Project Risk Management

SZABIST MPM II A

Teaching Pattern:

No Course BOOK Course Material Regular in Class, Assignments & Slides Each Class we have 2 Quizzes (Only one is marked)

Anytime between the class.

Class participation Bonus Marks Mid Term Exam * Project & Presentation

Field Based Research Based

All Slides & Assignments are available on e-Group

Need Your Participation Productive

Introduction Your Name & Select Object that reflects your personality.

2 Min

What is Risk?

What is Risk?

A probability or threat of damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action.
Services/ goods not provided within budget Political change Change in interest rates Loss of customer loyalty/ revenue Fraud Project budget over-runs Terrorist attack/ Bomb threat etc.

What is Project Risk?

A risk is something that may happen and if it does, will have a positive or negative impact on the project. A risk must also have a probability something above 0%. It must be a chance to happen or it is not a risk.
Being late Over Budget Communication Breakdown Employee turnover Not Knowing What's Going On Un-productivity User Commitment

Difference b/w RISK & ISSUE

Risk is an event of future, if it occurs, may impact project objectives in positive or negative manner. The key point is that the risk event has not happened yet. An issue is a result of an event that is happening right now or has already happened. The key point is that issue event has already happened. Risk is a future event that may have an impact on triple constraint (Budget, scope and schedule). A risk can become an issue, but issue is not risk - it has already happened.

RISK, Project RISK or ISSUE ???

We may not be able to complete the project on time if the server we need does not arrive on time. The system we are building is designed for 1000 concurrent users, but if we get more than that it might run slow or even crash. Not recruiting a senior consultant for the project by the second week could delay the project by a month. If a staff member leaves the project, we have to act now to replace her.

RISK, Project RISK or ISSUE ???

We may not be able to complete the project on time if the server we need does not arrive on time. Project Risk The system we are building is designed for 1000 concurrent users, but if we get more than that it might run slow or even crash. RISK Non-Project Risk Not recruiting a senior consultant for the project by the second week could delay the project by a month. Project Risk If a staff member leaves the project, we have to act now to replace her. Issue

What Is Risk Management?

Risk Management is the process of identifying, analyzing and responding to risk factors throughout the life of a project and in the best interests of its objectives.

Proper risk management implies control of possible future events and is proactive rather than reactive.

What Is Risk Management?

Risk Management is the process of identifying, analyzing and responding to risk factors throughout the life of a project and in the best interests of its objectives.

Proper risk management implies control of possible future events and is proactive rather than reactive.
Case: An activity in a network requires that a new technology be developed. The schedule indicates six months for this activity, but the technical employees think that nine months is closer to the truth. What you do?

Case Study: Risk Management

An activity in a network requires that a new technology be developed. The schedule indicates six months for this activity, but the technical employees think that nine months is closer to the truth. If the project manager is proactive, the project team will develop a contingency plan right now. They will develop solutions to the problem of time before the project due date. However, if the project manager is reactive, then the team will do nothing until the problem actually occurs. The project will approach its six month deadline, many tasks will still be uncompleted and the project manager will react rapidly to the crisis, causing the team to lose valuable time.

Why do Risk Management?

The purpose of risk management is to:

Identify possible risks. Reduce or allocate risks. Provide a rational basis for better decision making in regards to all risks. Plan

Ensure that high priority risks are aggressively managed and that all risks are cost-effectively managed throughout the project. Provide management at all levels with the information required to make informed decisions on issues critical to project success. If you don't actively attack risks, they will actively attack you!!

Risk Classification

Grouping of different risks according to their estimated cost or likely impact, likelihood of occurrence, countermeasures required, etc. Risks are normally classified:

Time (schedule) Cost (budget) Scope

E:g; Credit risk, is classified according to the likelihood of the collection of accounts receivable. Technological risks, is classified according to the likelihood of the technology.

Benefits of Risk Management

Risk management provides a clear and structured approach to identifying risks. Having a clear understanding of all risks allows an organization to measure and prioritize them. Take the appropriate actions to reduce losses. Other benefits for an organization:

Saving resources Protecting the reputation and public image of the organization Preventing or reducing legal liability and increasing the stability of operations. Protecting people from harm. Protecting the environment. Enhancing the ability to prepare for various circumstances. Reducing liabilities.

Case Study: Positive Risk!

You have a software development project that is scheduled to take 90 days to complete. Your business client would rather the project be delivered earlier, and would get more value if it were delivered earlier.

Positive Risk: One of your team members has an idea: If you utilize a new software-testing tool, its possible that you can deliver the project in 60 days instead of 90. If this were a guaranteed solution, you would jump on it.

Case Study: Negative Risk!

Negative Risk:

There is negative risk:

It will be the first time youve used the tool. You have to deal with a lack of expertise and a learning curve. Its possible that if the tool doesnt work out, the project could end up taking 110 days to deliver.

Your Decision???

Conclusion:

What is Risk? What is Project Risk? Difference b/w Risk & Issues? How we identify?Is it Project Risk, Risk or Issue!! Nature of Risk ManagementProactive-Reactive Why do Risk Management? Risk Classification Benefits of Risk Management Positive & Negative Risk Class Assignment ???

Class Assignment

Question No.1:

List down 12 Risks 8 Becomes Project Risk 5 Becomes Issues

Questions No. II:

Make a Case Study: Positive Risk Negative Risk