manage risks in projects
TRANSCRIPT
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A special lecture for BusinessLeadersPresented by:
Masilamani Ramasamy
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is important for success
especially in projects
need to have a process/s five steps project
manager/s can use
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Risk management processes are cyclic start from identification of a risk, and may result in identification of another
new risk
each individual has different opinions &ways to deal with risks, SO risk should be consistent to meetproject objectives
documented in a risk managementplan
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The Process
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Identify risks that affect theproject
positively or negatively, anddocument their characteristics
Do this as thoroughly as youcan
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Identify Risks Mind Map
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Assess the risk impact Analyze the probability of riskoccurrence, and
prioritize the risks numerically analyze the effect ofidentified risks on project
objectives usually on cost, schedule and scopetargets
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SCALE PROBABILITY +/- IMPACT ON PROJECT OBJECTIVESTIME COST QUALITY
VHI > 90% 20DAYS
>200K Very significant impact onoverall functionality
HI 71 90% 11 2
0DAYS
101 200K Significant impact on
overall functionality
MED 51 70% 4 10DAYS
51 100K Some impact in keyfunctional areas
LO 31 50% 1 3
DAYS
10 50K Minor impact on overall
functionality
VLO 11 30% < 1 DAY
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Perform Quantitative Risk Analysis Mind Map
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Explore all the possible ways to reduce the impact of threats , and/or exploit opportunities
Plan actions to eliminate the risks and/or enhance the opportunities
Action plans should be appropriate, cost effective, and
realistic
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: PLAN ACTIONS-Standard Risk Breakdown Structure (RBS)RBS LEVEL 0 RBS LEVEL 1 RBS LEVEL 2
RBSLEVEL 0
RBS LEVEL 1 RBS LEVEL 2 RBS LEVEL 2
0. PROJECT RISK
1. TECHNICAL RISK1.1 Scope definition1.2 Requirements definition1.3 Estimates, assumptions & constraints1.4 Technical processes1.5 Technology1.6 Technical interfaces
1.7 Design1.8 Performance1.9 Reliability & maintainability1.10 Safety1.11 Security1.12 Test & acceptance
2. MANAGEMENT RISK 2.1 Project management2.2 Programme/portfolio management2.3 Operations management2.4 Organisation2.5 Resourcing2.6 Communication2.7 Information
2.8 HS&E
2.9 QuaLITY2.10 Reputation
3. COMMERCIAL RISK 3.1 Contractual terms & conditions3.2 Internal procurement3.3 Suppliers & vendors3.4 Subcontracts
3.5 Client/customer stability3.6 Partnerships & joint ventures
4. EXTERNAL RISK 4.1 Legislation4.2 Exchange rates4.3 Site/facilities4.4 Environmental/weather4.5 Competition
4.6 Regulatory
4.7 Political4.8 Country4.9 Social/demographic4.10 Pressure groups4. EXTERNAL RISK
4.11 Force majeure
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Plan Risk Management Mind Map
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Track the risks throughout the project If risks occur then,
implement the risk strategy based on
action plan Risk strategies may include
Mitigation
Acceptance Avoidance, and
Exploitation
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This is no problem You can perform a risk assessment on the
project and begin to apply project riskmanagement at any time
The risk assessment should find some of themajor things which are about to go wrong,and identify potential failures as the project
continues
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AvoidThe best thing that you can do
with a risk is avoid itif you can
prevent it from happening, it
Definitely wont hurt your project.
The easiest way to avoid this riskis to walk away
from the cliff but that may notbe an option on this project.
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TransferOne effective wayto deal with a risk
is to pay someoneelse to accept itfor you. The most
common way todo this is to buyinsurance.
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MitigateIf you cant avoid the
risk, you can mitigateit.This means takingsome Risk Response
Strategies
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If you cant avoid the risk,and theres nothing you can
do to reduce its impact,then accepting it is youronly choice
AcceptWhen you cant avoid, mitigate,or transfer a risk, then you haveto accept it. But even when youaccept a risk, at least youvelooked at the alternatives and
you know what will happen if itoccurs.
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Plan Risk Responses Mind Map
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Measure the effectiveness of theplanned action and
controlling the risk impact by understanding risk triggers
& timely implementation of
planned actions
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RiskCategory Risk Name RiskNumberProbability (1-3)
Impact(1-3)RiskScore(1-5) Mitigation Contingency Action By
ActionWhen
GuestsThe guestsfind thepartyboring
1.1. 2 2 4 Invite crazyfriends, providesufficient liquor
Bring out thekaraoke
Ahmadwithin2hrs
GuestsDrunkenbrawl
1.2. 1 3 3Dont invitecrazy friends,don't provide
too much liquor
Call 911 Samy Now
Nature Rain 2.1. 2 2 4 Have the partyindoors
Move theparty indoors
Milind 10mins
Nature
Earthquake
or fire 2.2. 1 3 3Start the partywith instructions
on what to do inthe event of fireor earthquake
Implementtheappropriate
naturaldisasterresponseplan
Everyone
As per
plan
FoodNotenoughfood
3.1. 1 2 2 Have a buffet Order pizza Zainal 30minsFood Food is
spoiled3.2. 1 3 3 Store the food in
deep freezerOrder pizza Susi 30mins
http://en.wikipedia.org/wiki/Karaokehttp://en.wikipedia.org/wiki/Karaoke -
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Monitor & Control Risks Mind Map
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