Manage Risks in projects

7/27/2019 Manage Risks in projects

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A special lecture for BusinessLeadersPresented by:

Masilamani Ramasamy


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is important for success

especially in projects

need to have a process/s five steps project

manager/s can use


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Risk management processes are cyclic start from identification of a risk, and may result in identification of another

new risk

each individual has different opinions &ways to deal with risks, SO risk should be consistent to meetproject objectives

documented in a risk managementplan


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The Process


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Identify risks that affect theproject

positively or negatively, anddocument their characteristics

Do this as thoroughly as youcan


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Identify Risks Mind Map


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Assess the risk impact Analyze the probability of riskoccurrence, and

prioritize the risks numerically analyze the effect ofidentified risks on project

objectives usually on cost, schedule and scopetargets


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SCALE PROBABILITY +/- IMPACT ON PROJECT OBJECTIVESTIME COST QUALITY

VHI > 90% 20DAYS

>200K Very significant impact onoverall functionality

HI 71 90% 11 2

0DAYS

101 200K Significant impact on

overall functionality

MED 51 70% 4 10DAYS

51 100K Some impact in keyfunctional areas

LO 31 50% 1 3

DAYS

10 50K Minor impact on overall

functionality

VLO 11 30% < 1 DAY


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Perform Quantitative Risk Analysis Mind Map


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Explore all the possible ways to reduce the impact of threats , and/or exploit opportunities

Plan actions to eliminate the risks and/or enhance the opportunities

Action plans should be appropriate, cost effective, and

realistic


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: PLAN ACTIONS-Standard Risk Breakdown Structure (RBS)RBS LEVEL 0 RBS LEVEL 1 RBS LEVEL 2

RBSLEVEL 0

RBS LEVEL 1 RBS LEVEL 2 RBS LEVEL 2

0. PROJECT RISK

1. TECHNICAL RISK1.1 Scope definition1.2 Requirements definition1.3 Estimates, assumptions & constraints1.4 Technical processes1.5 Technology1.6 Technical interfaces

1.7 Design1.8 Performance1.9 Reliability & maintainability1.10 Safety1.11 Security1.12 Test & acceptance

2. MANAGEMENT RISK 2.1 Project management2.2 Programme/portfolio management2.3 Operations management2.4 Organisation2.5 Resourcing2.6 Communication2.7 Information

2.8 HS&E

2.9 QuaLITY2.10 Reputation

3. COMMERCIAL RISK 3.1 Contractual terms & conditions3.2 Internal procurement3.3 Suppliers & vendors3.4 Subcontracts

3.5 Client/customer stability3.6 Partnerships & joint ventures

4. EXTERNAL RISK 4.1 Legislation4.2 Exchange rates4.3 Site/facilities4.4 Environmental/weather4.5 Competition

4.6 Regulatory

4.7 Political4.8 Country4.9 Social/demographic4.10 Pressure groups4. EXTERNAL RISK

4.11 Force majeure


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Plan Risk Management Mind Map


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Track the risks throughout the project If risks occur then,

implement the risk strategy based on

action plan Risk strategies may include

Mitigation

Acceptance Avoidance, and

Exploitation


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This is no problem You can perform a risk assessment on the

project and begin to apply project riskmanagement at any time

The risk assessment should find some of themajor things which are about to go wrong,and identify potential failures as the project

continues


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AvoidThe best thing that you can do

with a risk is avoid itif you can

prevent it from happening, it

Definitely wont hurt your project.

The easiest way to avoid this riskis to walk away

from the cliff but that may notbe an option on this project.


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TransferOne effective wayto deal with a risk

is to pay someoneelse to accept itfor you. The most

common way todo this is to buyinsurance.


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MitigateIf you cant avoid the

risk, you can mitigateit.This means takingsome Risk Response

Strategies


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If you cant avoid the risk,and theres nothing you can

do to reduce its impact,then accepting it is youronly choice

AcceptWhen you cant avoid, mitigate,or transfer a risk, then you haveto accept it. But even when youaccept a risk, at least youvelooked at the alternatives and

you know what will happen if itoccurs.


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Plan Risk Responses Mind Map


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Measure the effectiveness of theplanned action and

controlling the risk impact by understanding risk triggers

& timely implementation of

planned actions


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RiskCategory Risk Name RiskNumberProbability (1-3)

Impact(1-3)RiskScore(1-5) Mitigation Contingency Action By

ActionWhen

GuestsThe guestsfind thepartyboring

1.1. 2 2 4 Invite crazyfriends, providesufficient liquor

Bring out thekaraoke

Ahmadwithin2hrs

GuestsDrunkenbrawl

1.2. 1 3 3Dont invitecrazy friends,don't provide

too much liquor

Call 911 Samy Now

Nature Rain 2.1. 2 2 4 Have the partyindoors

Move theparty indoors

Milind 10mins

Nature

Earthquake

or fire 2.2. 1 3 3Start the partywith instructions

on what to do inthe event of fireor earthquake

Implementtheappropriate

naturaldisasterresponseplan

Everyone

As per

plan

FoodNotenoughfood

3.1. 1 2 2 Have a buffet Order pizza Zainal 30minsFood Food is

spoiled3.2. 1 3 3 Store the food in

deep freezerOrder pizza Susi 30mins
http://en.wikipedia.org/wiki/Karaokehttp://en.wikipedia.org/wiki/Karaoke


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Monitor & Control Risks Mind Map


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Documents

Manage Risks in projects