RTA PTP Risk Management Presentation

8/13/2019 RTA PTP Risk Management Presentation

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People. Processes. Technology. Results.

PMI Project Risk Management

By: Yasser M. El-SheikhRTA - Public Transport Projects


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Agenda

Risk Management Knowledge Sharing session

Introductions and Overview 05 mins

Risk Management Planning 10 mins

Risk Identification 10 mins

Qualitative Risk Analysis 10 mins

Quantitative Risk Analysis 10 mins Risk Response Planning 10 mins

Risk Monitoring & Control 10 mins

Sample Questions 20 mins

Open Discussions 10 mins


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Project Risk Management - Overview

The objectives of Project Risk Management are to increase the probability andimpact of positive events, and decrease the probability and impact of eventsadverse to the project.

Key Process Areas

Risk Management Planning deciding how to approach, plan, and execute the riskmanagement activities for a project

Risk Identification determining which risks might affect the project and documenting theircharacteristics

Qualitative Risk Analysis prioritizing risks for subsequent further analysis or action byassessing and combining their probability of occurrence and impact

Quantitative Risk Analysis numerically analyzing the effect on overall project objectives ofidentified risks

Risk Response Planningdeveloping options and actions to enhance opportunities, and toreduce threats to project objectives

Risk Monitoring & Control tracking identified risks, monitoring residual risks, identifying newrisks, executing risk response plan, and evaluating their effectiveness throughout the project lifecycle


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Risk Management Planning


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Risk Management Planning

Risk Management Planning : Inputs, Tools & Techniques, andOutputs


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Risk Management Planning Objectives

How to approach and conduct Risk Management activities

Prepare Risk Management Plan


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Risk Management Planning : Inputs

1. Enterprise Environmental Factors

Risk Attitudes

Risk Tolerance

2. Organizational Process Assets

Risk Categories

Common Definition of Concepts and terms

Standard templates

Roles and Responsibilities

3. Project Scope Statement

4. Project Management Plan


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Risk Management Planning : Tools & Techniques

1. Planning Meetings and Analysis

Basic plan for conducting Risk Management activities

Risk Cost Elements Risk Scheduled Activities

Risk responsibilities

Tailoring of Organization templates


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Risk Identification


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Risk Identification Process


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Risk Identification Objectives

Determining Risks that could impact the project

Documenting project risk characteristics


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Risk Identification: Inputs

1. Enterprise Environmental Factors

Published Information

Commercial databases

Academic studies

Benchmarking and other Industry studies


Historical experiences


Uncertainty in project assumptions

4. Risk Management Plan

Assignment of roles and responsibilities

Provision for Risk Management activities in Schedule and Budget

Categorizing Risks



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Risk Identification: Tools & Techniques

1. Documentation Reviews

Performing structured reviews of Project artifacts

2. Information Gathering Techniques

Brainstorming

Delphi Technique

Interviewing

Root Cause Identification

SWOT Analysis

3. Checklist Analysis

Developing Risk identification checklist based on historicalprecedence's

4. Assumptions Analysis5. Diagramming Techniques

Cause-and-effect diagram

System or process flow charts

Influence diagrams


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Risk Identification: Outputs

1. Risk Register

List of identified risks

List of potential responses to a risk

Root causes of risk

Updated risk categories


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Qualitative Risk Analysis


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Qualitative Risk Analysis


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Qualitative Risk Analysis Objectives

Determining the priority of the identified risks

Ranking the risk by priority

Determining the impact on the project objectives


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Qualitative Risk Analysis : Inputs


Data about risks on past projects

Lessons learned knowledge base2. Project Scope Statement

Projects of common or recurring type

Projects using first-of-its-type technology

3. Risk Management Plan Roles and responsibilities

Budget, and schedule activities for risk management

Risk Categories

Definition of probability and impact

Probability and impact matrix

Revised stakeholders tolerance

4. Risk Register


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Qualitative Risk Analysis : Tools & Techniques

