTITATIVE RISK ANALYSIS- INPUTS

Enterprise Environmental Factors are any or

all environmental factors either internal or
external to the Project that can influence the
Project's success.
The enterprise environmental factors that may
influence the performance of a quantitative risk
analysis include, but are not limited to industry
studies on similar projects, and
published materials, including commercial
databases or risk checklists.
 The organizational process
Organizational assets that can influence the
process assest Perform Quantitative Risk
QUANTITATIVE RISK ANALYSIS- INPUTS Analysis.
These may consist of risk
templates, policies procedures or
guidelines, lessons learned from
previous or similar projects, and
any quantitative risk tools.
 Tools and
techniques
used in
Quantitative
risk analysis
EXPERT JUDGMENT
QUANTITATIVE RISK ANALYSIS-TOOLS & TECHNIQUES

In a similar way to carrying out a

structured interview, this would
normally involve asking experts to
review your risk data and the manner in
which it has been gathered. As a
consequence these experts may also
identify additional risk areas.
DATA GATHERING
QUANTITATIVE RISK ANALYSIS-TOOLS & TECHNIQUES

This covers the tool and techniques of carrying out a

structured interview to determine be probability and
impact of risks from subject matter experts. These
experts must have the knowledge skills and experience
sufficient to form a realistic view of such probability
and impacts.
Rather than ask each expert for a single value for each,
the project manager would normally encourage each
experts to provide an optimistic, pessimistic and
realistic probability and impact value for each risk.
 INTERPERSONAL
AND TEAM SKILLS
QUANTITATIVE RISK ANALYSIS-TOOLS & TECHNIQUES

Interpersonal and team skills that can be used in this process

include facilitation. A skilled facilitator is useful for gathering
input during special risk workshops with project team members
and other stakeholders.
Workshops with a facilitator can increase effectiveness by:

ensuring using creative

building consensus approaches to deal
continued focus
with interpersonal
on the task among participants conflict or sources
of bias
REPRESENTATIONS
OF UNCERTAINTY
QUANATITATIVE RISK ANALYSIS-TOOLS & TECHNIQUES

Where the duration, cost, or resource requirement for a

planned activity is uncertain, the ranges of possible values
can be represented in the model as a probability distribution.
These are usually presented on my table or graph and
represent mathematically the probability of a risk events
occurring. These probability distributions aid decision-making
by considering the real probability of it happening and using
this determine the best way to approach each risk.
DATA ANALYSIS
QUANATITATIVE RISK ANALYSIS-TOOLS & TECHNIQUES

Data analysis techniques that Sensitivity analysis

can be used during this process.
This involves analysing the
Simulations project to determine how
sensitive is to particular risks by
The most common form of this is analysing the impact and
Monte Carlo analysis which is severity of each risk.
normally calculated by computer
by analysing many scenarios for
the project schedule and
calculating the impact of
particular the risk events and is
helpful in identifying risks and
the effect they have on the
project schedule.
 DATA ANALYSIS
QUANTITATIVE RISK ANALYSIS-TOOLS & TECHNIQUES

Decision tree analysis Influence diagrams

These are in the form of a flow Influence diagrams are
diagram where each node, graphical aids to decision
represented by a rectangle, contains making under uncertainty.
a description of the risk aspect and An influence diagram
its cost. These rectangles are linked represents a project or
together via arrows each arrow situation within the project
leading to another box representing as a set of entities,
the percentage probability. These outcomes, and influences,
totals are calculated by multiplying
together with the
the risk costs by the probability and
relationships and effects
adding that value to the initial cost. 50

between them.
40

30

20
Output from
Risk register updates
Quantitative risk
analysis It is worth mentioning here are the risk is anything
that may impact the objectives of a project, and
this therefore must include positive and negative
impacts. A negative impact risk is defined as a
threat, and a positive impact risk is defined as an
opportunity. Risk responses for threats should act
two reduce the probability or impact, whereas risk
response is for opportunities would want to
maximize both the probability and impact should
such a risk still occur.
Plan risk
responses
IDENTIYING APPROPRIATE WAYS TO ADRESS
OVERALL PROJECT RISKS AND INDIVIDUAL
PROJECT RISKS
- Data gathering
- Data analysis
Alternative analysis
Cost-benefit analysis
Impact of individual project risks expressed in money/implementation cost
 Escalate

