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Project Risk Management LEC2

This document provides an overview of project risk management concepts and the plan risk management process. It discusses key concepts like individual project risk and overall project risk. It also covers trends like non-event risks, project resilience, and integrated risk management. The plan risk management process defines how risk management activities will be conducted and ensures the approach is proportional to project risks and importance. The main output is a risk management plan that documents the risk strategy, methodology, roles, funding, timing, risk categories, and other details.

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Huma Suleman
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81 views22 pages

Project Risk Management LEC2

This document provides an overview of project risk management concepts and the plan risk management process. It discusses key concepts like individual project risk and overall project risk. It also covers trends like non-event risks, project resilience, and integrated risk management. The plan risk management process defines how risk management activities will be conducted and ensures the approach is proportional to project risks and importance. The main output is a risk management plan that documents the risk strategy, methodology, roles, funding, timing, risk categories, and other details.

Uploaded by

Huma Suleman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Module: Project Risk Management

Instructor: Bilal Ahmad

LECTURE: Introduction
Project Risk management
KEY CONCEPTS FOR PROJECT RISK
MANAGEMENT
 Risk exists at two levels within every project.

 Individual project risk


○ is an uncertain event or condition that, if it occurs, has a
positive or negative effect on one or more project objectives.

 Overall project risk


○ is the effect of uncertainty on the project as a whole
TRENDS AND EMERGING PRACTICES IN
PROJECT RISK MANAGEMENT

 Non-event risks

 Variability risk
○ Uncertainty exists about some key characteristics of a
planned event or activity or decision

 Ambiguity risk.
○ Uncertainty exists about what might happen in the future.
Areas of the project where imperfect knowledge might affect
the project’s ability to achieve its objectives
 Project resilience

 Right level of budget and schedule contingency for


emergent risks, in addition to a specific risk budget
for known risks;

 Flexible project processes that can cope with


emergent risk while maintaining overall direction
toward project goals, including strong change
management;

 Empowered project team that has clear objectives


and that is trusted to get the job done within agreed
upon limits;
Project resilience

 Frequent review of early warning signs to


identify emergent risks as early as possible; and

 Clear input from stakeholders to clarify areas


where the project scope or strategy can be
adjusted in response to emergent risks.
 Integrated risk management
 Projects exist in an organizational context
 Risks should be owned and managed at the
appropriate level
PLAN RISK MANAGEMENT

 Process of defining how to conduct risk


management activities.

 Ensures that the degree, type, and visibility of risk


management are proportionate to both risks and
the importance of the project to the organization
and other stakeholders.

 Performed once or at predefined points in the


project.
PLAN RISK MANAGEMENT: INPUTS

 PROJECT CHARTER
 High-level project description and
boundaries, high-level requirements, and
risks.

 PROJECT MANAGEMENT PLAN


 All approved subsidiary management plans
PLAN RISK MANAGEMENT: INPUTS

 PROJECT DOCUMENTS
 Stakeholder register
○ Project roles and their attitude

 ENTERPRISE ENVIRONMENTAL
FACTORS
 overall risk thresholds set by the organization or key
stakeholders
PLAN RISK MANAGEMENT: INPUTS

 ORGANIZATIONAL PROCESS ASSETS


 Organizational risk policy;
 Risk categories, possibly organized into a risk
breakdown structure;
 Common definitions of risk concepts and terms;
 Risk statement formats;
PLAN RISK MANAGEMENT: INPUTS

 ORGANIZATIONAL PROCESS ASSETS


 Templates for the risk management plan, risk register,
and risk report;
 Roles and responsibilities;
 Authority levels for decision making; and
 Lessons learned repository from previous similar
projects.
PLAN RISK MANAGEMENT: TOOLS
AND TECHNIQUES
 EXPERT JUDGMENT

 Individuals or groups with specialized knowledge or


training in the following topics:

○ Organization’s approach to managing risk, including


enterprise risk management
○ Tailoring risk management
○ Types of risk
PLAN RISK MANAGEMENT: TOOLS
AND TECHNIQUES
 DATA ANALYSIS
 Techniques that can be used for this process includes
but are not limited to a stakeholder analysis.

 MEETINGS
 Project kick-off meeting or a specific planning
meeting
 Attendees
 Others outside the organization may also be invited
 skilled facilitator
PLAN RISK MANAGEMENT: TOOLS
AND TECHNIQUES
 MEETINGS
 Plans for conducting risk management activities are
defined in these meetings and documented in the risk
manag.ement plan
PLAN RISK MANAGEMENT: OUTPUTS
 RISK MANAGEMENT PLAN
 Risk strategy
○ general approach to managing risk on this project.

 Methodology
○ specific approaches, tools, and data sources that will be used
to perform risk management on the project.

 Roles and responsibilities.


○ lead, support, and risk management team members for each
type of activity described in the risk management plan, and
clarifies their responsibilities.
RISK MANAGEMENT PLAN
 Funding
○ funds needed to perform activities related to Project Risk
Management
○ Establishes protocols for the application of contingency and
management reserves.

 Timing
○ when and how often the Project Risk Management processes
will be performed.

 Risk categories.
○ grouping individual project risks
○ structure risk categories is with a risk breakdown structure
(RBS)
Sample Risk Breakdown Structure (RBS)
RISK MANAGEMENT PLAN
 Stakeholder risk appetite
○ recorded in the risk management plan
○ measurable risk thresholds around each project objective.

 Definitions of risk probability and impacts.


○ specific to the project context and reflect the risk appetite and
thresholds of the organization and key stakeholders.
RISK MANAGEMENT PLAN

 Probability and impact matrix.


 Prioritization rules may be specified by the
organization in advance of the project and be
included in organizational process assets, or they may
be tailored to the specific project.
RISK MANAGEMENT PLAN

 Reporting formats.
 How the outcomes of the Project Risk Management
process will be documented, analyzed, and
communicated.

 Tracking.
 How risk activities will be recorded and how risk
management processes will be audited.
 Thank you for your time and attention

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