Presented by: Andrea Miller, PMP

Objectives Understand your project's risk How to plan your contingencies How to identify when your contingencies should be implemented

Plan Risk Management Source: PMBOK Guide – Fourth Edition

Project Application - Planning First choose your perspective: Owner/Financial Stakeholder Contractor Government Official PM in a Matrix Organization Insert your role here:_________ Methodology: The risk perspective will be different for each entity listed. Know who you are planning for before you start.

Project Application - Planning SCOPE risk ~scope creep/late changes COST MANAGEMENT risk ~risk budgets/contingencies/reserves SCHEDULE risk ~total float/ activity float management COMMUNICATION risk ~sharing of information ENVIRONMENTAL FACTORS risk ~risk tolerance ORGANIZATIONAL PROCESS ASSETS risk ~categories, formats, templates, roles and responsibilities

Project Application – Planning The output is the Risk Management Plan at this point, this plan will outline how to manage the risk not identify the risk. Scenario: You are a project manager in a matrix organization tasked to implement a new communication technology. Your project is to organize, train and demonstrate the effectiveness of this new technology to the entire business unit. This project is directly in-line with the strategic objectives of the organization so failure/project closure is not an option. Additionally, you are in a foreign country and dependant on that country’s satellites for the demonstration.

Project Application – Planning The risks will be approached from the project management perspective in contrast to a hierarchical approach through the functional managers The PM will have the delegated authority from the business unit managers to get all resources needed to complete the project Timing to resolve risks will be dependant on the amount of float that activity has within the overall schedule Risk activities will be assigned through a RBS (insert RBS here) Probabilities will be assigned through a impact matrix (insert matrix here) Risk tolerance is low based on the necessity for this project to be successful The reporting format will be conducted weekly The project will be tracked through a living document saved in a central electronic location retrievable by all stakeholders (updated as needed)

Identify Risks Source: PMBOK Guide – Fourth Edition

Project Application – Risk Register Lack of delegation from functional managers Classroom resources availability Training materials for classrooms preparation Reliability of foreign satellites Assurance of foreign satellite time Equipment deliveries from manufacturer Foreign customs for equipment from over seas Equipment accountability when under company individual control/ hand receipt organizational process Communication of operational change to workers Training schedules development and communication

Perform Qualitative Risk Analysis Source: PMBOK Guide – Fourth Edition

Project Application – Risk Register Updates Based on Probability High Risk Group Lack of delegation from functional managers Assurance of foreign satellite time Foreign customs for equipment from over seas Medium Risk Group Reliability of foreign satellites Equipment deliveries from manufacturer Training schedules development and communication Low Risk Group Classroom resources availability Equipment accountability when under company individual control/ hand receipt organizational process Communication of operational change to workers

Perform Quantitative Risk Analysis Quantitative Risk assesses the impact of a risk if it occurs. This impact may be financial, schedule, political, etc. Many numerical analysis method exist to develop this impact – these methods are a separate presentation This presentation will demonstrate the effect of this analysis on the risk register

Project Application – Risk Register Updates Based on Probability and Impact High Risk Group Lack of delegation from functional managers Assurance of foreign satellite time Foreign customs for equipment from over seas Equipment accountability when under company individual control/ hand receipt organizational process (moved up from the Low Risk Group) Medium Risk Group Reliability of foreign satellites Equipment deliveries from manufacturer Training schedules development and communication Low Risk Group Classroom resources availability Communication of operational change to workers

Plan Risk Responses Depending on how much planning time, the contingency plans developed may be for all risks identified or a set of risks. The outcome of the response planning process may change other project management documents (schedule, cost, quality, procurement, etc.) For this presentation we will develop only the High Risk Group

Project Application – Contingency Plans Lack of delegation from functional managers – Gain the endorsement of the highest ranking official in the organization needed to ensure the project success and use this endorsement only when absolutely necessary Assurance of Foreign Satellites – If the main country satellites do not work, plan to use the next countries satellites. All the work of this contingency plan must be done concurrently with the main plan in order to ensure success Foreign Customs for Equipment Delivery – Assume the initial plan is to correspond over electronic communication (written and verbal) with contracts, but this proves not to work. The contingency is to have a person physically at the port and escort the material to the right location Equipment Accountability The person in charge of the hand receipt process may need to be reassigned to different duties

Monitor and Control Risk Source: PMBOK Guide – Fourth Edition

Project Application – Implement Contingency Plans Scenario: Your project is underway and the equipment has arrived without issue. All parts are accounted for by some worker in the company. Classroom resources are reserved and all the learning materials are developed/printed. Then you find out from a worker through a conversation at the water cooler that a portion of the company will not be available on the date assigned for training. Their direct supervisor scheduled a different meeting at the same time. When you get back to your office you get a phone call that one of your classroom reservations were cancelled for next week’s classes.

Project Application – Initiate Contingency Plans Use the influence of senior leader of the company to ensure that the individuals attend the training Use contingency funds to reserve classroom resources at a local hotel Update the risk register

Project Application – Update Risk Register High Risk Group Lack of delegation from functional managers Assurance of foreign satellite time Foreign customs for equipment from over seas Equipment accountability when under company individual control/ hand receipt organizational process (moved up from the Low Risk Group) Medium Risk Group Reliability of foreign satellites Equipment deliveries from manufacturer Training schedules development and communication Classroom resources availability Low Risk Group Communication of operational change to workers

Feedback – More In Depth Study? Possible Topics: How to budget for risk. How to shed risk through procurement. Are insurance and bonds appropriate tools for your project? Learn the Quantitative and Qualitative Analysis Techniques used to assess risk.

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