1. Risk Probability and Impact Assessment

Risk assessment by interviews

Meetings with participants

2. Probability and Impact Matrix

Risk ratings

Classification of risks as high, moderate and low

Risk Score Card

3. Risk data Quality Assessment

Accuracy

Quality

Integrity of data about risk

4. Risk categorization

By sources of risk

By area of project affected

5. Risk Urgency Assessment


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Qualitative Risk Analysis : Outputs

1. Risk Register Updates

Relative ranking or priority list of project risks

Risks grouped by categories

List of risks requiring responses in the near term

List of risks for additional analysis and response

Watchlists of low priority risk

Trends in qualitative risk analysis results


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Quantitative Risk Analysis


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Overview

Performed on the Risks already prioritized by QRA

Assigns the numerical value to the risk.

Various techniques for assigning the numerical values Monte CarloSimulation and Decision tree Analysis.

Objectives

Quantify the possible outcome of risk and its probability Identify the realistic and achievable cost, schedule and scope of the

project

Determine the management decision GO or NO-GO


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Quantitative Risk Analysis : Input

1. Organizational Process Asset

Information on similar risk in other projects, Risk database and study of similarrisk by specialist


Initial Risk identification


Roles and Responsibilities, risk categories, revised stakeholders

4. Risk Register

List of identified risks, Risk ranking and Risk Categorization


Project Schedule Mgt Plan

Controls Project schedule

Project Cost Mgt Plan

Controls Project budget


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Quantitative Risk Analysis : Tools & Technique

1. Data Gathering

Interviewing Info collected for Cost Optimistic (low), Pessimistic (High) and most likely (Medium)

Expert Judgment SMEs validate the risk and data


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Quantitative Risk Analysis : Tools & Technique

2. Modeling Techniques

Sensitivity Analysis helps to determine which risks have most impact on project

EMV Analysis Expected monetary value is a statistical concept and calculates theaverage outcome of future scenario

EMV = Each possible outcome of risk x probability of occurrence

Decision Tree Analysis It is a method to determine which of two decisions is the bestto make e.g. Buy-verses-Build scenario, Lease-or-purchase equations, and use in-houseresources rather than outsourcing.


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Quantitative Risk Analysis : Output


Probabilistic analysis of the project

Probability of achieving cost and timeobjectives

Prioritized list of Risks

that pose greatest threat

or greatest opportunity. that influence the criticalpath

That require greatest costcontingency.


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Risk Response Planning


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Risk Response Planning

Risk Response Planning is the process of developing options, anddetermining actions to enhance opportunities and reduce threats to the

project objectives.


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Risk Response Planning Objectives

How to approach and conduct Risk Response Planning

Prepare Risk response Plan


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Risk Response Planning : Inputs


Some components of the Risk Management Plan that are important inputs to RiskResponse Planning may include risk thresholds for low, moderate, and high risks to helpunderstand those risks for which responses are needed, assignment of personnel andscheduling and budgeting for risk response planning.

2. Risk Register

Important inputs to Risk response planning include the relative rating or priority list ofproject risks, a list of risks requiring response in the near term, a list of risks foradditional analysis and response, trends in qualitative risk analysis results, root causes,risks grouped by categories, and a watchlist of low priority risks.


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Risk Response Planning : Tools & Techniques

1. Strategies for Negative Risks or Threats

Avoid

Transfer

Mitigate2. Strategies for Positive Risks or Opportunities

Exploit

Share

Enhance3. Strategy for both Threats and Opportunities

Acceptance

4. Strategies for Negative Risks or Threats

Contingent Response Strategy


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Risk Response Planning : Outputs

1. Risk Register (Updates)

Identified Risks, their descriptions, area of project affected, their causes, and howthey may affect project objectives.

