Project Based Risk Management Defusing a potential ticking time bomb What is Risk Management? Why do we need to manage Project Risk? How do we manage Project Risk? This is where the “voice over” text would be displayed for those that do not have speakers on their computer. PMM Risk Management

What is Risk? Risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives. PMBOK® Third Edition PMM Risk Management

Risks That Can Effect a Project The technology used on the project The environment in which the project is executed The relationships between team members How well the project fits the culture or business area or strategic objectives of the agency How great of a change will result from the project PMM Risk Management

Project Risk can increase when you have: Lack of resources Lack of communication and information Lack of authority and/or responsibility PMM Risk Management

Using Risk Management to Plan Identify risk mitigation strategies How can we fix it? Are we working on the “right” risks? Identify risk contingency strategies If we can’t fix it, how do we do it differently? Develop Action Plans Prioritize items Minimize impact Don’t over-correct PMM Risk Management

PMM Risk Management Steps

Risk Management Strategy Development Decide on a Risk Management Methodology Identify Risk Assumptions Define Risk Management Roles and Responsibilities Define Risk Management Timeframes Define Risk Communication Strategy Define How Risks Are to be Tracked Define any Risk Thresholds Define Ranking/Scoring Techniques PMM Risk Management

Identifying Risk Some Techniques: Brainstorming SME Interviews All team members participate - include stakeholder perspectives Initially list all potential risks, no matter how small Watch for contradictory information SME Interviews Project Documents Deliverable Descriptions Specifications Documents PMM Risk Management

Identifying Risk (continued) Categorizing Risks Technical, Quality, or Performance risks Project Schedule risks Project Management risks Organizational risks External risks PMM Risk Management

Risk Analysis Qualitative Analysis Individual Risk Ranking Probability/Impact Matrix (below) Overall Risk Ranking of the Project PMM Risk Management

Risk Analysis (continued) Quantitative Analysis Sensitivity Analysis Decision Analysis Note: Not every Risk needs Quantitative Analysis – only those that need to be highly quantified, such as needing to determine certain cost and time objectives for the project. PMM Risk Management

Risk Response Planning Risk Avoidance Eliminate Cause Risk Transfer Purchase Insurance Subcontract high risk tasks Risk Mitigation Minimize Probability Minimize Impact Risk Acceptance Contingency Plans PMM Risk Management

Risk Monitoring and Control Using the Risk Management Plan to monitor risk (periodically reviewing the known risks) and controlling risk (mitigating and tracking known risks) Dealing with actual risk events (taking corrective action) Identifying new risks Updating the Risk Management Plan PMM Risk Management

PMM Risk Management Template General Info Risk Management Strategy Risk Identification Qualitative and Quantitative Analysis Risk Response Planning PMM Risk Management

State of Michigan Project Management Methodology (PMM) More information on Risk Management can be found in the PMM starting on page 3-70 PMM Risk Management