Avoid

Strategy for Transfer

threats
Mitigate

Accept
Strategy for
opportunities

Escalate Exploit Share Enhance Accept

 Strategy for
overall project
risks
AVOID
EXPLOIT
TRANSFER/SHARE
MITIGATE/ENHANCE
ACCEPT
 IMPLEMENT RISK RESPONSES
Risk response implementation is the process of implementing agreed risk
response plans

Inputs Tools and methods Outputs

Project management plan Expert judgment 1.Change Requests
Risk Management Plan Interpersonal and 2. Project Document Updates
2. Project Documents team skills issue log
Lessons learned register Influencing Lessons learned register
Risk register 3. Project Project team assignments
Risk Report management Risk register
3. Organization Process Assets information system Risk Report
 Project management plan components include
but are not limited to the risk management plan.
The risk management plan lists the roles and
responsibilities of project team members and
PROJECT other stakeholders for risk management. This
information is used when allocating owners for
MANAGEMENT agreed-upon risk responses. The risk
PLAN management plan also defines the level of detail
for the risk management methodology for the
IMPLEMENT RISK RESPONSES: INPUTS project. It also specifies risk thresholds for the
project based on the risk appetite of key
stakeholders, which define the acceptable target
that the implementation of risk responses is
required to achieve.
 Lessons learned register
PROJECT Lessons learned earlier in the project with regard to
implementing risk responses can be applied to later phases in
DOCUMENTS the project to improve the effectiveness of this process.

Risk register
The risk register records the agreed-upon risk responses for
each individual risk and the nominated owners for each
response plan.

Risk report
The risk report includes an assessment of the current overall project risk
exposure, as well as the agreed-upon risk response strategy. It also
describes the major individual project risks with their planned
responses.
 ORGANIZATIONAL PROCESS ASSETS

The organizational process assets

that can influence the Implement Risk
Responses process include but are
not limited to the lessons learned
repository from similar completed
projects that indicate the
effectiveness of particular risk
responses.
 TOOLS AND TECHNIQUES
PROJECT MANAGEMENT
EXPERT JUDGMENT INTERPERSONAL AND TEAM SKILLS
INFORMATION SYSTEM

Expertise should be Interpersonal and team skills Project management

considered from individuals that can be used for this information systems can
or groups with specialized process include but are not include schedule, resource, and
knowledge to validate or limited to influencing. Some cost software to ensure that
modify risk responses if risk response actions may be agreed-upon risk response
necessary, and decide how owned by people outside the plans and their associated
to implement them in the immediate project team or activities are integrated into
most efficient and effective who have other competing the project alongside other
manner. demands. project activities.
IMPLEMENT RISK RESPONSES:
OUTPUTS
CHANGE REQUESTS
Implementation of risk responses may
result in a change request to the cost
and schedule baselines or other
components of the project management
plan. Change requests are processed for
review and disposition through the
Perform Integrated Change Control
process
 PROJECT DOCUMENTS UPDATES
Issue log Lessons learned Project team
assignments
Risk register Risk report
register
Where issues The lessons Once the risk The risk register The risk report
are identified as responses are may be updated may be updated
learned confirmed, the to reflect any to reflect any
part of the
Implement Risk register is necessary changes to the changes to the
resources should be previously previously
Responses updated with allocated to each agreed-upon risk agreed-upon risk
process, they are
information action associated responses for response to
recorded in the with a risk response individual project overall project
issue log. on challenges plan. risk exposure
risks
MONITORING RISKS
The process of monitoring the implementation
of agreed-upon risk response plans, tracking
identified risks, identifying and analyzing new
risks, and evaluating risk process
effectiveness throughout the project.
 TECHNICAL PERFORMANCE ANALYSIS

Analysis
RESERVE ANALYSIS
Other tools

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THANK YOU
FOR YOUR
ATTENTION!