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Risk Management Presentation ASQ- Greater Houston Section 1405. Lila Carden, Ph.D., MBA, PMP University of Houston Instructional Associate Professor [email protected] Agenda. ISO 31000 - Published in November 2009 Benefits of Risk Management 21 Ways to Excel at Project Management

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risk management presentation asq greater houston section 1405

Risk Management PresentationASQ- Greater Houston Section 1405

Lila Carden, Ph.D., MBA, PMP

University of Houston

Instructional Associate Professor

[email protected]

agenda
Agenda
  • ISO 31000 - Published in November 2009
  • Benefits of Risk Management
  • 21 Ways to Excel at Project Management
  • Risk Management Processes
  • Risk Management Application
  • Top 10 Risk Issues
  • 10 Golden Rules of Project Risk Management
iso 31000 published in november 2009
ISO 31000Published in November 2009
  • First international standard of risk management
  • Provides principles and generic guidelines on risk management
    • Plans will still need to include the needs of a specific organization
  • Standard that can be used by any public, private or community enterprise, association, group or individual
    • Not industry specific
    • Useful for all managers – operational, financial and project

Gjerdrum, D. (2013). The new ERM gold standard: ISO 31000:2009. Retrieved from http://www.riskandinsurance.com/story.jsp?storyId=322335271

iso 31000 published in november 20091
ISO 31000Published in November 2009
  • Framework to integrate the process of managing risks and reporting
    • Risk management processes include identifying, analyzing, responding, implementing and monitoring risks.
    • Two key functions throughout implementation
      • Communication and consultation need to include internal and external stakeholders
      • Monitor and review need to include controls, lessons learned, responses to risks and ready for change

Gjerdrum, D. (2013). The new ERM gold standard: ISO 31000:2009. Retrieved from http://www.riskandinsurance.com/story.jsp?storyId=322335271

benefits of risk management
Benefits of Risk Management
  • Establishes project feasibility
  • Lowers costs – rework and unforeseen late efforts are reduced
  • Establishes project priority and management support - risk plan noting competence and preparation
  • Enables project portfolio management – low risk and high risk projects
  • Exposes weakness in project plans
  • Plans management reserves
  • Facilitates project communication and monitoring – exposes weaknesses to the team

Kendrick. T. (2009). Identifying and managing project risk. New York: AMACOM.

21 ways to excel at project management
21 Ways to Excel at Project Management
  • Managing the risks is number 6 on the list
  • Top 5 include
    • Sponsorship and Leadership
    • Defining the business objectives
    • Defining the project
    • Ensuring the project is a manageable size
    • Defining the budget

Haughey, D. ( 2013). 21 ways to excel at project management. Retrieved from http://www.projectsmart.com/

risk management processes
Risk Management Processes
  • PMBOK’s project risk management processes include:
    • Plan Risk Management – how to conduct risk management activities
    • Identify Risks – determine risks and document characteristics
    • Perform Qualitative Risk Analysis
    • Perform Quantitative Risk Analysis
    • Plan Risk Responses
    • Control Risks

PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.). Newtown Square, Pennsylvania: Project Management Institute, Inc.

plan risk management
Plan Risk Management

TABLE OF CONTENTS

  • 1.0Purpose Of The Risk Management Plan
  • 2.0risk management Procedure
  • 2.1Process
  • 2.2ROLES AND RESPONSIBILITIES
  • 2.3Risk Identification
  • 2.3.1Methods for Risk Identification
  • 2.4Risk Analysis
  • 2.4.1Qualitative Risk Analysis
  • 2.4.2Quantitative Risk Analysis
  • 2.5Risk Response Planning
  • 2.6Risk Monitoring, Controlling, And Reporting
  • 2.7Risk Contingency Budgeting
  • 3.0Tools And Practices
  • 4.0Closing a Risk
  • 5.0Lessons Learned
identify risks
Identify Risks
  • Techniques
    • Brainstorming
    • Interviewing
    • Root Cause Analysis
    • Delphi Technique – way to reach consensus of experts
      • Facilitator uses a questionnaire to obtain ideas
      • The responses are summarized then re-circulated to the experts for additional comments
  • Risk Breakdown Structure – structure for identifying risk

PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.). Newtown Square, Pennsylvania: Project Management Institute, Inc.

