the critical value of project risk management - why do we have to manage projects and risks...
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The Critical Value of Project Risk Management - Why do we have to manage Projects and Risks differently ? The presentations tries to highlight the reasons why we have to manage projects and risks differently than years ago. There major reasons have been identified1) The world becomes flat according to Thomas Friedman2) There is the inconvenient truth and global warming3) And the world is changing rapidlyTRANSCRIPT
IQPC
Project Risk Management 2008Brisbane, Australia
The Critical Value of
Project Risk ManagementProject Risk Management- Why do we have to manage Projects and Risks differently ? -
Torsten J. Koerting
www.TORSTENKOERTING.com
T H A N K
Y O UY O U
www.torstenkoerting.com
www.paragliding 365.com
Defining the Critical Value
of Project Risk Managementof Project Risk Management
Torsten J. Koerting
www.torstenkoerting.com
Risk (definition)
“Probability or threat of a damage, injury,
liability, loss, or other negative occurrence,
caused by external or internal vulnerabilities,
and which may be neutralized through
premeditated action.”
Risk (definition)
“The quantifiable likelihood of loss or
less-than-expected returns.”
Risk (definition)
“Risk is a concept that denotes a potential
negative impact to some characteristic of
value that may arise from a future event.”
R I S K
=
(probability of risk occurring) (probability of risk occurring)
x
(impact of risk occurring)
“Take calculated risks. That is quite
different from being rash.”
- George S. Patton (1885 – 1945)
“The policy of being too cautious is
the greatest risk of all.”
- Jawaharlal Nehru (1889 - 1964)
Why does Risk Management Why does Risk Management Why does Risk Management Why does Risk Management
becomesbecomesbecomesbecomes
MORE and more important ?MORE and more important ?MORE and more important ?MORE and more important ?
What has changed the What has changed the What has changed the What has changed the
way we HAVE to way we HAVE to way we HAVE to way we HAVE to
manage projects and manage projects and manage projects and manage projects and
their risks ?their risks ?their risks ?their risks ?
The World
is flat
Inconvenient
Truth
The World
is changing
The Fall of the Berlin Wall …
… ended the cold war …
… and granted
access to new markets for
products, labor and material.
The Internet …
… created easy global competition and
increased the ability to share information
The Microsoft Office Suite …
… and the
HTML and HTTP
protocols …
Open – Sourcing …
… enables writing software so
that it can be easily shared,
improved and given access to.
Outsourcing …
… is moving lower value functions
to other firms,
in other countries
for a lower cost.
Off shoring …
… is moving the production of
goods into other countries.
Supply Chaining …
… by partnering with
other companies to
receive goods
when needed.
In sourcing …
… by sourcing whole
processes to other
companies
Informing …
… by getting answers to
almost any question
within seconds
Information Steroids …
… by having all this
information
available at
your fingertips
The World
is flat
1. The Fall of the Berlin Wall
2. The Internet
3. Work-Flow Software
4. Open-Sourcing
5. Outsourcing5. Outsourcing
6. Off-Shoring
7. Supply-Chaining
8. In-Sourcing
9. In-Forming
10.Information Steroids
With Increased Complexity …
… there are more things
to think about …
… there are more time zones
to overcome …
… there are more people
to deal with …
… and with more people there are
more cultures do deal with …
… more things can ( will ) fail …
… and will take longer.
With Increased Competition …
… continuous learning
is required ...
… and well developed
personal skills.
The Impact :
1. Increased ComplexityMore things can fail
More things to think about
The World
is flat
More time zones
Different cultures
More people
More points of failures
2. Increased CompetitionContinuous learning
Improve personal skills
The World
is flat
Inconvenient
Truth
The World
is changing
Global Warming …
… increased temperature ...
Svalbard Global Seed Vault
… rising see levels ...
… water shortage ...
… bigger storms than ever ...
… and one after the other ...
… disappearing lakes ...
Before
1972
After
2001
… and more wildfires ever.
What can
Y O UY O Udo about it
?
OK … there is something
positive about it.
