1. RISK MANAGEMENT IN IMPLEMENTATION OF ARMED FORCES MODERNIZATION PROJECTS Colonel Engr. Nikolay YANKOV Director, Armaments and Equipment Policy Directorate, Ministry of Defence FROM RISK TO RECOVERY – IDENTIFYING AND CONTROLLING BUSINESS RISKS EFFECTIVELY SOFIA, 18-20 OCTOBER 2006

2. 1. PROJECT RISK MANAGEMENT AS A POLICY TOOL OF THE MINISTRY OF DEFENCE 2. CONTENTS AND PECULIARITIES OF THE RISK MANAGEMENT PROCESS IN IMPLEMENTATION OF ARMED FORCES MODERNIZATION PROJECTS 3. DEVELOPMENT PROSPECTS OF THE PROJECT RISK MANAGEMENT POLICIES AND PRACTICES AT THE MINISTRY OF DEFENCE 4. CONCLUSIONS CONTENTS:

3. PROJECT RISK MANAGEMENT AS POLICY TOOL OF THE MINISTRY OF DEFENCE CHARACTERISTICS OF PROJECT RISK MANAGEMENT POLICY: 1. Substantial and significant governance activity of the Ministry of Defence, exerting influence on the rest of the organization activities and assisting leadership in making rational decisions in the field of acquisition 2. Process of organized and systematized assessment of and response to the risk associated with modernization projects 3. Achieving a balance between the scope and quality of acquisition projects and the planned required defence capabilities of the armed forces 4. Achieving sufficient conviction for the leadership of the Ministry of Defence regarding the feasibility of the time and resource parameters of modernization projects

4. PROCESS OF TRANSFORMATION OF PROJECT RISK INTO PROBLEM RISK REDUCTION MEASURES RISK AREAS RISK AREAS RISK AREAS RISK AREAS PROJECT OBJECTIVE INFLUENCE IMPACTS PROBLEM RISK EVENT CAUSES

5. CONTENT OF THE RISK MANAGEMENT PROCESS IN IMPLEMENTATION OF ARMED FORCES MODERNIZATION PROJECTS PROJECT RISK MANAGEMENT PROCESS POLICY FORMULATION AND DETERMINATION OF COMMITMENTS PROJECT RISK RESPONSE PROJECT RISK ANALYSIS SETTING UP OF MANAGEMENT TEAM MONITORING, DOCUMENTING AND REPORTING OF RESULTS PROJECT RISK IDENTIFICATION I N F O R M A T I O N P R O C E S S M O N I T O R I N G A N D C O N T R O L O F R I S K M A N A G E M E N T P R O C E S S

6. DEVELOPMENT PROSPECTS OF PROJECT RISK MANAGEMENT POLICIES AND PRACTICES AT THE MINISTRY OF DEFENCE TOP PRIORITIES FOR DEVELOPMENT: 1. Define sufficiently precise criteria to determine the maximum permissible level of risk for the Ministry of Defence in implementation of armed forces modernization projects 2. Build and develop a quntitatively and qualitatively sufficient expert capacity at the Ministry of Defence to perform the required expert examinations in project risk management 3. Develop effective and productive procedures for implementation of the project risk management process within the framework of the Force Management System

7. CONCLUSIONS: 1. The Ministry of Defence has set the beginning of application of project risk management as a policy tool, and the results provide a point of departure for further development and improvement of activity in this area. 2. There is a clear idea of the existing problems and the possible approaches to their addressing so as to maximize the advantages of project risk management in attaining the objectives of defence acquisition in particular and of defence policy at large.