Project Risk Management

PMBOK 6 Ed.
– DEI-
Every project is
risky, meaning
there is a chance
things won’t
turn out exactly
as planned.
percent of runaway
projects
“ Did no risk management at

all 38 percent did some, and 7
percent were not sure whether
they did risk management or
not” (KPMG,1995)
Project Risk
Planning, identifying, analyzing, responding &
monitoring to risk throughout the life of a project and
in the best interests of meeting project objectives.
Project Risk Objective
Increase or decrease
the probability and impact of
Positive risk/
Negative risk/ opportunities
threats
Terms & Concept
– Uncertainty: a lack of knowledge
about an event that reduces
confidence
– Risk adverse: someone who

does not want to take risks.
Terms & Concept
– Risk tolerances: area of risk that
are acceptable/unacceptable.
– Risk thresholds/apetite: high level

of individual/group’s openness to
risk
Terms & Concept
– Threshold is a measurement amount of risk that

individual/group willing to accept a specific of
category
– the point at which a risk become unacceptable
The Advantages
of Project Risk
Management
Better Scope
Better Project
Selection
Better Schedulling
Realistic Cost
Budgeting
Project Management Maturity by industry group
Risk is not big attention among industrial group

Introduction
Risk Survey
• Remember that in this area there is no activity in executing process
group
Project Risk Plan Risk

Identify Risks
Perform Qualitative Risk Analysis
Perform Quantitative Risk Analysis
Plan Risk Responses
Implement Risk Responses
Monitor Risks
Monitoring &
Controlling Processes
Planning
Processes
Enter phase/ Initiating Closing Exit phase/

Start project Processes Processes End project
Executing
Processes
Process
Knowledge
Area Monitoring &
Initiating Planning Executing Closing
Control
Plan Risk Management
Identify Risk Monitor
Perform Qualitative Risk Implement Risk
Control
Scope Analysis Response
Perform Quantitative Risk Risk
Analysis
Plan Risk Response
Plan Risk
The process of defining how to conduct risk
management activities for a project.
Inputs
1. Project Charter Tools &
2. Project Techniques
Outputs
Management 1.Expert Judgement 1. Risk
Plan
2. Data Analysis Management
3. Project
Documents
3. Meetings Plan
4. EEF
5. OPA
Plan Risk
• Source of risk is RISK CATEGORY

– A standard list of risk categories can help to
make sure areas of risk are not forgotten.
– Companies and PMO should have standard list of
risk categories to help identify risk.
– Resource Breakdown Structure=RISK
Category
Risk Category
• External: EEF, regulatory, market shift

• Internal: inexperience tem, staffing, issues, changes to
schedule, scope, equipment, material
• Technical: changes in technology, technical process
• Commercial: customer stability, terms and cond within
contract vendor
• Unforeseeable: small portion of risk, only 10 %
Risk Cause
• The customer
• Lack of project management effort
• Lack of knowledge management by PM and stakeholder
• The customers 'customer
• Supplier
• Resistance to change
• Cultural differences
Source of risk
• Schedule
• Cost
• Quality
• Scope
• Resources
• Customer satisfaction
2 main type of risk
Pure (insurable)
Business risk – Only a risk of
Risk of gain Loss loss (i.e. fire, theft,
personal injury,
etc)
Risk Management Plan
Risk Strategy Stakeholder Risk
Methodology Appetite
Roles & Definitions of Risk
Responsibilities Probability & Impact
Funding Probability and Impact
Timing Matrix
Risk Categories Reporting Formats
Tracking
Example of RBS
THE POTENTIAL RISK
IN KNOWLEDGE AREA
INTEGRATION
Inadequate planning, poor resource

allocation, poor integration
Management, lack of post-project
review
SCOPE
Poor definition of scope or work packages;

incomplete definition
COST
Estimating errors; inadequate

productivity, cost, change, or
contingency
QUALITY
Poor attitude toward quality

substandard design, materials,
and
Workmanship, inadequate quality
assurance program
COMMUNICATION
Carelessness in planning or
communicating
HUMAN RESOURCE
Poor conflict management; poor project

organization and definition of
responsibilities; absence of leadership
RISK
Ignoring risk; unclear analysis of

risk; poor insurance management
PROCUREMENT
Unenforceable conditions or
contract clauses; adversarial
relations
STAKEHOLDER
Lack of consultation with

key stakeholder
Identify Risk
• The process of identifying individual risks as well
as source of overall project risk and
documenting their characteristic
Inputs Tools & Techniques Outputs
1. Project 1. Expert Judgment
Management Plan 1. Risk Register
2. Data Gathering
2. Project 2. Risk Report
Documents 3. Data Analysis
4. Interpersonal and 3. Project
3. Agreements
Team Skills Documents
4. Procurement
Updates
Documentation 5. Prompt Lists
5. EEF 6. Meetings
6. OPA
Identify Risk
• Risk should be continually reassessed
(iterative) such as in integrated change
control activity
• Information gathering techniques
– Brainstorming
– Delphi technique
– Interviewing:
– Root cause analysis
– SWOT
SWOT Strengths,
Weaknesses, Opportunities,
Threats
Opportunities
STRENGTHS
WEAKNESS
Threats
Cause & effect
diagram
Risk Register
Risk Register
Reference
• Rita Mulcahy’s, PMP Exam
Prep Ninth Edition. 2018
• PMBOK Guide Sixth Edition. 2018.

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PMBOK 6 Ed.

“ Did no risk management at

– Risk adverse: someone who

– Risk thresholds/apetite: high level

– Threshold is a measurement amount of risk that

Risk is not big attention among industrial group

Project Risk Plan Risk

Enter phase/ Initiating Closing Exit phase/

• Source of risk is RISK CATEGORY

• External: EEF, regulatory, market shift

Inadequate planning, poor resource

Poor definition of scope or work packages;

Estimating errors; inadequate

Poor attitude toward quality

Poor conflict management; poor project

Ignoring risk; unclear analysis of

Lack of consultation with

• PMBOK Guide Sixth Edition. 2018.

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