Part 5 – Risk Management

• Introduction to Risk Assessment

• Contingency planning

• A model for adaptative Project management

INTRODUCTION TO RISK ASSESSMENT

Risk management
- The process of identifying, assessing and
controlling threats to an organization's capital and
earnings. These risks stem from a variety of
sources including financial uncertainties, legal
liabilities, technology issues, strategic
management errors, accidents and natural
disasters.
Risk assessment
- The identification of hazards that could negatively
impact an organization's ability to conduct business.
These assessments help identify these inherent business
risks and provide measures, processes and controls to
reduce the impact of these risks to business operations.

Risk assessment is the name for the three-part process

that includes:
• Risk identification
• Risk analysis
• Risk evaluation
 Step 1: Identify the hazard.
• Risk Assessment Process

Step 2: Decide who might be harmed

Step 3: Evaluate the risk and decide on the
precautions
Step 4: Record the findings and put them into
place
Step 5: Review the risk assessment
5 Types of Risk Assessment

1. Qualitative Risk Assessment

2. Quantitative Risk Assessment
3. Generic Risk Assessment
4. Site-Specific Risk Assessment
5. Dynamic Risk Assessment
CONTINGENCY PLANNING
Within the early stages of the project, the team
participates in activities that explore risk factors, which
may negatively impact the project. Of major importance
to the project, is not only to identify the risks, but also to
determine how the team will address them. This is done
through the four components of project risk management:
1. Risk identification
2. Risk quantification
3. Risk response development; and
4. Risk response control
4 steps of Risk Management
1. Risk identification
One of the first tasks the project manager and the
project team participate in is the identification of the
risks that may impact the project. The initial step is to
identify events that pose a threat or risk to the project's
success.
Two types of risks
Internal risks are those “things that the project team
can control or influence” .
External risks are those “things that are beyond the
control of the project team”.
2. Risk quantification
The purpose of risk quantification is to determine which
risks would be most detrimental to the project, should they
occur. The next step after quantification is to address these
risks.
A basic concept involves both the project manager and the
team as they determine the probability of the risk occurring.
Some procedures attach a numerical probability (percentage)
to each risk. Another procedure may rate each risk using a
scale of high, medium or low as a form of evaluation. In some
cases, subject matter experts may assist the team by helping to
assess and determine the risk occurrence.
3. Risk Response Development
 Mitigation addresses risk before manifestation and
attempts to reduce its impact before occurring (in the
example of the risk that our online data storage is too
small, we can buy more storages space now).
 Contingency addresses the risk at the time the event
occurs and attempts to reduce its negative effects. In
the example of the snow storm, we can put in place a
communications plan, and arrange for people who can
walk to work to be here on time.
Elements of a contingency plan:
a. Scenarios
Refer to your risk assessment and impact/probability
charts and choose the most damaging or most likely
scenarios that you want to plan for.
b. Triggers
Specify what, exactly, will cause you to put your
contingency plan into action.
c. Response
Include a brief overview of the strategy that you will
follow in response to the event. This provides a context for
the actions that you ask your people to take.
d. Who to Inform
Identify the people who need to know about what's
happened. This could include employees, suppliers,
customers, and the wider public, as appropriate.
e. Key Responsibilities
Define who's responsible for each element of the plan,
who will be in charge at each stage, and what you expect
them to accomplish.
f. Timeline
State what needs to be done within the first hour, day and
week of the plan being implemented.
4. Risk Response Control
Risk response control “involves executing the risk
management plan in order to respond to risk events over
the course of the project.
A MODEL FOR ADAPTATIVE
PROJECT MANAGEMENT

What is Adaptive Project Framework (APF)?

Adaptive project management is a systematic and

structured approach in which you gradually improve
your decisions and processes, based on the outcomes of
the decisions made in the earlier stages of the project.
Why Do You Need Adaptive Project Management?
Work: Advancement of technologies changed the
pace of work
Strategy: These are becoming more dynamic and
difficult to predict
People: Working in a more collaborative
environment to create a real team culture
How Does the Adaptive Project Framework (APF) Work?
1. Project Scope
To begin with any project, it is important to first
identify the objectives of the project. What are the client’s
requirements? What are the expectations? Members from
both your organization and the client’s side need to
collaborate to lay down certain things.
2. The Cycle Schedule
As the project scope is now clear, it’s time to break
down the project into mini-projects or adaptive
management cycle/iterations. Each cycle should be planned
with the aim to provide one or more deliverables. 
3. The Cycle Build
The actual work begins in this phase. The team members start
working on the allotted tasks. As the team progresses, cycles can
be adjusted. All the pending tasks that hadn’t been completed due
to changes in some requirements move to the next cycle. 
4. The Client Checkpoint
The client checkout phase is the most essential part of the
adaptive framework. It is time to get an evaluation of the
deliverables or outcome of the cycle build phase. The client
should thoroughly review the quality and provide
feedback/suggestions.
5. The Final Report
At the end of the project, it is important to evaluate the success
of the project. The project manager, team, and client can all
collaborate and communicate to determine the success points and
to talk about downfalls if any.
Benefits of Adaptive Project Management
Focus on Client
Client-driven
Focus on Change
Prioritization
Continuous Feedback