1. Risk Analysis Objectives Discuss the importance of Risk Analysis
Define the relationship between the critical success factors and risk analysis
Define the risk analysis method
Explain the approach of risk analysis
Discuss the techniques followed to mitigate the identified risks on ERP implementation

2. Significance of Risk Analysis
Fact: ERP implementation is risky
Risks: Complete failure, failing to achieve some of the objectives, prolonged implementation or over budget
Critical Success Factor (CSF): A condition to achieve objective
Risk : A potential occurrence of an event that will have a negative impact on achieving objectives.
Failing to attain one of the CSFs puts the ERP implementation at risk

3. Identified Risks Cost overruns
Partial or no realization of projected benefits
No improvement in financial performance:
Unhealthy small companies
Healthy large companies
Operational problems in go-live phase

5. Risk Analysis Method Risk analysis steps: Risk identification
Risks are always there. Identification of risks and proper planning to mitigate its effects leads to the successful achievement of organizational goals
Risk analysis steps:
Risk identification
Risk assessment
Design of controls

6. Risk Identification Risks List
Create a list of events that could negatively impact the attainment of the objectives of ERP implementation
Risks List
Cost overruns
Partial or no realization of projected benefits
No improvement in financial performance
Operational problems in go-live phase
Other project or company - specific potential events

7. Risk Assessment Risk Severity
Determine to which extent each of the identified risks is a threat to the attainment of the objectives of ERP implementation
Risk Severity

8. Design of Control Measures ( Controls) Controlled Risk Severity
Reduce the severity of the identified risk
Controlled Risk Severity

9. Controls classes
Evasion
Reduction
Transfer
Acceptance

10. Risk Analysis Approach
Make a distinction between the analysis CSFs and Risks
CSFs Analysis:
Top Management Support: Endorsement and approval
Ownership: Top management team appointment in implementation team
Users Involvement: rigorous communication strategy and integration of ERP objectives into organizational strategy.

11. Risk Analysis Approach
Risk identification
Severity determination
Design control measures

12. Risk Analysis Approach

13. Risk Analysis Team Team knowledge and composition: Risk manager(s)
Risk analysis is treated as a subproject of ex ante phase
Team knowledge and composition:
Risk manager(s)
Project manager(s)
Organizational processes experts
Internal, operational and IT auditors

14. Risk Analysis Tools and Techniques
Risk identification:
Interviews
Workshops
Reviewing project evaluation and audit reports.
Risk Assessment:
Scenario and what-if analysis
Benchmarking
Sensitivity analysis
Statistical methods, example : Value-at-risk and flow-at-risk
Risk analysis results are never complete !! Why?