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PRM 702 Project Risk Management Lecture #28
PMI’s Project Risk Management Processes II of II Ghazala Amin
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Plan Risk Management Risk management planning is the process of deciding how to approach and plan the risk management activities for a project. The process of developing and documenting an organized, comprehensive and interactive strategy and methods for identifying and analyzing risks, developing risk response plans, and monitoring and controlling how risks have changed.
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Plan Risk Management Inputs Project scope statement
Cost management plan Schedule management plan Communications management plan Enterprise environmental factors Organizational process assets
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Plan Risk Management Tools & techniques Planning meetings and analysis
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Plan Risk Management Outputs Risk management plan
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Risk Identification Involves determining which risks might affect the project and documenting their characteristics. The process of examining the program areas and each critical technical process to identify and document the associated risk.
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Risk Identification Inputs Risk management plan
Activity cost estimates Activity duration estimates Scope baselines Stake holder baseline Cost management plan Schedule management plan Quality management plan Project planning documents Enterprise environmental factors Organizational process assets
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Risk Identification Tools & techniques Documentation reviews
Information gathering techniques Checklists analysis Assumption analysis Diagramming techniques Expert judgment SWOT Analysis
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Risk Identification Outputs Risks register
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Plan Risk Analysis The process of examining each identified risk to
Estimate the probability And predict the impact on the project. It includes: Qualitative Risk Analysis Quantitative Risk Analysis
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Qualitative Risk Analysis
The process of assessing the impact and likelihood of identified risks Risk analysis includes Evaluating Probability that a risk would occur Impact of the risk if it occurs Time frame in which it might occur Frequency of risk occurrence Prioritizing Prioritize to ensure right amount of management attention
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Qualitative Risk Analysis
Inputs Risk register Risk management plan Project scope statement Organizational process assets
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Qualitative Risk Analysis
Tools & Techniques Risk probability and impact Probability and impact matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment
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Qualitative Risk Analysis
Outputs Risk register updates
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Risk Rating System High Moderate Low
Likely to cause significant disruption to schedule, increase in cost or degradation of performance Moderate Has potential to cause some disruption as above, will probably overcome difficulties Low Has little potential to cause disruption to schedule, cost or degradation of performance
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Quantitative Risk Analysis
Aims to analyze numerically the probability of each risk and its consequence on project objectives
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Quantitative Risk Analysis
Inputs Risk management plan Risk register Cost management plan Schedule management plan Organizational process assets
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Quantitative Risk Analysis
Tools and Techniques Data gathering and representation techniques Quantitative risk analysis and modeling techniques Expert judgment
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Quantitative Risk Analysis
Outputs Risk register updates
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Risk Response Planning
Process of developing options and determining actions to enhance opportunities and reduce threats to the project’s objectives The process that: identifies, evaluates, selects and implements one or more strategies, in order to set risk at acceptable levels given program constraints and objectives. This includes the specifics on What should be done When it should be accomplished Who is responsible And associated cost and schedule.
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Risk Response Planning
Risk response options include: Acceptance Avoidance Mitigation Transfer
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Risk Response Planning
Opportunity response options include: Acceptance Enhance Exploit Share
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Risk Response Planning
Inputs Risk management plan Risk register
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Risk Response Planning
Tools & Techniques Strategies for negative risks or threats Strategies for positive risks or opportunities Contingent response strategies Expert judgment
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Risk Response Planning
Outputs Risk register updates Risk related contract decisions Project management plan updates Project document updates
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Reserves Contingency Reserve
A separately planned quantity used to allow for future situations which may be planned for only in part Also known as “known unknowns” May involve cost, schedule or both BAC = Budget at Completion Management Reserves Contingency Direct & Indirect Costs
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Reserves Management Reserve
A separately planned quantity used to allow for future situations which are impossible to predict Also known as “unknown unknowns” May involve cost, schedule or both BAC = Budget at Completion Management Reserves Contingency Direct & Indirect Costs
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Insurance Strategies Direct Property Damage
Indirect Consequential Loss Legal Liability Personnel
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Risk Monitoring and Control
Inputs Risk register Project management plan Work performance information Performance reports
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Risk Monitoring and Control
Tools & Techniques Risk reassessment Risk audits Variance and trend analysis Reserve analysis Technical performance measurement Status meetings
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Risk Monitoring and Control
Outputs Risk register updates Organizational process assets updates Change requests Project management plan updates Project document updates
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