PMI KC Chapter Meeting Jan 2012

1. PMI KC Chapter Meeting Jan 2012 Project Risk Management A Tool to Deliver Projects On Time and Within Budget NK Shrivastava PMP, PMI-RMP Consultant/CEO - RefineM VP – PMI South Missouri Chapter nks@refinem.comhttp://www.linkedin.com/in/nkshrivastava@justrightpm January 16, 2012

2. Project Risk Management Learning's Develop better understanding of Project Risk Management What is a risk? The difference between risks & issues? The positive and negative risk concepts Identify, analyze and prioritize risks and develop risk responses for their projects, programs and portfolios Develop a graph/chart-based communication strategy to clearly and quickly communicate the project status at various points in time to stakeholders

3. Project Risk Management Agenda What is a Risk? Understanding Risk Why Manage Project Risks? PMI’s Practice Standard for Risk Management Risk Management Process Communicating Risks Q & A

4. Project Risk Management What picture comes to your mind when you hear the word “Risk”?

5. Project Risk Management What is a Risk?

6. Project Risk Management What is a Risk? Project risk is an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project's objectives. - From PMI's Practice Standard for Project Risk Management - Chapter2 , Page 9

7. More on Risks Source : http://thesaurus.com/browse/risk

8. Project Risk Management Is it necessary to manage project risks? Yes, Absolutely Why? To increase predictability To improve probability of success (SPI ~1, CPI ~1)

9. PMI’s Practice Standard For Project Risk Management Principles of Specialization Processes Handbooks Textbooks Courses Theory Tools/ Techniques Adapted from PMI’s Practice Standard for Project Risk Management

10. Project Risk Management Risk Management Process

11. Plan Risk Management Risk Management Process Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses Monitor and Control Risks Adapted from PMI’s Practice Standard for Project Risk Management

12. Plan Risk Management • Risk Mgmt Plan • Tailored Process • Risk Thresholds • Roles/Responsibilities • Risk Register Template Plan Risk Management Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses Monitor and Control Risks Adapted from PMI’s Practice Standard for Project Risk Management

13. Plan Risk Management • Risk Register • List of risks • Risk Owners Risk Identification Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses Monitor and Control Risks Adapted from PMI’s Practice Standard for Project Risk Management

14. Plan Risk Management Risk Qualitative Analysis Identify Risks • Updated Risk Register • Probability & Impact • Root Causes • Prioritized List of Risks • Watch List Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses Monitor and Control Risks Adapted from PMI’s Practice Standard for Project Risk Management

15. Plan Risk Management Risk Quantitative Analysis Identify Risks Perform Qualitative Risk Analysis • Updated Risk Register • Numerical models • Sensitivity analysis • (Monte Carlo Simulation) • Re-prioritized list Perform Quantitative Risk Analysis Plan Risk Responses Monitor and Control Risks Adapted from PMI’s Practice Standard for Project Risk Management

16. Plan Risk Management Plan Risk Responses Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis • Updated Risk Register • Strategies/Responses • Actions/Action Owners • Contingency Reserves Plan Risk Responses Monitor and Control Risks Adapted from PMI’s Practice Standard for Project Risk Management

17. Plan Risk Management Monitor & Control Risks Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses • Updated Risk Register • Variance Analysis • Risk Audit • Trends in risk exposure Monitor & Control Risks Adapted from PMI’s Practice Standard for Project Risk Management

18. Project Risk ManagementSo what is it? Identify What can go wrong? What can go right? Prioritize Which ones have the potential of impacting the most? Do something about it Exploit/Avoid or Enhance/Mitigate or Share/Transfer Or Accept (Passive/Active)

19. Project Risk Management Communicating Risks

20. Risk Behavior Over Time

21. Risk Impact on the Project Jun 2010

22. Project Risk Management How does it impact you? If you are the Project Manager… It makes YOU powerful !

23. You may know this …

24. Risk ManagementMakes YOU Powerful Right Level of Risk Management No Risk Management Covey’s habit #1 – Be Proactive Being Reactive

25. Project Risk ManagementWhat does the research say? Research of failed software projects showed that “their problems could have been avoided or strongly reduced if there had been an explicit early concern with identifying and resolving their high-risk elements. Effective risk management is the most important management tool a project manager can employ to increase the likelihood of project success. Since risk management is not widely used and understood, this could be a significant competitive advantage to those that implement the risk management processes in their projects. Risk Management makes YOU powerful !

26. Project Risk Management

27. Project Risk Management Summary Risk is an uncertain event, that if occurs, may impact project objectives in positive or negative manner. It is extremely important to manage project risks – to reduce uncertainty PMI’s six step Project Risk Management Process How to communicate Risks? – Thru pictures/graphs, on regular basis Risk Management makes YOU powerful !

28. Risk Register Template

29. Project Risk ManagementStatus Check

30. Project Risk Management Supporting Slides

31. Risk Identification Tool Project Historical Review Creativity Technique Current Assessment Past Present Future Adapted from PMI’s Practice Standard for Project Risk Management

32. Project Management Plan Risk Response Monitoring Risk Monitoring & Control Status Reviews Audits Risk Register Additional risk information Major project events Trigger conditions Stakeholder Communications Risk Response Control Lessons Learned Invoke contingency plans Perform additional risk identification, analysis & response planning Integrated Change Control Updates Adapted from PMI’s Practice Standard for Project Risk Management

33. Risk Identification Example Generic risks are actually issues, they normally need a different action plan

34. Qualitative Analysis Example

35. Quantitative Analysis Example

36. Risk Behavior Over Time

38. Risk Breakdown Structure (RBS) Adapted from PMI’s Practice Standard for Project Risk Management

39. Risk Mitigation Strategies Accept

40. Probability/Impact Matrix

41. Quantitative Analysis Techniques