Project Risk Management

- An Overview

Hossam Maghrabi, PMP

Agenda

Objectives & Outcome.

Risk Definition & Impact.

Risk Management Process.

Risk Management Implementation.

Q & A.

Objectives & Outcome.

Objectives

Provide an overview on Project Risk Management.

High level explanation of Project Risk Management Implementation.

Outcome

On completion of this session you will be able to start your journey for managing a project’s risks based on PMBOK Guide(5th Edition).

More than 60 % of companies have experience

project failure

Why?

Risk Definition

What is the risk?Risk is a possible future event or condition that, if it occurs,

will result in a positive or negative impact to a project’s

objectives. Each Risk has a cause and, if it occurs, a

consequence. Example,

A Project solution needs to be implemented in all of a company’s

worldwide locations, including those in developing countries. If the

telecommunications lines are not upgraded on time where

necessary, the solution will not be viable in those locations.

Is it a risk that you have to implement the solution in developing

countries?

No, that is the cause. It is a fact or a requirement.

Is it a risk that the solution will not be available in certain countries?

No, that is the potential effect of what might occur in this scenario.

Is it a risk that the necessary telecommunications upgrades are not

performed on time?

Yes, this is where the uncertainty lies.

Example,

Team may decide to utilize a new technology on its project because they

think it will result in dramatic effort and cost savings.

There is also a chance the new technology will not work.

However, the team introduces the risk because the potential for gain.

This is an example of intelligent risk taking or positive risk.

Risk Impact

Risk management process

• Risk management PlanningThe process of deciding how to conduct risk management

activities for a project. ( Methodology, Roles and Responsibilities,

Budgeting, Timing, Scoring , Reporting and Tracking )

• Risk identificationThe process of determining which risks may affect the project and

documenting their characteristics. (Stakeholder, The format of the risk

statements)

• Qualitative Risk AnalysisThe process of prioritizing risks for further analyses or

action by assessing and combining their Probability

of occurrence and impact.

• Quantitative Risk AnalysisThe process of numerically analyzing the effect of identified risks on

overall project objective.

• Risk response planningThe process of developing options and actions to enhance

opportunities and reduce threats to project objectives.

• Risk Monitoring and controlThe process of implementing risk response plans, tracking identified

risk, monitoring residual risks, identifying new risks, revaluating risk

process effectiveness throughout the project.

Risk management process

Risk Management Implementation

• Terms

• AssumptionSomething that is believed to be true. Assumptions can be about such things

as the deliverables, estimates, technical environment, experience level of staff,

and end-user responsibilities.

• RiskA possible future event or condition that, if it occurs, will result in a positive or

negative impact to a project objective. Each Risk has a cause and, if it occurs, a

consequence.

• IssueSomething currently happening that needs resolution to avoid negative

impact to scope, timing, requirements, cost, quality, resources, or progress

according to the plan.

Threat

Probability = 100%

ISSUE

There is an action

and entry in the

issue log.

Probability < 100%

RISK (threat)

There is a Risk response plan.Could be:• Proactive:

Transfer, Mitigate, Accept, Avoid

• Reactive: Contingency Plan

Opportuni

ty

Probability < 100%

There is a strategy for each opportunity.Could be:Exploit , Enhance, Share , Accept

Low Probability ??OR Low Impact??

Risk Management Implementation

Watch ListAssumption / Risk

A s s u m p t I o n

Low Probability??

ORLow Impact??

Risk Management Life Cycle

Identify Risks

Monitor & Control Risks

Plan Risk Response

Risk Management Close-out

Develop Risk Management Plan

Risk

Budgeting

Analyze Risks

Update as

Appropriate

Repeats

Through the

Road Map

Minimum Weekly

Reviews

Questions

Thank You