Shortage in resources …
• Demand higher
than supply
• Supply controlled by
OPEC and former USSROPEC and former USSR
• Demand will increase
… water is disappearing …
… and food is used as ethanol.
• Oil• Water• Food
Inconvenient
Truth
1. Global WarmingSea Levels rising
Water shortage
More storms than ever
Lakes disappear
More wildfires
2. Shortage in ResourcesResource shortage
War for resources
… sharpen our
senses …
… deal with
new requirements …
…
more
change
asas
you
go
…
The Impact :
1. Sharpen the senses
2. Deal with new Requirements
3. More Change while you run
Inconvenient
Truth
3. More Change while you run
4. Higher Risk profile needs
higher contingency
The World
is flat
Inconvenient
Truth
The World
is changing
… the risk
nobody had
on its register …
"Today, the store of human
knowledge doubles
every five years."
- Bill Clinton, 2005
… 9 billions shortly …
… on a flat and …
… and warmer world.
The World
is changing
1. Terrorism
2. Increase of Knowledge
3. Growth in Population
4. Flatter
5. Warmer5. Warmer
… try to know what you don’t know …
… identify the right contingency …
… and manage the risk and
not just the project.
The
Impact
The Impact :
1. Look at risks
we don’t know yet
2. Identify Contingency2. Identify Contingency
3. Manage Risks instead
of projects
The World
is flat
Inconvenient
Truth
The World
is changing
The World
is flat
1. The Fall of the Berlin Wall
2. The Internet
3. Work-Flow Software
4. Open-Sourcing
5. Outsourcing5. Outsourcing
6. Off-Shoring
7. Supply-Chaining
8. In-Sourcing
9. In-Forming
10.Information Steroids
Inconvenient
Truth
1. Global WarmingSea Levels rising
Water shortage
More storms than ever
Lakes disappear
More wildfires
2. Shortage in ResourcesRunning out of resources
The resource war
Political Requirements
The World
is changing
1. Terrorism
2. Increase of Knowledge
3. Growth in Population
4. Flatter
5. Warmer5. Warmer
Therefore
… L E A R N ...
… F I N D O U T…
… M A N A G E R I S K …
… and S T A R T T O D A Y !
T H A N K
Y O UY O U
Question
… and I do not have
an answer …
The ‘Answer’ is always …
T H A N K
Y O UY O U
Picture Credits ( 1 / 3 )
inconvenient truth - http://www.flickr.com/photos/galerieopweg/
inconvenient truth v002 - http://www.flickr.com/photos/yoshigi/
The world is flat - http://www.flickr.com/photos/obriendigital/
The world is changing - number of books - http://www.flickr.com/photos/babblingdweeb/
The world is changing - number of books - v002 - http://www.flickr.com/photos/flyzipper/
1430 enciclopedia - http://www.flickr.com/photos/evaekeblad/
balancing lady - http://www.flickr.com/photos/orangebrompton/
important - http://www.flickr.com/photos/valeriebb/
billboard - http://www.flickr.com/photos/mjlaflaca/
Obama change - http://www.flickr.com/photos/tsevis/
Fall of Berlin Wall - http://www.flickr.com/photos/gavinandrewstewart/Fall of Berlin Wall - http://www.flickr.com/photos/gavinandrewstewart/
Microsoft Office Candy - http://www.flickr.com/photos/sunfox/
HTML - http://www.flickr.com/photos/kk/
Latop Beach - http://www.flickr.com/photos/zzathras777/
Open Sourcing - http://www.flickr.com/photos/martinbekkelund/
Big Crowd - http://www.flickr.com/photos/richevenhouse/
cold war one - http://www.flickr.com/photos/pingnews/
New Markets - http://www.flickr.com/photos/pnp/
Outsourcing 1 - http://www.flickr.com/photos/danzden/
Outsourcing 3 - http://www.flickr.com/photos/kafkan/
