Upload
rea
View
81
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Project Management and Quality Control Fall 2014. Risk Management. Lecture 06. Mohammad Fayez Al Bataineh. Risk Management What’s a risk?. Lecture 06. Mohammad Al Bataineh . What’s a Risk?. - PowerPoint PPT Presentation
Citation preview
Yarmouk University Hijjawi Faculty For Engineering
Tech
Project Management and Quality Control
Fall 20141
RISK MANAGEMENT
Lecture 06 Mohammad Fayez Al Bataineh
Risk ManagementWhat’s a risk?
2Mohammad Al Bataineh Lecture 06
What’s a Risk?• There are no guarantees on any project!
Even the simplest activity can run into unexpected problems.
• Any time there’s anything that might occur on your project and change the outcome of a project activity, we call that a risk.
• A risk is any uncertain event (like a fire), or condition (like an important part being unavailable) that might affect your project.
• Either way, it’s something that may or may not happen... but if it does, then it will force you to change the way you and your team will work on the project.
3Mohammad Al Bataineh Lecture 06
Risk ManagementWhat’s a risk?
4Mohammad Al Bataineh Lecture 06
How You Deal With Risk• When you’re planning your project, risks
are still uncertain: they haven’t happened yet. But eventually, some of the risks that you plan for do happen. And that’s when you have to deal with them.
• There are four basic ways to handle a risk:1) Avoid2) Mitigate3) Transfer4) Accept
5Mohammad Al Bataineh Lecture 06
Avoid
6Mohammad Al Bataineh Lecture 06
Mitigate
7Mohammad Al Bataineh Lecture 06
Transfer
8Mohammad Al Bataineh Lecture 06
Accept
9Mohammad Al Bataineh Lecture 06
10
The Risk Management Plan
• It tells you how you’re going to handle risk on your project.
• It says:– how you’ll assess risk on the
project, – who’s responsible for doing it,
and – how often you’ll do risk
planning (since you’ll have to meet about risk planning with your team throughout the project).
Mohammad Al Bataineh Lecture 06
The Risk Management Plan
11Mohammad Al Bataineh Lecture 06
Use a Risk Breakdown Structure to Categorize
Risks
12Mohammad Al Bataineh
In RBS, you come up with
major risk categories, and then
decompose them into
more detailed ones.
Lecture 06
Exercise• Take a look at how each of these project risks
handled and figure out if the risk is being avoided, mitigated, transferred, or accepted.
1) Stormy weather and high winds could cause very slippery conditions, so you put up a tent and wear slip-resistant footwear to keep from losing your footing.
2) You buy a surge (impulse) protector to make sure a lightning strike won’t blow out all of your equipment.
13Lecture 06
Exercise• Take a look at how each of these project risks
handled and figure out if the risk is being avoided, mitigated, transferred, or accepted.
1) Stormy weather and high winds could cause very slippery conditions, so you put up a tent and wear slip-resistant footwear to keep from losing your footing.
2) You buy a surge (impulse) protector to make sure a lightning strike won’t blow out all of your equipment.
14Lecture 06
Exercise• Take a look at how each of these project risks
handled and figure out if the risk is being avoided, mitigated, transferred, or accepted.
1) Stormy weather and high winds could cause very slippery conditions, so you put up a tent and wear slip-resistant footwear to keep from losing your footing.
2) You buy a surge (impulse) protector to make sure a lightning strike won’t blow out all of your equipment.
15Lecture 06
Exercise• Take a look at how each of these project risks
handled and figure out if the risk is being avoided, mitigated, transferred, or accepted.
1) Stormy weather and high winds could cause very slippery conditions, so you put up a tent and wear slip-resistant footwear to keep from losing your footing.
2) You buy a surge (impulse) protector to make sure a lightning strike won’t blow out all of your equipment.
16Lecture 06
Exercise3) Flooding could cause serious damage to
your equipment, so you buy an insurance policy that covers flood damage.
4) The manufacturer issues a warning that the safety equipment you are using has a small but nonzero probability of failure under the conditions that you’ll be facing. You replace it with more appropriate equipment.
