Lecture 4: Risk Management PDF

Preview

Summary

Lecture 4 Notes...

Description

Lecture Four: Risk Management OPMT 1176 - Project Management 27 January 2020 / SE6 233

Cost Management Review Plan Cost Management → Estimate Costs → Determine Budget → Control Costs ● Determine project cost ● Add contingency for known/unknowns ● Add reserve for unknown/unknowns Lottery analogy: ● Calculate the odds of winning (probability) ● Affect it would have on your life (impact)

Risk Definition Risk An event that, should it occur will have a positive or negative impact on the project outcomes (risk itself isn’t positive/negative, it’s the impact) ● Not PMBOK definition Projects are risky ● Unique undertakings ● Varying degrees of complexity ● Constraints and assumptions ● Responding to conflicting or changing stakeholder expectations

Risk Management Process Identify risks → perform qualitative risk analysis → perform quantitative risk analysis → plan risk responses → implement and monitor Risk management attempts to identify and prioritize risks so the risks can be managed ● Risks not addressed by other knowledge areas ● Directly related to project success Risk Identification ● Expert judgement ● Data gathering (brainstorming, etc.) ● Data analysis (root cause assumptions and constraints info, SWOT) ● Interpersonal and team skills - facilitator ● Prompt lists - categories ● Meetings - workshops

Qualitative Analysis ● Risk probability and impact assessment ● Probability and impact matrix ● Prioritization Quantitative Analysis ● Numerically analyzing the effect of identified risks on project objectives ● Quantifies overall risk exposure ● Not required for all projects ○ Availability of data ○ Solid project baseline ○ Usually requires specialized software ● Focus on high priority risks

Plan Risk Responses ● Negative ○ Avoid → change plan, adopt known methodologies vs. unknown ○ Transfer → insurance policies, equipment warranties ○ Mitigate → action taken to minimize probability or reduce impact ● Positive ○ Exploit → remove uncertainty, make opportunities happen ○ Share → assign ownership to 3rd parties; seize opportunity and benefit ○ Enhance → increasing probabilities or impacts ● Accept the risk ○ Passive → do nothing; leave team to deal with consequences ○ Active → time, money or resource reserve to deal with risk consequences Risk Register

Monitor and Control ● Continuously monitor and control ● Track and update changes to risk ● Identify and analyze new risks ● Remove expired risks ● Evaluate risk process effectiveness (audit)...