1. Risk planning & risk management (RM)
Acknowledgements to Euan Wilson (Staffordshire University)

2. all projects involve risk risks stem from work nature
Project risk
all projects involve risk
risks stem from work nature
not practical to eliminate risk
not desirable to eliminate risk
acknowledge risk existence
methods to handle risk

3. increasingly important
Risk management
increasingly important
greater complexity levels
vastly varying skill & technology
interdependency
higher level of project uncertainty

4. strategic Risks to projects abandonment massive over-run/over-spend
loss of client confidence
loss of future business

5. operational Risks to projects constant change/re-planning inefficiency
over-run/over-spend
low morale
unacceptable work conditions

6. Risk management process
risk planning
risk
plan
risk
identification
risk analysis
risk database
risk response
risk action
project plan

7. part of ‘project office’
Risk management
part of ‘project office’
wider than ‘project team’
standard procedure for all projects
applied to all projects
maintain risk ‘database’
‘feed forward’ information (past tasks)
compile actual vs. forecast information (new tasks)

8. link(s) to quality/monitoring
Risk management
link(s) to quality/monitoring
milestones/inspections
feedback to project plan

9. adopt risk management approach/policy
Risk planning
small projects
project manager responsibility
large projects
full time risk manager
adopt risk management approach/policy
contingency plan
identify risk factor identification mechanisms

10. difficult to ensure full risk identification second/third opinions
easier said than done
difficult to ensure full risk identification
second/third opinions
manager must be honest re: risks
must highlight all risks regardless of repercussions

11. how to identify & specify risk
Identifying risks
how to identify & specify risk
must be defined precisely
must be capable of measurement
must have measurable impact

12. Specifying risk example
poor contract staff performance may not be as productive as estimated may not conform to in-house standards

13. Identification of risk
starting point for identification
contract & project plan
customer
users
acceptance criteria & mechanisms
functional requirement

14. Identification of risk
technical requirement
performance, reliability, availability & maintainability
developer skill
development environment
tools, methods, hardware & software
all tasks on critical or near-critical paths

15. Risk assessment/analysis
impact & likelihood assessment
focus attention
higher occurrence probability
higher impact effect
related to time/quality/cost criteria

16. risk occurrence probability
Assessment scheme
risk occurrence probability
high >30%
medium 10%-30%
low <10%
project impact (overspend/over-run)
high >30% or abandon
medium 10%-30%

17. Risk Assessment Map Likelihood of occurrence High Medium Low Large
Probable
scale of
impact
Moderate
Small

18. risk urgency Assessment scheme how soon risk may occur
how soon avoidance measures need to be in place

19. Risk ownership/response
identify ‘owner’ of risk
balance required
involvement & authority
requires
sufficient task knowledge/expertise
necessary resources/time to monitor risk
sufficient authority to achieve risk action

20. three types Risk actions avoidance actions
prevention of risk occurrence
no contract staff
experienced project team members
potentially expensive

21. mitigation/reduction actions
Risk actions
mitigation/reduction actions
reduce potential risk occurrence
assess contract staff ability
assess attitudes to standards
reduce risk impact
acceptance actions
possible for low probability risks
accept small impact risks

22. creation of secondary risks
Risk action problem
creation of secondary risks
e.g. no contract staff = not enough project team members

23. Risk register (risk database)
various forms
paper based register
word processing file
database
storage form dependant on
project scale
risk volatility
central repository for risk information

24. reference title/description current status of risk Risk database
unique identifier
WBS by reference
title/description
of task
current status of risk
risk ‘live’

25. potential impact(s) risk owner Risk database
quantifiable terms (time/cost/quality)
multiple impacts
record description/likelihood/scale
risk owner
tracks risk
responsible for implementing risk actions

26. risk actions action log Risk database
avoidance/mitigation/acceptance plan
action log
record of action taken

27. statement of scope & degree of risk management
Risk plan
statement of scope & degree of risk management
description of risk management process
assessment method
when & how monitoring
roles & responsibilities
who responsible for RM process
reporting structure
description of RM deliverables