PM workshop # 8 (Risk Management)

1. where the patients are PM workshop # 8 (Risk Management) Andrey Bazovoy Director, Clinical Operations 11 October 2013

2. Who is here? Alexey Anpilogov Elena Samoylova - absence Ekaterina Vrublevskaya Vladlena Baranovskaya - absence Mikhail Luzin Tsira Jibladze Dmytro Razborov Darya Makarova Natalia Stepanchenko Andrey Bazovoy

3. Agenda • Risk Management • Definition • Project Life cycle • Review CP-057 from Risk Mngm perspective (Mikhail Luzin) • The Basic Risk Management Process • Plan Risk Management • Identify Risks • Perform Qualitative Risk Analysis • Perform Quantitative Risk Analysis • Plan Risk Responses • Monitor and Control Risk

4. Course Objectives • At the end of this course you will: • Be familiar with Risk Metalanguage • Be able to describe the Risk Management Process • Be able to create a Risk Management Plan • Be able to accurately describe ‘Risks’ • Be familiar with various tools to identify and analyse Risks • Be aware of the importance of appropriate Risk Response Plans

6. Risk Management (definition) • A formal, systematic process to identify, analyze and respond to project risks, thereby removing or reducing their impact on the project • A proactive process • Done throughout the project lifecycle • An integral part of good project management • Risk Management is concerned with "conducting risk management planning, identification, analysis, response planning, and monitoring and control on a project.  • The objectives of Project Risk Management are to increase the probability and impact of positive events, and decrease the probability and impact of negative events in the project.“ • A proactive process • Done throughout the project lifecycle • An integral part of good project management

8. Why Conduct Risk Management? • Enables project team / management to: • Properly prepare for possible risk events “Known and Unknown” • Prevent / minimize surprises on the project • Prevent risks from becoming major issues • Minimiseprobability and effects of negative events • Enhance probability and effects of positive events • Increase the potential for project success

9. Risk Planning A project risk  is an uncertain event or condition that, if it occurs, has a negative or positive effect on at least one project objective. A risk has a cause and, if it occurs, an impact. Realized risks are issues, which should be captured and managed via the issues log and/or equivalent project tool(s).  

10. Mental GEOGRAPHICAL COVERAGE • Russia, Ukraine, • Baltic countries • Belarus, Georgia, • Romania, Moldova, • Bulgaria, Hungary, • Poland, Slovakia)

11. The Basic Risk Management Process • Plan Risk Management • Identify Risks • Perform Qualitative Risk Analysis • Perform Quantitative Risk Analysis • Plan Risk Responses • Monitor and Control Risk

12. The Basic Risk Management Process (1) • Plan Risk Management - The process of defining how to conduct risk management activities for a project. • Identify Risks - The process of determining which risks may affect the project and documenting their characteristics • tools: • the project stakeholder analysis • Constraints Analysis and Risk Log (CAR Log). • Risk Management plan

13. The Basic Risk Management Process (2) • Perform Qualitative Risk Analysis - The process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact. • Perform Quantitative Risk Analysis - The process of numerically analysing of effect of identified risks on overall project objectives. • Tools: • to and mitigating high-priority risks for their project => to update Risk Log

14. The Basic Risk Management Process (3) • Plan Risk Responses - The process of developing options and actions to enhance opportunities and to reduce threats to project objectives. • - avoid- this involves eliminating the risk. An example would be updating a protocol inclusion/exclusion criterion to eliminate a risk to enrollment. • - transfer- this involves transferring the risk to a third party. An example may be subcontracting to a third party that provides a service that CPh does provide. • - mitigate- this involves reducing the probability or impact. An example would be having a back-up traditional process in place for a new process that will be implemented on a project. • - accept- this involves taking no action to avoid, transfer or mitigate the risk. This would usually apply to risks that have a low risk ranking. • Tools: • the assignment of a risk owner, and triggers for implementing the action plan

15. The Basic Risk Management Process (4) • Monitor and Control Risk - The process of implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks, and evaluating risk process effectiveness throughout the project. • Tools: • Award Briefing Meeting, Customer Kick-off Meeting, Internal Kick-off Meeting and Quality Planning Team meeting

16. How Risk Management Integrates With Other Project Management Processes

17. Risk & Opportunity vs. Amount at Stake

18. Cause? Risk? Effect? • The customer has chosen the sites to be used – R/C • We’ve never done a project like this before - R • We may not have enough patients enrolled - C • Samples may not get delivered to our Central lab in time • We do not have enough resources • Project communications may take too much time • We will be using a new I.T. system • We are going to be over budget • Database lock will not happen on time • We may not initiate enough sites

19. CP-057 (PM-Mikhail Luzin) Cause vs. Risk vs. Effect Existing conditions on the project => Things that might happen => Impact on projectobjectives =>

20. Exercise -Cause? Risk? Effect? • The customer has chosen the sites to be used ____ • We’ve never done a project like this before ____ • We may not have enough patients enrolled ____ • Samples may not get delivered to our Central lab in time ____ • We do not have enough resources ____ • Project communications may take too much time ____ • We will be using a new I.T. system ____ • We are going to be over budget ____ • Database lock will not happen on time ____ • We may not initiate enough sites ____

21. Risk Meta-language “As a result of a <definite cause>, an <uncertain event> may occur, which would lead to <effect on project objective(s)>”* Cause Risk Effect Using this approach allows the project team to identifyreal risks, not causes or effects of risks ____ *Hillson, David, “Project Risk: Identifying Causes, Risks, and Effects”, PM Network, Sept. 2000

22. Risks vs. Issues Risks may become issues in the future Issues are happening now! “An issue is a risk whose time has come!” The goal of Risk Management is to keep risks from becoming issues