17Lecture 06
Exercise3) Flooding could cause serious damage to
your equipment, so you buy an insurance policy that covers flood damage.
4) The manufacturer issues a warning that the safety equipment you are using has a small but nonzero probability of failure under the conditions that you’ll be facing. You replace it with more appropriate equipment.
18Lecture 06
Exercise3) Flooding could cause serious damage to
your equipment, so you buy an insurance policy that covers flood damage.
4) The manufacturer issues a warning that the safety equipment you are using has a small but nonzero probability of failure under the conditions that you’ll be facing. You replace it with more appropriate equipment.
19Lecture 06
Exercise3) Flooding could cause serious damage to
your equipment, so you buy an insurance policy that covers flood damage.
4) The manufacturer issues a warning that the safety equipment you are using has a small but nonzero probability of failure under the conditions that you’ll be facing. You replace it with more appropriate equipment.
20Lecture 06
Exercise5) A mud slide would be very damaging to your
project, but there’s nothing you can do about it.
6) A team member discovers that the location you planned on using is in a county that is considering regulations that could be expensive to comply with. You work with a surveying team to find a new location.
21Lecture 06
Exercise5) A mud slide would be very damaging to your
project, but there’s nothing you can do about it.
6) A team member discovers that the location you planned on using is in a county that is considering regulations that could be expensive to comply with. You work with a surveying team to find a new location.
22Lecture 06
Exercise5) A mud slide would be very damaging to your
project, but there’s nothing you can do about it.
6) A team member discovers that the location you planned on using is in a county that is considering regulations that could be expensive to comply with. You work with a surveying team to find a new location.
23Lecture 06
Exercise5) A mud slide would be very damaging to your
project, but there’s nothing you can do about it.
6) A team member discovers that the location you planned on using is in a county that is considering regulations that could be expensive to comply with. You work with a surveying team to find a new location.
24Lecture 06
Exercise7) Surrounding geological features could
interfere with your communications equipment, so you bring a flare gun and rescue beacon (منارة) in case it fails.
25Lecture 06
Exercise7) Surrounding geological features could
interfere with your communications equipment, so you bring a flare gun and rescue beacon (منارة) in case it fails.
26Lecture 06
Anatomy of a Risk• Once you’re done with Plan Risk
Management, there are four more risk management processes that – will help you and your team come up
with the list of risks for your project, – analyze how they could affect your
project, and – plan how you and your team will
respond if any of the risks materialize when you’re executing the project.
27
Risk Management Processes
28Mohammad Al Bataineh
1 2
Lecture 06
Risk Management Processes
29Mohammad Al Bataineh
3
4Lecture 06
30
The Risk Register
Mohammad Al Bataineh Lecture 06
Identify Risks: Information-Gathering Techniques
31Mohammad Al Bataineh
1
2Lecture 06
Identify Risks: Information-Gathering Techniques
32Mohammad Al Bataineh
3
4Lecture 06
Identify Risks: More Identify Risks techniques
33Mohammad Al Bataineh
65
Lecture 06
Identify Risks: More Identify Risks techniques
34Mohammad Al Bataineh
87
Lecture 06
Exercise
35Mohammad Al Bataineh
Read each of these scenarios and identify which tool or technique is being used. If a scenario uses an information-gathering technique, specify which one.
Your project requires that you set up a campsite on the edge of a cliff. You gather your team members, including a geologist, a meteorologist, a tracker, and three campsite workers, and lead them in a directed discussion where they identify as many risks as possible.
1
Lecture 06
Exercise
36Mohammad Al Bataineh
Read each of these scenarios and identify which tool or technique is being used. If a scenario uses an information-gathering technique, specify which one.
Brainstorming
Your project requires that you set up a campsite on the edge of a cliff. You gather your team members, including a geologist, a meteorologist, a tracker, and three campsite workers, and lead them in a directed discussion where they identify as many risks as possible.