perform qualitative risk analysis
Perform Qualitative Risk Analysis
  • Tool
    • Risk Priority Matrix - probability and impact
perform quantitative risk analysis
Perform Quantitative Risk Analysis
  • Tools and techniques
    • Sensitivity Analysis – tornado diagram (useful for comparing importance and impact of variables)
    • Expected Monetary Value Analysis – decision tree
      • http://goo.gl/DXSglV
    • Modeling and Simulation – translates uncertainties to impact of project objectives
      • Monte Carlo
        • The model is computed many times with the input variables (cost estimates, durations) chosen at random for each iteration from the probability distributions of these variables.
        • A probability distribution (total cost or completion date) is calculated -
          • Example - 12% likely to meet the $41 million most likely cost estimate or a 70% likelihood of success with a budget of $50 million

PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.). Newtown Square, Pennsylvania: Project Management Institute, Inc.

plan risk responses
Plan Risk Responses
  • Negative risks
    • Avoid – change plan to eliminate threat entirely or shut down project entirely
    • Transfer – shifts risk to third party (consultant)
    • Mitigate – reduce probability or impact
      • Develop prototype
    • Accept – not take any action
      • Contingency Reserve – time, money or resources

PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.). Newtown Square, Pennsylvania: Project Management Institute, Inc.

plan risk responses1
Plan Risk Responses
  • Positive Risks
    • Exploit – ensure opportunity is realized
      • Most talented resources
    • Enhance – increase the probably and/or impact
      • Adding more resources
    • Share – allocating all or some of the ownership of the opportunity
      • Joint ventures, partnerships
    • Accept – take advantage of the opportunity if realized

PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.). Newtown Square, Pennsylvania: Project Management Institute, Inc.

control risk responses
Control Risk Responses
  • Use Risk Register to
    • Implement risk response plans
    • Track identified risks
    • Identify new risks
    • Evaluate risk process effectiveness throughout the project – risk audits including project review meetings
      • Deliverable status
      • Schedule progress
      • Costs

PMI Global Standard. (2013). A guide to the project management body of knowledge ((5th ed.). Newtown Square, Pennsylvania: Project Management Institute, Inc.

application risk overview example
Application – Risk Overview Example
  • http://capstone.tamu.edu/Teams/Spring%20%2708/VEG/deliverables/VEG_RiskAssessment.pdf
    • http://goo.gl/6clVE5
top 10 risk issues dr dieter fink
Top 10 Risk IssuesDr. Dieter Fink
  • 1. Understanding the risk concept
  • 2. Agreeing on what is project risk
  • 3. Recognizing risk events
  • 4. Determining the risk management approach
  • 5. Determining the risk tolerance
  • 6. Preparing the risk management plan
  • 7. Developing organizational risk processes
  • 8. Estimating risk severity
  • 9. Preparing the risk breakdown structure
  • 10. Creating and updating the risk register
    • Fink, D. (2011). Trends: Key Issues in Project Risk Management. TPM (February/March). Retrieved from

http://www.jkr.gov.my/prokom/images/stories/pdf/RM/trends.pdf

10 golden rules of project risk management bart jutte
10 Golden Rules of Project Risk Management Bart Jutte
  • 1. Make risk management part of your project
  • 2. Identify risks early in your project
  • 3. Communicate about risks
  • 4. Consider both threats and opportunities
  • 5. Clarify ownership of issues
  • 6. Prioritize risks
  • 7. Analyze risks
  • 8. Plan and implement risk responses
  • 9. Register project risks
  • 10. Track risks and associated tasks

Jutte, B. (2010). 10 golden rules of project risk management . Retrieved from http://www.projectsmart.com/articles/10-golden-rules-of-project-risk-management.php

intaver institute riskyproject 5
Intaver InstituteRiskyProject 5
  • http://intaver.com/index-tutorial4.html
references
References
  • Fink, D. (2011). Trends: Key Issues in Project Risk Management. TPM (February/March). Retrieved from

http://www.jkr.gov.my/prokom/images/stories/pdf/RM/trends.pdf

  • Gjerdrum, D. (2013). The new ERM gold standard: ISO 31000:2009. Retrieved from http://www.riskandinsurance.com/story.jsp?storyId=322335271
  • Haughey, D. ( 2013). 21 ways to excel at project management. Retrieved from http://www.projectsmart.com/
  • Jutte, B. (2010). 10 golden rules of project risk management . Retrieved from http://www.projectsmart.com/articles/10-golden-rules-of-project-risk- management.php
  • Kendrick. T. (2009). Identifying and managing project risk. New York: AMACOM.
  • PMI Global Standard. (2013). A guide to the project management body of knowledge (5th ed.). Newtown Square, Pennsylvania: Project Management Institute, Inc.
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