Risk owners and assigned responsibilities Prioritized lists of project risks and probabilistic analysis of the project

Agreed upon response strategies

Specific actions to implement the chosen response strategy

Symptoms and warning signs of risks occurrence

Budget and Schedule activities required to implement the chosen responses

Contingencies reserves of time and cost designed to provide for stakeholders risktolerances

Contingency plans and triggers that call for their execution

Fallback plans for use as a reaction to a risk that has occurred, and the primaryresponse proves to be inadequate

Residual risks that are expected to remain after planned responses have beentaken, as well as those that have been deliberately accepted.

Secondary risks that arise as a direct outcome of implementing a risk response.


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Risk Response Planning : Outputs

Contingency reserves that are calculated based on the quantitative analysis of theproject and the organisations risks thresholds.

2. Project Management Plan (Updates) Risk response strategies, once agreed to, must be fed back in to the appropriate

processes in other knowledge areas, including the projects budget and schedule.

3. Risk-Related contractual Agreements

Contractual agreements, such as agreements for insurance, services, and otheritems as appropriate, can be prepared to specify each partys responsibility forspecific risks, should they occur.


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Risk Monitoring & Control


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Risk Monitoring & Control Process


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Risk Monitoring & Control : Inputs


Risk Owners

Agreed upon risk Responses Specific implementation actions

Residual and secondary risk

Low priority risk

Time and cost contingency reserves

2. Risk Register

3. Approved Change Requests

Impact on risk register

Impact on risk response plan

Impact on risk management plan


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Risk Monitoring & Control : Inputs

4. Work Performance Information

Project deliverables status Corrective actions

Performance reports

5. Performance Report

Project work performance


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Risk Monitoring & Control : Tools &Techniques

1. Risk Reassessment

Identification of new Risk

Reassessment of the risk2. Risk audits

Document the effectiveness of risk response

Document the effectiveness of risk management process

Performance reports

3. Variance and Trend Analysis

Earned Value Analysis

Trend analysis

3. Reserve Analysis

4. Technical Performance Measurement

5. Status Meetings


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Risk Monitoring & Control : Outputs


Outcomes of Risk reassessment, Risk Audits and Risk Reviews

Outcome of Projects risk, and of risk responses

2. Requested Changes

3. Recommended Corrective Actions

Contingency Plan

Workaround Plans

4. Recommended Preventive Actions

5. Organizational Process Assets Updates

6. Project Management Plan Updates


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The risk management process


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1.Priority2.Establish the priority of each risk by identifying the likelihood of the risk's eventuating and its impact on the project. Oncethe likelihood and impact scores have been allocated, the priority score should be calculated as follows:Priorityequals the average Likelihoodand Impactscore

This is calculated as Priority = (Likelihood + Impact) / 2

Medium5080202.3

VeryHigh

80100802.2

Low3020402.1

High70401001.3

High7060801.2

Medium5080201.1

RatingPriorityScore

ImpactLikelihoodID

THE WORLD OF RISK


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HOW TOMANAGE

Risk

TERMINATETerminate the

potential risk in thebusiness theprobability ofoccurrence is to high /when it occurs. Theseverity / financialimpact will be too greatfor your business.

TRANSFERTransfer the risk or

the consequencesOf the risk to aThird party, selfFinance mechanismor to the insurancemarket

TREATAccept the risks- probability ofoccurrence is high,

Severity impacts willnot adversely affectthe business or youare able to managethose risks internallyby providing protectionsystems & procedures.

TOLERATEAccept the risks -probability andseverity impacts

will not adverselyaffect the businessor you are able tomanage those risksinternally.

THE WORLD OF RISK

Transfer Terminate

TreatTolerate

THE WORLD OF RISK


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Severity

Probability

0

Tolerate

Terminate

Treat

Transfer

THE WORLD OF RISK


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0

Risk

10

10

Severity

Probability

THE WORLD OF RISK


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0

Risk

Severity

Probability

10

10


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Thank you

Documents

RTA PTP Risk Management Presentation