1
Lecture 06
Exercise
37Mohammad Al Bataineh
You’ve sent a questionnaire to a park ranger and engineers at tent and hiking equipment companies to gather their opinions on the risk of falling off of a cliff. You remove their names from their responses, copy them, and send them back to everyone to get their feedback.
2
You meet individually with many different people: the sponsor, stakeholders, team members, and experts. You ask each of them detailed questions about what they think could go wrong on the project.
3
Lecture 06
Exercise
38Mohammad Al Bataineh
Delphi technique
You’ve sent a questionnaire to a park ranger and engineers at tent and hiking equipment companies to gather their opinions on the risk of falling off of a cliff. You remove their names from their responses, copy them, and send them back to everyone to get their feedback.
2
You meet individually with many different people: the sponsor, stakeholders, team members, and experts. You ask each of them detailed questions about what they think could go wrong on the project.
3
Lecture 06
Exercise
39Mohammad Al Bataineh
Delphi technique
You’ve sent a questionnaire to a park ranger and engineers at tent and hiking equipment companies to gather their opinions on the risk of falling off of a cliff. You remove their names from their responses, copy them, and send them back to everyone to get their feedback.
2
Interviews
You meet individually with many different people: the sponsor, stakeholders, team members, and experts. You ask each of them detailed questions about what they think could go wrong on the project.
3
Lecture 06
Where to look for risks
40Mohammad Al Bataineh
Here are a few things to keep in mind when you’re looking for risks
1
Lecture 06
Where to look for risks
41Mohammad Al Bataineh
2
Lecture 06
Where to look for risks
42Mohammad Al Bataineh
3
Lecture 06
Where to look for risks
43Mohammad Al Bataineh
4
Lecture 06
Now put it in the risk register
44Mohammad Al Bataineh
• The point of the Identify Risks process is to… well, identify risks. But what does that really give you?
• You need to know enough about each risk to analyze it and make good decisions about how to handle it.
• So when you’re – doing interviews, – leading brainstorming sessions, – analyzing assumptions, – gathering expert opinions with the Delphi
technique, and – using the other Identify Risks tools and techniques, – you’re gathering exactly the things you need
to add to the risk register.Lecture 06
Now put it in the risk register
45Mohammad Al Bataineh Lecture 06
Qualitative Risk Analysis
46Mohammad Al Bataineh
• It’s not enough to know that risks are out there. You can identify risks all day long, and there’s really no limit to the number of risks you can think of.
• Some risks are likely to occur, while others are very improbable. It’s the ones that have much better odds of happening that you really want to plan for.
• Some risks will cause a whole lot of damage to your project if they happen, while others will barely make a scratch… and you care much more about the risks that will have a big impact.
• That’s why you need the next risk management process, Perform Qualitative Risk Analysis—so you can look at each risk and figure out how likely it is and how big its impact will be.
Lecture 06
Qualitative Risk Analysis
47Mohammad Al Bataineh Lecture 06
Qualitative Risk Analysis
48Mohammad Al Bataineh
• Not all risks are created equal. Some of them are really likely to happen, while others are almost impossible. One risk will cause a catastrophe on your project if it happens; another will just waste a few minutes of someone’s time. 1
2Lecture 06
Qualitative Risk Analysis
49Mohammad Al Bataineh
3
4
Lecture 06
Qualitative Risk Analysis
50Mohammad Al Bataineh
5
Lecture 06
Qualitative Risk Analysis
51Mohammad Al Bataineh
6
Lecture 06
Qualitative Risk Analysis
52Mohammad Al Bataineh Lecture 06
Exercise
53Mohammad Al Bataineh Lecture 06
Risk categories: natural, equipment, and human.
Any equipment risks are considered high urgency. Natural and human risks are all medium urgency. Risks that have to do with storms are considered low urgency because of limited mitigation potential.
Exercise
54Mohammad Al Bataineh Lecture 06
Risk categories: natural, equipment, and human.
Any equipment risks are considered high urgency. Natural and human risks are all medium urgency. Risks that have to do with storms are considered low urgency because of limited mitigation potential.
Exercise
55Mohammad Al Bataineh Lecture 06
Risk categories: natural, equipment, and human.
