2. Developing and Understanding Our Future Workforce MODULE 3 RISK MANAGEMENT TST Consulting and Training

3. 3 Risk management The chance of an uncertainty happening that will have an impact on objectives. It is measured in terms of a combination of the likelihood of a risk event and its consequences. (Standards Australia's AS/NZS 4360:2004 Risk management and HB436:2004 Risk management guidelines (August 2004) available from http://www.standards.org.au/ )http://www.standards.org.au/

4. 4 Risk audit/assessment A systematic approach for describing and/or calculating risk. Risk analysis involves the identification of undesired events, and the causes and consequences of these events. (http://www.nr.no/~abie/RiskAnalysis.htm)http://www.nr.no/~abie/RiskAnalysis.htm

5. 5 Potential benefits of risk management (sourced November 2004, from http://www.hefce.ac.uk/pubs/hefce/2001/01_24.htm)http://www.hefce.ac.uk/pubs/hefce/2001/01_24.htm

6. 6 Risk exposure matrix

7. 7 Where does risk come from ? 1.External changes 2.Unexpected, abnormal social or environmental events (i.e. Nuclear attack, terrorists, natural disasters, etc.) 3.Risk issues we initiate 4.External changes (i.e. decrease in labour market, rise in the dollar, etc.)

8. 8 Risk management process 1.Establish the context. 2.Identify and define risks. 3.Conduct risk analysis. 4.Conduct risk evaluation. 5.Develop and implement risk treatments. 6.Monitor, report, update and manage risks. (Source: OCIT, 2004, http://www.oit.nsw.gov.au/Guidelines/4.3.24.d-Project-RM.asp#a70)http://www.oit.nsw.gov.au/Guidelines/4.3.24.d-Project-RM.asp#a70

9. 9 Levels of uncertainty Level 1 – Identified and known consequences Level 2 – Identified but unknown consequences Level 3 – Identified and range of unknown possibilities Level 4 – Unknown and complete ambiguity

10. 10 Cost of managing risks Effective risk management has costs. However, one recent study indicated that effective risk management could provide up to a 20:1 return on investment. It is an overhead to prevent loss. (Source: http://www.oit.nsw.gov.au/Guidelines/4.3.24.a-Project-RM.asp)http://www.oit.nsw.gov.au/Guidelines/4.3.24.a-Project-RM.asp

11. 11 Cascading affect of managing/ not managing risks Source: http://www.oit.nsw.gov.au/Guidelines/4.3.24.b-Project-RM.asp#a30http://www.oit.nsw.gov.au/Guidelines/4.3.24.b-Project-RM.asp#a30

12. 12 Effective management requires Commitment at all levels. Communication and consultation. Effective system engineering and project management. Risk ownership. A continuous approach. A partnership approach. An appropriate risk management process.