23. Improved planning, performance and effectiveness • More focused Project Team • Supports intelligent and informed risk-taking • Fewer shocks and unwelcome surprises • Develops Customer confidence in CromosPharma • Improved relationships with stakeholders. Results of Proper Risk Management

24. Initiate and lead the Risk Management Process • Integrate Risk Management Process into project operations • Provide clear direction to project team: • Risk Management process • Tools to be used • Roles and responsibilities –expectations of each team member • Ensure: • Risks are being managed properly • Response Plans are effective • Add Risk to agenda on team/customer meetings • Report risk management status to Stakeholders Project Manager Responsibilities:

25. BD – hand over Exercise: Who is involved in Risk Management? Project team/CO Finance….. Quality department – internal kick of meeting

26. Stakeholder Analysis

27. Risk Management Plan/Log: Project Management SOP requires the PM to produce a Risk Management Plan/log during Project Initiation and Planning • Who has a Risk Management Plan/log on their project? • PM/CRA/QM/MA • 2) What is included in the Risk Management Plan/log? • Objectives of the project identified • Stakeholders identified and analyzed • Methodology: define the tools and data sources to be used when performing Risk Management on the project • Roles and responsibilities –define who will lead and support the Risk Management process • Outline communication of Risk status to stakeholders • Define how often Risk Management process will be performed throughout the project • 3) What is the purpose of a Risk Management Plan? • • To outline decisions on how Risk Management is going to be implemented throughout the life of the project

28. The Risk Management Plan/Log: • Contains an assessment of project risks and plans for management of the risks. • Must include a risk tracking log. The risk log within the Opportunity Assessment and Risk Log (OARL) tool or an equivalent risk management tool must be used for this purpose. The risk log should include a comprehensive list of all risks (including quality risks) and risk management strategies. • Must be reviewed regularly at team meetings. This includes: • Reviewing and documenting the current status of risks already identified. • Identifying and documenting the management of new risks.

29. Risk Identification • The purpose is to identify all possible risks that could impact project objectives and the success of the project • When should you start this process? • After Risk Management Plan has been written • Who should be involved? • When should you revisit this process? Techniques Documentation Review Risk Breakdown Structure Brainstorming Interviewing Risk Identification Checklists Lessons Learned databases Crawford Slip Method

30. Qualitative Risk Analysis • The process of assessing the probability and impact of identified risks on project success • Risks are rated based on: • - Probability of occurrence • - Impact on project timelines, cost, quality, resources, scope, etc. • Risks are entered into a Risk Management Log • Risk Log calculates risk rating (score) • Use the Risk rating (score) to rank risks • Process is repeated at scheduled times during project lifecycle • As project Climate changes so can the probability and impact of identified risks

31. Risk Analysis: PI-Grid Scoring

32. Conducted after Qualitative Risk Analysis Estimating the numerical implication of identified risks using statistical techniques Frequently used methods: Interviewing stakeholders/subject matter experts Influence diagrams Monte Carlo simulation Decision tree analysis Quantitative Risk Analysis

33. Risk Responses Determining how to manage identified critical project risks Response Planning includes: Nominated owners for each Risk / Action Appropriate response strategy and agreed actions for each risk Setting risk thresholds that will trigger risk response actions Consideration of secondary risks Effective responses result in minimized threats and maximised opportunities

34. Risk Response Strategies • Threats • Avoid • Transfer • Mitigate (Reduce) • Accept • Risk Avoidance • Avoiding a risk by eliminating the cause • Examples: • Using well-established procedures rather than innovative, unproven ones • Contracting with trusted service providers rather than one who promises to do it, “faster”, “cheaper”, etc. • Risk Transfer • Shifting ownership of a risk and the response to a third party • Risk transfer may result in an overall reduction to the level of project risk if the party is more capable of managing it. • Transferring does not eliminate the Risk • Risk Mitigation • If the risk cannot be avoided, actions might be taken to reduce the probability or its impact if it does occur. • Examples: • If you are planning a trip up the mountains, one of the risks that will always exist is “getting lost.” (To mitigate this, you may purchase a map or hire a guide) • Applying risk response actions immediately even before ‘risk triggers’ are met • Risk Acceptance • Allowing a risk event to occur when its impact on the project is not serious • Passive Acceptance –Requires no action • Absorbing effects of the risk into normal project operations • Active Acceptance -Developing a contingency plan to use if the risk does occur • Create a list of alternative vendors that can supply materials needed with little notice

35. Monitor and Control The Project Manager must review the approach adopted for each phase, as stated An on-going process for the life of the project! Add ‘Risk’ to the top of the agenda of team meetings Send a communication out before the meeting asking for: Status of identified Risks Status of any issues New identified risks Present the updated Risk Log at the meeting Analysenewly identified Risks Focus on the risks that have highest potential to negatively or positively effect key project deliverables and timelines Contact Risk/Action owners separately to discuss Response Plans

36. Risk Reporting Risk / Action Owners report risk status to team Project Manager reports risk status to Customer/other stakeholders Risk Reporting Considerations: To whom? How / What format? Frequency? As per the Risk Management Plan

37. Learning from Risk Management Experience • Completed Risk Management Logs can be used to: • Develop more accurate proposals for future projects • Support decisions to avoid projects where the risks can not be properly managed • Update project risk checklists, lessons learned databases • Train/mentor project teams • Build corporate knowledge and improve project operations

38. Summary -Risk Management • Risk can be good • Without risk, there would be no reward • The purpose of risk management is not to eliminate risk, but to understand it so that you can take advantage of the upside and minimize the downside • This requires clarity on what risks you are prepared to take, how much, and that you have processes in place to manage these risks.

39. Successful Risk Management! “…some of my biggest worries never happened...”Mark Twain (20thCentury American writer and humorist)

40. THANK YOU And update your CV, PDP, get certificate