1. Project Risk Management
Past, Present & Future
B. McGhee, PMP

2. Project Risk Management
Past
Why Use Project Risk Management?
What is Project Risk Management?
Present
PMBOK Approach
Current Tools & Techniques
Future
Knowledge-Based Risk Management

3. Past: Why Project Risk Management
Required for successful business activity in today’s changing environment.
Projects are launched in response to opportunities
As opportunities increase, so do the associated risks
Planning tends to focus on the past
Uncertainty rarely addressed explicitly and formally
Too many surprises

4. Past: Integrating Risk
R. Max Wideman

5. Past: Project Risk Management
Project risk Management is the art and science of identifying, assessing and responding to project risk throughout the life of a project and in the best interest of its objectives.
Project Risk is the cumulative effect of the chances of uncertain occurrences adversely affecting project objectives.
(R. Max Wideman)

6. Past: Risk has Three Components
An event (an unwanted change),
Probability of the occurrence of that event, and
Impact of that event (or amount at stake)
Uncertainty: the probability of the occurrence of an event
ESI, 1993

7. Risk Management Capability Requires
Human resources and
training
Risk
Management
Tools and
Techniques
Procedures
ESI, 1993

8. Present: PMBOK Approach
Risk Identification
Risk Quantification
Risk Response Development
Risk Response Control

9. Present: Risk Identification
Input
WBS
Contractual Requirements
Field & Marketing information
Lessons-learned files
Corporate objectives
Tools
Idea-generation tools
Interviews
Group techniques
Analogy comparisons
Surveys
Personal management tools
Communications skills
Leadership
Team-building skills
Coordination tools
ESI

10. Present: Risk Quantification
Input
WBS
Contractual Requirements
Field & Marketing information
Lessons-learned files
Corporate objectives
Rating system guidelines
Categorized list of risk
Tools
Idea-generation tools
Interviews
Group techniques
Analogy comparisons
Surveys
Decision-making tools
Decision trees
Life-cycle cost analysis
Financial measures
Probability functions
Project management tools
Milestone charts
Gantt charts
PERT
ESI

11. Sample Risk List
ESI

12. Present: Risk Response Development
Input
Project Plan
Prioritized risk list
Tools
Idea-generation tools
Interviews
Group techniques
Analogy comparisons
Surveys
Decision-making tools
Decision trees
Life-cycle cost analysis
Financial measures
Probability functions
Personal management tools
ESI

13. Sample Risk List & Mitigation Strategies
ESI

14. Present: Risk Response Control
Input
Risk management plan/project plan
Project resources
Information about risk events
Cost, schedule, and technical performance data
Tools
Risk mitigation strategies
Personal management tools
Communication
Time management
Tenacity
Leadership
Project management tools
Networks
Schedules
Cost and schedule reporting process
Team meetings
ESI

15. Present: Other Tools & Techniques
Brainstorming
Sensitivity Analysis
Probability Analysis
Delphi Method
Monte Carlo
Decision Tree Analysis
Utility Theory
Decision Theory

16. Present Problems Limited time Limited experience Limited tools
Limited resources
Inconvenient
Not Performed throughout the project

17. Future: Project Risk Management
Knowledge-based Risk Management
Based on the character of project risk, “knowledge transfer” among project managers is critical to project risk management. (K. Niwa, 1989)
Successive Principle

18. Project Risk Management: Past, Present, & Future
What’s Next?

19. Project Risk Management: Past, Present, & Future
Ben McGhee, PMP