Any equipment risks are considered high urgency. Natural and human risks are all medium urgency. Risks that have to do with storms are considered low urgency because of limited mitigation potential.
Exercise
56Mohammad Al Bataineh Lecture 06
Risk categories: natural, equipment, and human.
Any equipment risks are considered high urgency. Natural and human risks are all medium urgency. Risks that have to do with storms are considered low urgency because of limited mitigation potential.
Qualitative vs. Quantitative Analysis
57Mohammad Al Bataineh Lecture 06
Let’s say you’re a fitness trainer, and your specialty is helping millionaires get ready for major endurance trials. You get paid the same for each job, but the catch is that you only get paid if they succeed. Which of these clients would you take on?
Quantitative Risk Analysis Tools
58Mohammad Al Bataineh Lecture 06
Quantitative tools are broken down into three categories:
1) the ones that help you get more information about risks,
2) the ones that help you to analyze the information you have,
3) and expert judgment to help you put it all together.
The tools for gathering data focus on gathering numbers
about the risks you have already identified and ranked.
Quantitative Risk Analysis Tools
59Mohammad Al Bataineh Lecture 06
1
2
Quantitative Risk Analysis Tools
(First gather the data…)
60Mohammad Al Bataineh Lecture 06
3
Quantitative Risk Analysis Tools
(… then analyze it)
61Mohammad Al Bataineh Lecture 06
Now that you have all the data you can get about your risk register, it’s time to analyze that information. Most of the tools for analyzing risk data are about figuring out how much the risk will end up costing you. Sensitivity analysis is all about
looking at the effect one variable might have if you could completely isolate it. You might look at the cost of a windstorm on human safety, equipment loss, and tent stability without taking into account other issues that might accompany the windstorm (like rain damage or possible debris from nearby campsites). People generally use tornado diagrams to look at a project’s sensitivity to just one risk factor.
1
Quantitative Risk Analysis Tools
(… then analyze it)
62Mohammad Al Bataineh Lecture 06
2
Quantitative Risk Analysis Tools
(… then analyze it)
63Mohammad Al Bataineh Lecture 06
3
Quantitative Risk Analysis Tools
(Calculate the Expected Monetary Value of
your risks)
64Mohammad Al Bataineh Lecture 06
1
Quantitative Risk Analysis Tools
(Calculate the Expected Monetary Value of
your risks)
65Mohammad Al Bataineh Lecture 06
2
3
Exercise 1
66Mohammad Al Bataineh Lecture 06
Exercise 1
67Mohammad Al Bataineh Lecture 06
ration: حصة
Decision Tree Analysis
68Mohammad Al Bataineh Lecture 06
There’s another way to do EMV—you can do it visually using something called a decision tree. This decision tree shows the hidden costs of whether or not you buy a heavier tent. The tent is more expensive—it costs $350, while the lighter tent costs $130. But the heavier tent has better protection against the wind, so if there are high winds, your equipment isn’t damaged.
Decision Tree Analysis
69Mohammad Al Bataineh Lecture 06
Decision Tree Analysis
70Mohammad Al Bataineh Lecture 06
Exercise 2
71Mohammad Al Bataineh Lecture 06
Response for Positive Risks
72Shadi AlboonLecture 06
It isn’t always so bad• Strategies for handling negative risks: avoid, mitigate,
transfer, and accept
• There are strategies for handling positive risks, too. • The difference is that strategies for positive risks are
all about how you can try to get the most out of them:
Exploit Share Enhance Accept
Response for Positive Risks
73Shadi AlboonLecture 06
Exploit• This is when you do everything you can to make sure
that you take advantage of an opportunity.• You could assign your best resources to it. • Or you could allocate more than enough funds to be
sure that you get the most out of it.
Share• Sometimes it’s harder to take advantage of an
opportunity on your own. • You might call in another company to share in it with
you.
Response for Positive Risks
74Shadi AlboonLecture 06
Enhance• This is when you try to make the opportunity more
probable by influencing its triggers. • For Example, if getting a picture of a rare bird is
important, then you might bring more food that it’s attracted to.
