Project Risk Management

1. Project Risk Management Value Performance Ltd 3 Wilson Road Tel: 01330 538391 Mob: 07900 916182 Fax: 03300882555 Email: paulfoy@valueperformance.co.uk Web: www.valueperformance.co.uk

2. Why Do Projects Fail ? • Over optimistic plans • Unrealistic milestones • Scope creep • Unavailable resources • Lack of definition/understanding • Unanticipated events • Expectations not met

3. The Risk Management Process Establish Project Goals Identify Risks (and opportunities) Evaluate for Probability and Impact Create Risk Model Prioritise Risks Mitigate Risks Carry out analysis Interpret and act on results Manage Mitigations

4. Establish Project Goals Identify Risks (and opportunities) Evaluate for Probability and Impact Create Risk Model Prioritise Risks Mitigate Risks Carry out analysis Interpret and act on results Manage Mitigations

5. Project Goals • HSE (No harm to people or the environment) • Schedule (First oil by October 1st) • Cost (Keep within budget plus 15%) • Quality (98% uptime for 3 years) • Reputation (enhance relationship with stakeholders)

6. Quality Safety Cost Schedule

7. What can possibly go wrong ?

8. Establish Project Goals Identify Risks (and opportunities) Evaluate for Probability and Impact Create Risk Model Prioritise Risks Mitigate Risks Carry out analysis Interpret and act on results Manage Mitigations

9. The Risk Register(For risk events)

10. Uncertainty

11. Establish Project Goals Identify Risks (and opportunities) Evaluate for Probability and Impact Create Risk Model Prioritise Risks Mitigate Risks Carry out analysis Interpret and act on results Manage Mitigations

13. Establish Project Goals Identify Risks (and opportunities) Evaluate for Probability and Impact Create Risk Model Prioritise Risks Mitigate Risks Carry out analysis Interpret and act on results Manage Mitigations

14. The Modelling Cycle Define Problem Real World Interpret Results Apply to real World Formulate Model Quantify Variables Make Assumptions Run Model Computer World

15. Establish Project Goals Identify Risks (and opportunities) Evaluate for Probability and Impact Create Risk Model Prioritise Risks Mitigate Risks Carry out analysis Interpret and act on results Manage Mitigations

16. Finish Date S Curves

17. Duration S Curves

18. Cost S Curves

19. Table of Results

20. Distribution Analyser

21. Risk/cost/schedule Sensitivity Tornado Diagrams

22. Contingency Comparison

23. Establish Project Goals Identify Risks (and opportunities) Evaluate for Probability and Impact Create Risk Model Prioritise Risks Mitigate Risks Carry out analysis Interpret and act on results Manage Mitigations

25. Establish Project Goals Identify Risks (and opportunities) Evaluate for Probability and Impact Create Risk Model Prioritise Risks Mitigate Risks Carry out analysis Interpret and act on results Manage Mitigations

26. Review and Modify • Aggressively manage risk register • Add and remove risks • Re-run risk model • Use results to make strategic project decisions • Adjust project resources • Report to management

27. Hard Benefits • Better informed and more believable plans, schedules and budgets. • Increases the likelihood of a project adhering to its schedules and budgets • More meaningful assessment of contingencies • Reduces requirement for financial bail-out • Releases contingency in a timely manner

28. Soft Benefits • Focuses project management attention on the real and most important issues • Demonstrates a responsible approach to customers

29. Ref. APM Project Risk Analysis and Management Guide

30. VP aim to change the way individuals think in order to instill a risk management culture where people instinctively identify risks and opportunities and evaluate their possible consequencesusing workable processes resulting in proper prioritisation and effective decision making.

31. Good Risk Management improves reputation, confidence and performance from the personal to the corporate level.

32. ‘If you are managing your risks, you are managing your project’