Chapter(2)

1. Chapter(2) Risk Identification

2. When and Where Occurs • Risk identification occurs through each of the four phases of project development: • Planning • Scoping • Design/Plans, Specifications and Estimate (Engineer’s Estimate) • Construction • As projects evolve through project development so too the risk profile evolves project knowledge and understanding grows. • Identified risks may change • New risks identified throughout the life ofthe project.

3. Risk Identification: Inputs, Tools and Techniques, Outputs • Risk Identification Inputs: • Defined project • Defined Scope • Defined schedule • Estimate

4. Risk Identification Tools and Techniques • Try to identify as many risks as possible that may affect project objectives. • State the assumptions for risk identification and analysis and delineate thresholds for risks.

5. Documentation Reviews • Peer level reviews of project documentation, studies, reports, preliminary plans, estimates and schedules are a common and early method to help identify risks that may affect project objectives.

6. Information Gathering • Brainstorming • Formal and informal brainstorming sessions with project team members and extended project team members such as specialty groups, stakeholders and regulatory agency representatives is a technique for risk identification. • This technique can be scaled for use on the simplest to the most complex projects. • This technique can also be tailored to specific areas of interest for the project risk,

7. Information Gathering • Lessons Learned Database • Searching for lessons learned that are relevant to your project can provide an abundance of information on projects that may have faced similar risks.

8. Information Gathering • Other methods: • There are many techniques, some common techniques include: • questionnaires and surveys • interviewing • Checklists • examination of the Work Breakdown Structure for the project • asking “what-if’ questions, for example “what-if the taxes were increased”.

9. Risk Identification Outputs • An expected deliverable from Risk Identification includes a preliminary “risk register” which documents the following information: • Identification # for each risk identified • A unique number is assigned to each risk for tracking purposes. • If available this can be done utilizing an established Risk Breakdown Structure (RBS).

10. RBS - Example

11. Risk Identification Outputs • Date and phase of project development when risk was identified • Document the date the risk was identified and which project development phase (planning, scoping, design/PS&E, construction).

12. Risk Identification Outputs • Name of Risk (does the risk pose a threat or present an opportunity?) • Each identified risk should have: • an appropriate name, for example “NEPA Delay” or “Reduction in Condemnation” • the nature of the risk with respect to project objectives (threat or opportunity) should also be documented. • This can be done using the Risk Breakdown Structure (RBS) for naming conventions.

13. Risk Identification Outputs • Detailed Description of Risk Event • The description must be provide information that is Specific, Measurable, Attributable (a cause is indicated), Relevant, and Time bound (SMART). • The description must be clear enough and thorough enough so that others reading about the description of the risk will understand what it means.

14. Risk Identification Outputs • Risk Trigger • Each identified risk must include the risk trigger(s). • Risks rarely just suddenly occur; usually there is some warning of imminent threat or opportunity. • These warning signs should be clearly described and information about the risk trigger should be documented. • For example: “NEPA Approval Date” may be considered a risk trigger on a project that has a risk of a legal challenge, or other as appropriate.

15. Risk Identification Outputs • Risk Type • Does the identified risk affect project schedule, cost, or both? • Potential Responses to Identified Risk • Document, if known, possible response actions to the identified risk, responses for threats include: • Avoided • Transferred • Mitigated • Accepted • Responses for opportunities include: • Exploited • Shared or • Enhanced

16. Risk Identification Outputs • Comments about Risk Identification • Risk Management is an iterative process. • risks should be reviewed regularly • as new risks are identified they should be documented and assessed. • The resulting risk register should only be considered preliminary until the completion of additional and appropriate activities.

17. How to Identify Risk • Determine risk thresholds for the project (establish a minimum dollar amount and time duration considered significant for the project under evaluation). • Focus on identifying large significant risks which affect project objectives. • Carefully document and describe risks in a risk register.

18. HELPFUL HINTS FOR RISK IDENTIFICATION • Determine, for your project, what constitutes “significant” risk. • Thoroughly describe the risk – there is a form in the following pages to help with this or you may create your own. • Include specialty groups and/or other persons who may have meaningful input regarding the challenges the project may face. • Determine who “owns” the risk and who will develop a response.

19. Risk IdentificationTable 2.1

22. Figure 2-1 Blank template for documenting identified risks (tailor to your needs).

23. Figure 2-2 Example of how template is used.

24. Figure 2-3 Risk Breakdown Structure for categorizing and organizing risks.

25. Figure 2-3 Risk Breakdown Structure for categorizing and organizing risks.

26. Figure 2-4 Example of risk identification using spreadsheet from Project Management