Accept• Just like accepting a negative risk• The best thing to do in that case is to just accept it!
Response for Positive Risks
75Shadi AlboonLecture 06
Exploit share Enhance Accept scenario
On your way up the cliff, you meet another team that is looking to survey the area. You offer to do half of the surveying work while they do the other half and then trade your findings with one another.
About 10 years ago a really rare bird, the black-throated blue warbler, was seen on this cliff. If you could get a picture of it, it would be worth a lot of money. So, you bring special seeds that you have read are really attractive to this bird, and you set up lookout points around the cliff with cameras ready to get the shot.If the weather’s good, then there’s a chance you could see a meteor shower. If the team gets a photo that wins the meteor photo contest, you can get extra funding. You have your team stay up all night with their telescopes and cameras ready.There’s always the chance that someone could make a mistake and fall off the cliff. No matter how much you plan for the unexpected, sometimes mistakes happen.
Response for Positive Risks
76Shadi AlboonLecture 06
Exploit share Enhance Accept scenario
On your way up the cliff, you meet another team that is looking to survey the area. You offer to do half of the surveying work while they do the other half and then trade your findings with one another.
About 10 years ago a really rare bird, the black-throated blue warbler, was seen on this cliff. If you could get a picture of it, it would be worth a lot of money. So, you bring special seeds that you have read are really attractive to this bird, and you set up lookout points around the cliff with cameras ready to get the shot.If the weather’s good, then there’s a chance you could see a meteor shower. If the team gets a photo that wins the meteor photo contest, you can get extra funding. You have your team stay up all night with their telescopes and cameras ready.There’s always the chance that someone could make a mistake and fall off the cliff. No matter how much you plan for the unexpected, sometimes mistakes happen.
Response for Positive Risks
77Shadi AlboonLecture 06
Exploit share Enhance Accept scenario
On your way up the cliff, you meet another team that is looking to survey the area. You offer to do half of the surveying work while they do the other half and then trade your findings with one another.
About 10 years ago a really rare bird, the black-throated blue warbler, was seen on this cliff. If you could get a picture of it, it would be worth a lot of money. So, you bring special seeds that you have read are really attractive to this bird, and you set up lookout points around the cliff with cameras ready to get the shot.If the weather’s good, then there’s a chance you could see a meteor shower. If the team gets a photo that wins the meteor photo contest, you can get extra funding. You have your team stay up all night with their telescopes and cameras ready.There’s always the chance that someone could make a mistake and fall off the cliff. No matter how much you plan for the unexpected, sometimes mistakes happen.
Response for Positive Risks
78Shadi AlboonLecture 06
Exploit share Enhance Accept scenario
On your way up the cliff, you meet another team that is looking to survey the area. You offer to do half of the surveying work while they do the other half and then trade your findings with one another.
About 10 years ago a really rare bird, the black-throated blue warbler, was seen on this cliff. If you could get a picture of it, it would be worth a lot of money. So, you bring special seeds that you have read are really attractive to this bird, and you set up lookout points around the cliff with cameras ready to get the shot.
If the weather’s good, then there’s a chance you could see a meteor shower. If the team gets a photo that wins the meteor photo contest, you can get extra funding. You have your team stay up all night with their telescopes and cameras ready.There’s always the chance that someone could make a mistake and fall off the cliff. No matter how much you plan for the unexpected, sometimes mistakes happen.
Response for Positive Risks
79Shadi AlboonLecture 06
Exploit share Enhance Accept scenario
On your way up the cliff, you meet another team that is looking to survey the area. You offer to do half of the surveying work while they do the other half and then trade your findings with one another.
About 10 years ago a really rare bird, the black-throated blue warbler, was seen on this cliff. If you could get a picture of it, it would be worth a lot of money. So, you bring special seeds that you have read are really attractive to this bird, and you set up lookout points around the cliff with cameras ready to get the shot.
If the weather’s good, then there’s a chance you could see a meteor shower. If the team gets a photo that wins the meteor photo contest, you can get extra funding. You have your team stay up all night with their telescopes and cameras ready.
