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Lecture Project management in practice - Chapter 14: Project risk management

Lecture Project management in practice - Chapter 14: Project risk management, this chapter presents the following content: Risk event graph, risk management process, contingency funds and risk, risk monitoring and review,. | CHAPTER 14 Project Risk Management Risk Event Graph Risk Management Process Risk Management Process (cont.) Step 1: Establishing the risk context Step 2: Risk identification Step 3: Risk analysis Step 4: Risk evaluation Step 5: Risk treatment Step 6: Contingency planning Step 1: Establishing the Risk Context What is the organisation’s context for risk? How does this affect the project environment? How are ‘individual’ risk tolerances levelled? Do you use the ‘As Low As Reasonably Possible’ (ALARP) approach? Step 2: Risk Identification WBS RBS Risk Profiles Lessons learned Delphi method SWOT Others Step 2: Risk Identification (cont.) The Risk Breakdown Structure (RBS) Step3: Risk Analysis Probability refers to the probability of the event. (This is otherwise known as the likelihood of the risk occurring.) Impact refers to the impact of the event. (This is otherwise known as the consequence of the risk if the event occurs.) Step 3: Risk Analysis Simple ‘inherent’ risk . | CHAPTER 14 Project Risk Management Risk Event Graph Risk Management Process Risk Management Process (cont.) Step 1: Establishing the risk context Step 2: Risk identification Step 3: Risk analysis Step 4: Risk evaluation Step 5: Risk treatment Step 6: Contingency planning Step 1: Establishing the Risk Context What is the organisation’s context for risk? How does this affect the project environment? How are ‘individual’ risk tolerances levelled? Do you use the ‘As Low As Reasonably Possible’ (ALARP) approach? Step 2: Risk Identification WBS RBS Risk Profiles Lessons learned Delphi method SWOT Others Step 2: Risk Identification (cont.) The Risk Breakdown Structure (RBS) Step3: Risk Analysis Probability refers to the probability of the event. (This is otherwise known as the likelihood of the risk occurring.) Impact refers to the impact of the event. (This is otherwise known as the consequence of the risk if the event occurs.) Step 3: Risk Analysis Simple ‘inherent’ risk analysis Step 3: Risk Analysis (cont.) Impact considered over multiple criteria Step 3: Risk Analysis (cont.) Decision tree analysis Step 4: Risk Evaluation The purpose of risk evaluation is to assist in making decisions, based on the outcomes of the risk analysis, about which risks need treatment and the priority for treatment implementation. Risk evaluation involves comparing the level of risk found during the analysis process with risk criteria established when the context was considered. Based on this comparison, the need for treatment can be considered. (AS/NZS/ISO 31000:2009) Step 5: Risk Treatment for Threat Risks Mitigating risk Avoiding risk Transferring risk Accepting (retaining) risk Step 5: Risk Treatment (cont.) Mitigation and residual risk assessment Step 5: Risk Treatment for Opportunity Risks Exploit Share Enhance Accept Step 6: Contingency Planning A contingency plan is an alternative plan that will be used if a possible foreseen risk event becomes a reality (an .