Agenda• Interthink – 2003 Organizational Project Management Baseline Study

– Industry Profile – Country Profile– Organization Size– Data On Schedule– Data On Budget– Key Influences – Risk Management

• What is Risk?

• Tools

• PMBOK Chapter 11– 11.1 Risk Management Planning – 11.2 Risk Identification– 11.3 Qualitative Risk Analysis– 11.4 Quantitative Risk Analysis– 11.5 Risk Response Planning – 11.6 Risk Monitoring and Control

• Questions and Answers

Interthink – 2003 Organizational Project Management Baseline Study

Interthink – 2003 Organizational Project Management Baseline Study

Interthink – 2003 Organizational Project Management Baseline Study

Schedule

0

10

20

30

40

50

60

70

Late On Time (+/-10%)

1999

2000

2001

2002

2003

Budget

0

10

20

30

40

50

60

70

Over Budget On Budget

1999

2000

2001

2002

2003

As with every previous year, the correlation of risk management and overall process performance is one of the strongest ones found

Risk management continues to be a practice area that for many organizations is ignored, or is addressed only at the beginning of the project

Research has consistently demonstrated that an emphasis on risk management can have widespread and significant impacts on how projects are managed organizationally

It continues to be a leading indicator of organizational success

What Is Project Risk?

According to PMBOK Chapter 11

Project risk is an uncertain event or condition that, if it occurs, has a positive or a negative effect on at least one project objective

Software

MS Project

MS Word

MS Excel

MS Power PointMS Outlook

Pertmaster for MS Project

Good News: You have 2/3 – 5/6 of the tools you need to do risk analysis

It All Starts With A Good PlanMS Project

Project Risk Management

11.1 Risk Management Planning

11.4 Quantitative Risk Analysis

11.3 Qualitative Risk Analysis

11.2 Risk Identification

11.5 Risk Response Planning

11.6 Risk Monitoring and Control

11.1 Risk Management Planning.1 Inputs

.1 Project Charter

.2 Project Scope Statement

.3 Project Management Plan

.4 Organizational Process Assets

.5 Environmental and Organizational Factors

.1 Planning Meetings and Analysis

.3 Output.1 Risk Management Plan

.2 Tools and Techniques

Project Risk Management PlanMS Word

11.2 Risk Identification.1 Inputs

.1 Project Charter

.2 Project Scope Statement

.3 Project Management Plan

.4 Organizational Process Assets

.5 Environmental and Organizational Factors

.1 Documentation Reviews

.2 Information Gathering Techniques

.3 Risk Checklists

.4 Assumptions Analysis

.5 Diagramming Techniques

.3 Outputs.1 Risk Register.2 Project Management Plan (Update)

.2 Tools and Techniques

Risk ChecklistMS Word

11.3 Qualitative Risk Analysis.1 Inputs

.1 Project Charter

.2 Project Scope Statement

.3 Project Management Plan

.4 Organizational Process Assets

.5 Environmental and Organizational Factors

.1 Risk Probability And Impact

.2 Probability And Impact Matrix

.3 Risk Data Quality Assessment

.4 Risk Categorization

.5 Risk Urgency Assessment

.3 Outputs.1 Risk Register (Updates)

.2 Tools and Techniques

Probability and Impact MatrixMS Excel

Probability   Risk Score = Probability x Impact

0.9 0.05 0.09 0.18 0.36 0.72

0.7 0.04 0.07 0.14 0.28 0.56

0.5 0.03 0.05 0.10 0.20 0.40

0.3 0.02 0.03 0.06 0.12 0.24

0.1 0.01 0.01 0.02 0.04 0.08

  0.05 0.10 0.20 0.40 0.80

11.4 Quantitative Risk Analysis.1 Inputs

.1 Project Management Plan

.2 Risk Register

.3 Project Scope Statement

.4 Work Performance Information

.5 Organizational Process Assets

.1 Data Gathering And Representation Techniques

.2 Quantitative Risk Analysis And Modeling Techniques

.3 Outputs.1 Risk Register (Updates)

.2 Tools and Techniques

Monte Carlo SimulationPertmaster for MS Project

Cum

ulat

ive

Fre

quen

cy

Hits

0

22

44

66

88

110

Distribution (start of interval)

08/07/07 10/02/07 11/27/07 01/22/08 03/18/08 05/13/08

5% 09/26/07

10% 10/12/07

15% 10/24/07

20% 11/02/07

25% 11/12/07

30% 11/16/07

35% 11/23/07

40% 11/29/07

45% 12/05/07

50% 12/12/07

55% 12/18/07

60% 12/26/07

65% 01/01/08

70% 01/08/08

75% 01/15/08

80% 01/21/08

85% 01/30/08

90% 02/13/08

95% 03/03/08

100% 05/15/08

There is less than a 5% chance of meeting the original estimated date!

There is an 85% chance of missing the estimated date by 4 months!

Sensitivity AnalysisPertmaster for MS Project

00039 - Conduct marketing/technical review 59%

00099 - Determine if product is meeting customer cost/performance expect 35%

00090 - Start production of commercial product quantities 28%

00071 - Complete customer trial monitoring 24%

00091 - Monitor customer acceptance testing 24%

00102 - Evaluate manufacturing process for stability and cost effectiven 21%

00086 - Design and order new equipment 20%

00048 - Prepare preliminary manufacturing design 16%

00087 - Install and test new equipment or equipment modifications 16%

00041 - Modify prototype process 13%

00075 - Re-evaluate manufacturing processes 13%

00068 - Monitor customer trials 12%

00021 - Perform financial evaluation 12%

00040 - Redesign process (if necessary) 11%

00045 - Conduct customer evaluations of prototype product 10%

11.5 Risk Response And Planning.1 Inputs

.1 Project Management Plan

.2 Risk Register

.1 Documentation Reviews

.2 Information Gathering Techniques

.3 Risk Checklists

.4 Assumptions Analysis

.5 Diagramming Techniques

.3 Outputs.1 Risk Register.2 Project Management Plan (Update)

.2 Tools and Techniques

Project Management Plan (Update)MS Project

We may want to put a few more developers on this one!

11.6 Risk Monitoring And Control.1 Inputs

.1 Project Management Plan

.2 Work Performance Information

.3 Approved Changed Requests

.1 Risk Reassessment

.2 Risk Audits And Periodic Risk Reviews

.3 Variance And Trend Analysis

.4 Technical Performance Measurement

.5 Reserve Measurement

.3 Outputs.1 Recommended Corrective Action.2 Requested Changes.3 Risk Register (Updates).4 Organizational Process Assets (Updates)

.2 Tools and Techniques

Risk Reassessment Pertmaster for MS Project

Cum

ulat

ive

Fre

quen

cy

Hits

0

21

42

63

84

105

Distribution (start of interval)

05/23/07 06/22/07 07/22/07 08/21/07 09/20/07 10/20/07

5% 06/26/07

10% 07/06/07

15% 07/12/07

20% 07/18/07

25% 07/23/07

30% 07/26/07

35% 07/31/07

40% 08/02/07

45% 08/07/07

50% 08/09/07

55% 08/14/07

60% 08/17/07

65% 08/21/07

70% 08/24/07

75% 08/29/07

80% 09/04/07

85% 09/10/07

90% 09/14/07

95% 09/25/07

100% 10/24/07There is now an 85% chance of finishing the project 2 weeks early!

There is now a 95% chance of meeting the original estimated date!