There’s always the chance that someone could make a mistake and fall off the cliff. No matter how much you plan for the unexpected, sometimes mistakes happen.
There is always Risks
80Shadi AlboonLecture 06
Risks Monitor and Control• Monitor and Control Risks is another change
control process• Risk responses are treated just like changes. • You monitor the project in every status meeting to
see how the risks in the risk register are affecting it. • If you need to implement a risk response, you take it
to your change control board
81Shadi AlboonLecture 06
Risks Monitor and Control
82Shadi AlboonLecture 06
Risks Monitor and Control Tools
Risk reassessment• You should have some regularly scheduled
reassessment meetings
• Go over all of the information you have to date and see if your risk register still holds true.
• In a reassessment, your main goal is to find any new risks that have come up.
• It’s important to re-assess your risk register every so often,
• Make sure that all of the risks in it are still the right ones.
83Shadi AlboonLecture 06
Risks Monitor and Control Tools
Variance and trend analysis• Comparing the actual project performance to the
plan to tell if a risk might be happening.
• If you find that you’re significantly over budget or behind schedule.
• Looking for trends in your defects or schedule variance
• For example, might show patterns that indicate that risks have occurred. 84
Shadi AlboonLecture 06
Risks Monitor and Control Tools
Reserve analysis• You should always know how much money you have
set aside for risk response.
• As you spend it, you should be sure to subtract it so you know if you have enough to cover all of your remaining risks.
• If you start to see that your reserves are running low and there are still a lot of risks being identified, you might be in trouble.
85Shadi AlboonLecture 06
Risks Monitor and Control Tools
Risk audits• An outside party come in and take a look at your risk
response strategies to judge how effective they are. • Sometimes risk audits will point out better ways of
handling a specific risk .• So that you can change your response strategy going
forward.
86Shadi AlboonLecture 06
Risks Monitor and Control Tools
Technical performance measurement
• Comparing the performance of your project with its planned performance.
• Check performance information on your product at that time to see if it measured up to the plan.
• If not, that might indicate that there are risks you didn’t plan for.
87Shadi AlboonLecture 06
Risks Monitor and Control Tools
Status meetings • The most important way to keep the team up to date
on risk planning • Should happen throughout the entire project. • The more you talk about risks with the team, the
better. • Every single status meeting should have risk review
on the agenda. • Important way of noticing when things might go
wrong, and making sure that you implement your response strategy in time.
• It’s also possible that you could come across a new opportunity by talking to the team. 88
Shadi AlboonLecture 06
Exercises 1. At every milestone, you do a new round of Identify Risks
and make sure that the risks in your risk register still apply to the project.
2. Your company sends a risk expert in to take a look at your risk response strategies. She finds that you are missing a few secondary risks that might be caused by the responses you have planned. So you update your risk register to include the secondary risks.
89Shadi AlboonLecture 06
Exercises 1. At every milestone, you do a new round of Identify Risks
and make sure that the risks in your risk register still apply to the project.
2. Your company sends a risk expert in to take a look at your risk response strategies. She finds that you are missing a few secondary risks that might be caused by the responses you have planned. So you update your risk register to include the secondary risks.
90Shadi AlboonLecture 06
Exercises 1. At every milestone, you do a new round of Identify Risks
and make sure that the risks in your risk register still apply to the project.
2. Your company sends a risk expert in to take a look at your risk response strategies. She finds that you are missing a few secondary risks that might be caused by the responses you have planned. So you update your risk register to include the secondary risks.
91Shadi AlboonLecture 06
Exercises 3. You decide to implement a risk response that costs
$4,000. You check to make sure that you have enough money to cover the rest of the risks that might happen from here on out in the
92Shadi AlboonLecture 06
Exercises 3. You decide to implement a risk response that costs
$4,000. You check to make sure that you have enough money to cover the rest of the risks that might happen from here on out in the
93Shadi AlboonLecture 06
Questions
94Mohammad Al Bataineh Lecture 06