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What is Advanced Project Risk Management?
Rubin Jen, P. Eng, PMPBeyond Execution
March 3, 2011
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About The Speaker
• Rubin is a speaker, writer, teacher and consultant of project management – PM for 15 yrs across several industries– Presented at PMI Global Congress,
ProjectWorld Toronto, PMI Ottawa Symposium
– Served on board of directors for the PMI Southern Ontario Chapter from 2005-2007
– Project Management training on Risk, Scope and PMP
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Agenda
1. What is Advanced Project Risk Management?
2. How can it help?3. What should I know?4. How can I use and implement it?
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What’s Your Opinion?
• What do you think Advanced Project Risk Management (APRM) is?
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Different Ideas around APRMRisk Database
Probabilisticanalysis
Monte Carlo Insurance
Attack Risk
Visualization
ConfidenceLevels
Delphi
OpportunityManagement
RiskCommunication
IssuesAnalysis
BubbleGraphs
QuantitativeAnalysis
RiskProject
Manager
Audits
PredictiveMetrics
RiskBreakdownStructure
RangeEstimates
RiskAwareness
RiskToleranceCalibration
QualitativeAnalysis
LessonsLearned
Urgency
RiskReporting Enterprise Risk
Management
Monitoring& Control
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Common Perception
• Most Project Managers would likely consider APRM as deeper in Risk Analysis– Software analysis (Monte Carlo,
probabilistic analysis)– Quantification, cost analysis– Expected Monetary Value, decision trees
• What about Risk Planning, Identification, Response and Monitoring & Control?
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So, What Is It?
• To understand this better, we need to understand what is “regular” project risk management, as well as what we mean by “Advanced”
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Risk Management
• Risk: – The effect of uncertainty on objectives
• Risk Management: – The identification, assessment, and
prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events
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Project Risk Management
• Project Risk Management:– The processes of
conducting risk management planning, identification, analysis, response planning and monitoring & control on a project
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What is “Advanced”?
• dictionary.com:1. placed ahead or forward2. ahead or far or further along in progress,
complexity, knowledge, skill, etc3. pertaining to or embodying ideas,
practices, attitudes, etc., taken as being more enlightened or liberal than the standardized, established, or traditional
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Advanced Project Management
• The use of tools, techniques and practices that are above the standard, to enable better decisions and more effective project management– Different tools– Different techniques– Different processes– Different level of thinking
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Proposed APRM Principles
1. Further reduction of uncertainty2. More effective response plans3. Higher level competency and skills
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Reduction of Uncertainty
• Greater clarity and understanding of risks
• More detailed analysis• Uncover hidden information and trends
Better Assessment
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More Effective Response Plans
• Improved prioritization• Greater option development• More effective project management
Better Decisions
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Competency and Skills
• Risk ownership• Training• Risk awareness• Increased teamwork, buy-in &
performance
Better Performance
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What should I know?
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Define Your Objectives
• Better decisions– Tools & techniques, processes, decision
tree
• Better performance– Visualization, buy-in– Team awareness
• Better assessment– Monte Carlo– Timeframe/urgency
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APRM Outcomes
• Better Decisions– Increased identification– Delphi technique– Risk audits– Risk breakdown structures– Attacking risk– Mitigation and contingency plans– Decision trees
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APRM Outcomes
• Better Performance– Risk management training– Team involvement– Risk awareness– Team meetings– Visualization
• Visual Ishikawa Risk Technique (VIRT)• Heat map/bubble chart
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APRM Outcomes
• Better Assessment– Monte Carlo simulation– Increased subjective range assessment– Confidence level estimation– Range estimates– Probabilistic/statistical analysis– Weighted scoring– Urgency
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Implementation Costs
• Risk management has been a difficult realm to show ROI
• Some risk tools & techniques can cost a lot but provide very little improvement in return
• It’s not just about software
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How Can I Use It?
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Choosing APRM
• Which parameters provide the maximum effectiveness for the minimum amount of time? (biggest bang for the buck?)1. Techniques that are simpler and practical2. Knowledge that can be easily shared and
explained to others3. Techniques that can involve others4. Visualization5. Better risk prioritization
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Better Decision Techniques
Sim
ple
Tech
niq
ue
Know
led
ge
Tra
nsfe
r
Colla
bora
tive
Tech
niq
ues
Gra
phica
l
Prio
ritizatio
n
Increased identification
Delphi technique
Risk audits
Risk breakdown structures
Attacking risk
Mitigation/contingency plans
Decision trees
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Better Performance Techniques
Sim
ple
Tech
niq
ue
Know
led
ge
Tra
nsfe
r
Colla
bora
tive
Tech
niq
ues
Gra
phica
l
Prio
ritizatio
n
Training
Team involvement
Risk awareness
Team meetings
VIRT
Heat map/bubble chart
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Better Assessment Techniques
Sim
ple
Tech
niq
ue
Know
led
ge
Tra
nsfe
r
Colla
bora
tive
Tech
niq
ues
Gra
phica
l
Prio
ritizatio
n
Monte Carlo
Increased range
Confidence level
Range estimates
Probabilistic analysis
Weighted scoring
Urgency
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Implementing APRM
• Understand and assess risk stakeholders– Champions– By-standers– End users
• Continual education and communication• See results <-> creates buy-in• Create mini case studies of successes• Know each techniques’ implementation
costs
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Are We Done Yet?
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Summary
• There are a number of ways to be "advanced" but don't confine yourself to simply analysis tools
• Utilizing APRM is like a project management process:– Understand what your needs are, then
choose an appropriate technique(s)
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Contact Information
• Name: Rubin Jen, P. Eng, PMP
• Email: [email protected]
• Phone: (416) 618-1734