Offshoring 1 - http://www.flickr.com/photos/photohome_uk/
Offshoring 2 - http://www.flickr.com/photos/trotzenberg/
Offshoring 1b - http://www.flickr.com/photos/taylar/
Supply Chaining 1 - http://www.flickr.com/photos/nimrodbar/
Supply Chaining 2 - http://www.flickr.com/photos/drewesque/
Insourcing 1 - http://www.flickr.com/photos/zyphbear/
Insourcing 2 - http://www.flickr.com/photos/liveu4/
Picture Credits ( 1 / 3 )
Informing 1 - http://www.flickr.com/photos/ask-for-peace/
Informing 2 - http://www.flickr.com/photos/julianbleecker/
Infroming 3 - http://www.flickr.com/photos/gedankenstuecke/
Info Steroids 1 - http://www.flickr.com/photos/listelys/
Info Steroids 2 - http://www.flickr.com/photos/chanc/
Project Manager - http://www.flickr.com/photos/floongle/
conference 1 - http://www.flickr.com/photos/mrtopf/
California Bush fires - http://earthobservatory.nasa.gov/NaturalHazards/Archive/Oct2003/California.TMOA2003299_lrg.jpg
storm 1 - http://www.flickr.com/photos/gisuser/
storm 2 - http://www.flickr.com/photos/lakerae/
lake 1 - http://www.flickr.com/photos/mashroms/lake 1 - http://www.flickr.com/photos/mashroms/
lake chad 1 - nasa.gov
lake chad 2 - nasa.gov
seed vault 1 - http://www.flickr.com/photos/bzzzt/
rising see levels - http://www.globalwarmingart.com/wiki/Image:Recent_Sea_Level_Rise_png - Robert A. Rohde
sea levels 2 - http://www.flickr.com/photos/2kool/
water shortage - http://www.flickr.com/photos/mckaysavage/
time zone - http://www.flickr.com/photos/mickyates/
more people 1 - http://www.flickr.com/photos/inyucho/
more people 3 - http://www.flickr.com/photos/msjacoby/
cultures - http://www.flickr.com/photos/untitlism/
longer - http://www.flickr.com/photos/swamibu/
break 1 - http://www.flickr.com/photos/jnsabino/
more things 1 - http://www.flickr.com/photos/brixton/
global warming 1 - http://www.flickr.com/photos/hodac/
global warming 2 - http://www.flickr.com/photos/focalplane/
global warming 3 - http://www.flickr.com/photos/a_siegel/
Picture Credits ( 1 / 3 )
oil supply 1 - http://www.flickr.com/photos/falsecognate/
oil supply 2 - http://seekingalpha.com/wp-content/seekingalpha/images/
oil supply 3 - http://www.wisergroup.net/img/oil-graph.jpg
water shortage 1 - http://www.flickr.com/photos/sunrise7/
water shortage 2 - http://www.flickr.com/photos/pierre_pouliquin/
regulations 1 - http://www.flickr.com/photos/two-wrongs/
terrorism 1 - http://www.flickr.com/photos/sis/
knowledge 1 - http://www.flickr.com/photos/worldeconomicforum/
flat world 1 - http://www.flickr.com/photos/aidg/
warmer world 1 - http://www.flickr.com/photos/adrianol/
42 - http://www.flickr.com/photos/howzey/42 - http://www.flickr.com/photos/howzey/
dont panic - http://www.flickr.com/photos/fboosman/
question - http://www.flickr.com/photos/eleaf/
learning - http://www.flickr.com/photos/yewenyi/
competencies 1 - http://www.flickr.com/photos/38234414@N00/
lifeguard 1 - http://www.flickr.com/photos/john/
requirements 1 - http://www.flickr.com/photos/davidquick/
change requests 1 - http://www.flickr.com/photos/yyq123/
contingency 1 - http://www.flickr.com/photos/grantmac/
open door 1 - http://www.flickr.com/photos/eyeballstew/
umbrellas 2 - http://www.flickr.com/photos/greentea/
wet woman 1 - http://www.flickr.com/photos/maxedaperture/
ethanol 1 - http://www.flickr.com/photos/jonathanvlarocca/
ethanol 2 - http://www.flickr.com/photos/swanksalot/
ethanol 3 - http://www.flickr.com/photos/whatknot/