Project Risk Management: Nitishree Upadhyay Sanam Shrestha Sayar Prajapati Sushrut Gautam
Project Risk Management: Nitishree Upadhyay Sanam Shrestha Sayar Prajapati Sushrut Gautam
• Nitishree Upadhyay
• Sanam Shrestha
• Sayar Prajapati
• Sushrut Gautam
Introduction
A project risk is an uncertain event that may or may not occur during a project. If it
occurs it has a positive or negative effect on a project objective.
The notion of project risk involves two concepts:
I. The likelihood that some problematic event will occur.
II. The impact of the event if it does occur.
Types of Project Risk
A.External risk:
Mainly outside the control of the project manager and in most case the organization.
Examples:
Market risks- include competition, foreign exchange, internal rate risk
Government regulatory changes
Disaster such as flood, fire, earthquake, or other natural disaster
Risk associated with labor strikes, and civil unrest
Communication system and security sensor failures
B. Cost Risk:
Directly or indirectly under project manager’s control
Cost risk usually arise due to poor cost estimation, accuracy and scope creep
Examples:
Cost overruns by project team or subcontractors, vendors, and consultants
Poor estimation or errors that result in unforeseen costs
Overrun of budget and schedule
Project Risk
Schedule Risk
Can cause project failure by missing or delaying a market opportunity for a product or service
the risk that activities will take longer than expected
Slippages in schedule typically increase cost, delay the receipt of project benefits
Schedule risk are caused by:
Inaccurate estimation, resulting in errors
Increased effort to solve technical, operational, and external problems
Resource shortfalls, including staffing delays, insufficient resources
Unplanned resource assignment- loss of staff due to other higher priority projects
D. Technology risk
Failure to meet system target functionality or performance expectations
It is the risk that project will fail to produce results consistent with project specifications
Examples:
Problems with immature technology
Use of wrong tools
Software that is untested or fails to work properly
Project Risk
E. Operational Risk
Characterized by an inability to implement large scale change effectively
This risk can result in failure to realize the intend or expected benefit of the project
New technology
It often plays an important role in project risk analysis , since it might force
project members to change the strategy of project or revise the technology used,
Its impact in a project is significantly increased project time and cost
Risk management
Risk management is an important practice that helps to identify, evaluate, track, and
mitigate the risks present in the business environment. The process involves:
Risk management
planning
Identifying the
risk
Qualitative risk
Risk
monitoring Analysis of risk
Quantitative risk
Prioritization of
Solution risk
implementation
Risk management planning
It is the process of deciding how to plan and execute risk management activities for a
project.
Objectives:
• Establish basis for evaluating risk
• Ensure risk management effort is proportionate to both risk and importance of
project
• Provide enough resources for risk management activities
Risk management Plan(RMP)
It is the document prepared after the risk management planning meeting.
It involves:
Methodology
Roles and responsibility
Timing
Budgeting
Risk categories and risk breakdown structure
Risk probability and impacts
Revised stakeholder’s risk tolerances
Reporting format
Tracking
Risk Identification
It is the process of identifying the risk with the involvement of various participants of
project.
The participants can be project team, risk management team, subject matter experts,
customers and users.
It is an iterative process and its objectives are:
To determine the risks that may affect the project
To document their characteristics in Risk Register
Risk response planning
Risk response planning addresses the matter of how to deal with risk.
Risk response planning is the process of developing options and determining
actions to enhance opportunities and reduce threats to the project`s objectives.
It includes the identification and assignment of individuals or parties to take
responsibility for each agreed risk response.
c). Enhance
Improve chances for the event to happen so the opportunity becomes more certain.
Increase the likelihood of occurrence of impact of the event.
Monitoring identified and residual risk, identifying new risks, executing risk
response plan and evaluating their effectiveness throughout project life cycle.