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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.


Identify risk risk breakdown structure
Identify Risk Risk Breakdown Structure


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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